Wednesday, Sept. 11, 8.45 a.m. CET
Just need a reason to party…
What´s to be said when the president of the biggest European tuna catching company explains away the vilification of tuna FADs in the most ingenious, and hilarious, way? That this confidence and good humor can only come from wisdom working 50 years in the heart of the tuna catching industry.
The constant hammering tuna FADs get in mainstream media -- who in turn regurgitate what certain environmental NGOs screech in their fatalistic press releases -- comes from a basic lack of knowledge, said Ignacio Lachaga Bengoechea, president of Albacora, Europe's largest tuna catching company.
“Before using artficial FADs, we used natural ones like a tree trunk,” Lachaga told IntraFish. “We still don't know why tuna like aggregating around floating objects…they even gather under a dead whale floating in the ocean, for example.”
There have been studies to understand this habit of the mighty tuna species, but they are not conclusive. Lachaga gave his personal reasons, with a cheeky grin and crinkly eyes.
“The tuna might think that the floating object will be carried towards a place with more food,” he told IntraFish, “or it might be a good place for them to meet up and hook up-- seeing as they are highly migratory and might be lonely. Girl meets boy; grandparents, mummy and daddy all come together, and it´s a big party!”
Albacora catches tuna worldwide with a fleet of 19 purse seiners, two reefers, and eight auxiliary ships that include two pole-and-line vessels.
---------------------------------------------------------
Wednesday, Sept. 11, 8.26 a.m. CET
All that meets the eye
Let's be honest…how appetizing does this ensemble of tuna cans look? Not very, it can be wagered…but how about these images? Does it make you want to save that file and go out and grab it for lunch? Probably yes.
This is exactly what needs to be conveyed to the end consumer, said Luca Alemanno, fