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Buoyant Sales of Frozen Fish in Germany In Wake of Mad Cows and Sick Sows.

From Bremerhaven to Hamburg, producers are working overtime to pack enough product to meet rising demand for fishery products that extends throughout much of Europe.

Sadly but truly, there is nothing like a food safety scare in the red meat industry to boost sales of fishery products. That's just what's been happening in Europe during the first quarter of 2001, as retail shoppers and restaurant diners alike have stampeded en masse away from beef and pork.

Health concerns -- real or imagined -- over mad cows, foot and mouth disease and the reported use of unauthorized antibiotics in raising pigs has turned once carnivorous meat eaters into consumers with a decided preference for fish, poultry, wild game and vegetable dishes.

The "fear of the unknown" mentality gripping Germany, historically a "meat and potatoes" country if ever there was one, is perhaps indicative of the mindset found in much of Europe following the spread of bovine spongiform encephalopathy (BSE) cases from France last October to virtually every major agriculture producing nation of the EU.

A proposal to slaughter up to 400,000 head of cattle in Germany to control the contagion was, not surprisingly, initially greeted with opposition from farmers worried about negative economic consequences. They have demonstrated against forced cow culling in a number of cities.

On Feb. 8 Renate Kunast, Germany's new minister for food, fanning and consumer protection (who also happens to be co-chairman of the environmental Green party), promised farmers that she would help ease their financial pain with aid packages. However, the minister told the Bundestag (Parliament) in Berlin, current farming practices have "led us into a fiasco. You really can say that BSE has catapulted us out of the treadmill of thoughtless mass consumption."

Ms. Kunast called for a radical shift away from so-called factory farming to less intensive methods, and an increase in organic farming to 20% from today's 2.5% level [see related story on page 60]. "The BSE scandal marks the end of agricultural policy of the old style," she asserted.

There is no doubt that consumer confidence has been greatly shaken by the BSE imbroglio. Reporters from this magazine spent two weeks traveling through Germany in February, visiting with numerous frozen food company executives. While en route to Trier, they pulled off of the autobahn to grab a quick meal at a roadside restaurant. The hour was late, and the odds of arriving at their hotel before its kitchen closed were not looking good.

Taking trays and moving down the cafeteria line, they came to a grill attended by a woman ready to cook to order. Placed before her were raw fillets of three different kinds of meat.

"What specials are on the menu tonight?" asked Quick Frozen Foods International's chief editor and publisher.

"This is chicken," she replied, pointing straight ahead. "And this is venison," added the chef, pointing to the left.

"How about the third selection?" asked this writer.

"That's mad cow!" she exclaimed. "I don't think you want it."

A few days later, aboard a trans-Atlantic Lufthansa flight, the luncheon choice offered was chicken or beef. While virtually every passenger opted for the poultry dish, one man quipped, "I will take the mad cow."

"Don't worry, sir, there is no need for concern," assured the flight attendant. "The beef we serve comes from Argentina, not Europe."

By one estimate, the collapsing market for beef in Germany was off by 80% in the first three months of the year. Steakhouses and fast food burger restaurants were especially hard hit. McDonald's reported that sales at its 5,000-plus units across Europe were down by over 10%. A random survey conducted by Quick Frozen Foods International found a general upsurge in demand for chicken and fish menus at the expense of Big Macs and Whoppers. Not surprisingly, McDonald's began promoting "Fish Wochen McSpecials," featuring a fish burger, french fries and drink for roughly $4.00 Alternately, a "Sea Box" of coated shrimp and squid rings could be had for the same price.

"Clearly, people who are afraid to eat beef are turning more to fish," said Wolfhard Wagener of Hamburg-headquartered Crustimex Seafood GmbH. "As a result our turnover in January was twice that of last year. In fact, we did more business during that month than in December, which is normally the busiest period of the year."

During previous crises in the red meat industry, the fish sector did not benefit as much as is the case today, he added. "Though the BSE scare has helped us a lot, we take no pleasure in gaining at the expense of another branch's bad luck. Tomorrow it could be the other way around."

In Bremerhaven, Frosta Tiefkuhl-kost and private label sister Copack reportedly enjoyed a 50% spike in sales of frozen fish and seafood products during January. Increased production of coated fillets and fish fingers called for overtime shifts and the employment of 100 additional workers. In Luneberg, Pickenpack Tiefkuhlgesellschaft added 70 people to its labor force to meet rising demand for frozen fish dishes.

"Certainly the fish sector has benefited from the BSE situation, but it is chicken producers who are profiting the most," pointed out Henrik Moeller, Pickenpack's export director. Nonetheless, his company was faring well even before the BSE outbreak. Export sales were up 15% in the year 2000, and a gain of 20% is expected in 2001 if supply lines remain open.

According to figures compiled by the UN's Food and Agriculture Organization (FAO), global supply of the 10 major groundfish species dropped from 12.3 million metric tons in 1987 to approximately 8.7 million in 1998. Industry estimates anticipate further slippage to 7.0 million tons in 2001. The availability of Alaska pollock between the years of 1998 and 2000 fell from 4.0 million tons to 3.6 million.

For the moment, supplies of Alaska pollock -- the primary raw material processed by Pickenpack -- are sufficient. This is in part due to economic downturns in Japan, Russia and South America, which have reduced demand for value-added fishery products in those markets. At times, however, financial dislocation can have a negative impact on supply as well as demand.

Mr. Moeller suggested that the time is ripe for promoting high quality frozen fishery products as something worth paying a premium price for. "Instead, there is downward price pressure exerted by retail buyers."

Meanwhile, Pickenpack (Fax: 49-41 31/9 87-111) continues to pack and market new branded and private label items in cooperation with sister company Rahbekfisk of Denmark. Among them is a retail range of ready meals produced for Kafer Munchen. It runs the gamut from Mornay- and Hawaii-style Fish Fillets in 350g packages to Copenhagen Fish Soup (400g), Fish Fillets in Blatterteig (300g) and Seafood Quiche (300g).

Eight new products for the catering sector have been brought out, including: Salmon Fillet in Puff Pastry (boneless 150g portions filled with dill sauce); Filled Plaice (with smoked salmon and cheese sauce, formed breaded and pre-fried in 150g portions); Fish Roulade (210g units made of boneless Alaska pollock fillets accompanied with spinach and cheese); Saithe Fillets (150g portions accented with herb sauce).

The two companies combined rank as one of Europe's second leading processors of value added frozen fishery products, turning out over 60,000 tons per annum. "Our relationship is a win-win situation," said Mr. Moeller. "Except for France, where we operate as Pickenpack-Rahbek, each company is retaining its own profile. Both benefit from the other's know-how and work side by side at trade exhibitions."

Production will continue at factories in both Germany and Denmark, with a major investment expected in the Danish facilities to boost output of convenience-oriented foodservice products. In Germany the emphasis will be on further increasing efficiencies, which are already said to be second to none in Europe.

Though the BSE crisis and other red meat concerns among consumers have spurred demand for sauced fish dishes, fillets and sticks, it has apparently not translated to the same kind of buoyancy in the sales of upscale seafood specialties.

"We have not seen a dramatic surge, though the year has started well for us," said Jurgen Schulz, managing director of Hamburg-headquartered Hamburger Feinfrost (Fax: 49-39 92 92-39). "Pricing remains an important factor in all buying decisions. The weak euro exchange rate last year, coupled with shortages of shrimp all over Asia, did not help in this regard."

Demand was actually quite slow during the normally busy Christmas season, as buyers of crustacean products hunted for low prices, Mr. Schulz told Quick Frozen Foods International during an interview at the firm's new office in Altona overlooking the Elbe River. "Now we will have to see how 2001 supplies shape up after the first crops of tropical farm-raised shrimp are harvested in the spring. The weather will play a big role. Let us just hope that there is not a repeat of last year's major flooding, or there could well be a shortage."

Over the years Hamburger Feinfrost has developed an increasingly sophisticated range of seafood specialties to differentiate itself from a raft of commodity-oriented competitors that have entered the marketplace. Asian-style appetizers are in the forefront of the company's value-added catalog which features over twenty finger foods, which include a seven-item line of individually cellophane-wrapped thaw-and-eat sushi featuring salmon, tuna, omelet and shrimp nigiri, tuna maki and radish maki.

The biggest challenge in making frozen sushi is preparing the rice just right, so that it remains sticky when eaten. Fish components, which typically thaw out nicely, are easier to handle. Furthermore, rapid cooling of rice after cooking is essential to guard against bacterial growth.

Hamburger Feinfrost goes to great lengths to assure food safety and quality control. "Having been in this business for 30 years, I can not recall a single occasion when anybody got sick from frozen seafood," the managing director told Quick Frozen Foods International.

Meanwhile, seven varieties of Seafood Terrines and Salmon Medallions represent the company's latest launch. Among ingredients in the 30g hand-made terrines, all of which are preservative-free, are smoked redfish, carrots, leek, white wine and spices. One salmon offering is accompanied with haddock and dill.

The company's extensive Dim Sum line remains a popular seller. The 26-item range includes everything from Shrimp Rolls and traditional Japanese-style Breaded King Prawns to Gyoza Seafood and Three Color Hau Kau (bag-shaped pastries filled with shrimp and fish meat, spiced and decorated with a green pea, piece of carrot or Chinese mushroom).

Mr. Schulz says that the ever-expanding Dim Sum offerings, which are produced in Thailand, have gone over well because they are tailor-made to suit his customer's tastes.

"It took a little while, but our suppliers have learned to appreciate what our market requires," he recalled. "At first they insisted that nobody in Thailand would eat the recipes we proposed. Fully agreeing with them, I replied, `Yes, but our main market is Germany, not Thailand.' They got the message and we have enjoyed a mutually beneficial buyer-supplier relationship ever since."

Within a few minutes' walking distance of Hamburger Feinfrost's quarters in the nearby fish market is Crustimex Seafood GmbH (Fax: 49-4038-0237), which has been a unit of the diversified Stockmeyer group since 1995. There Quick Frozen Food International editors met up with Wolfhard Wagener, who was pleased to report a 14% increase in sales during Y2K.

"At the moment there is general price stability, with the exception of cod, which should help sustain repeat business in the near term," he told Quick Frozen Foods International.

With many consumers now extremely concerned about where the food they eat comes from, new packaging for the company's Mare Seafood brand graphically depicts sourcing regions. "We import a great deal of wild salmon from Alaska and Canada, and most pollock comes from the North Pacific. Our new, 1,000g Wildwasser Lachssteaks packaging shows the fish and a map of its habitat," said Mr. Wagener.

Time Ripe to Boost Fish Consumption

The Crustimex executive suggested that, considering the BSE fallout in the meat industry, now is the time to bolster Germany's relatively low per capita consumption rate for fishery products. It stands at just 13 kilograms of catch weight (10 or 11 net), compared to upwards of 70 in Portugal.

Meanwhile, on the crustacean side of the business ledger, a high-valued US dollar has curtailed growth of shrimp sales as prices charged cash-and-carry customers (70% of Crustimex's trade) have risen by approximately 33% during the past year.

"Overall, though, I am quite optimistic about what the remainder of 2001 will bring," said Mr. Wagener. "Sure, the BSE factor is a big part of it. But that is not all that is going positively for fishery products. The fact is that more and more people are coming to realize that fish and seafood is the most healthy protein group for them to consume. Our challenge is to make sure this is not forgotten after consumers regain confidence in the red meat sector."
Global Groundfish Catch History and Prospects

((*)in thousands of tons)

FAO Data and Groundfish Forum Panelists

Of Fish 1998 1999 2000 2001 % 01/98

Atlantic Cod 1,214 1,097 953 929 77
Haddock 285 239 207 215 75
Saithe 331 340 303 329 99
Redfish 263 249 252 250 95
TOTAL 2,093 1,925 1,716 1,723 82

Cape Hakes 302 326 350 358 119
South American Hakes 696 506 413 456 66
Hoki 793 727 637 597 75
TOTAL 1,791 1,559 1,400 1,411 79

Alaska Pollack 4,049 3,759 3,620 3,200 79
Pacific Cod 411 423 414 412 100
North Pacific Hake 318 307 257 322 101
TOTAL 4,778 4,489 4,291 3,934 82

GRAND TOTAL 8,662 7,973 7,406 7,068 82

Source: FAO, Groundfish forum 2000 panelists, and estimates.
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Comment:Buoyant Sales of Frozen Fish in Germany In Wake of Mad Cows and Sick Sows.
Publication:Quick Frozen Foods International
Article Type:Statistical Data Included
Geographic Code:4EUGE
Date:Apr 1, 2001
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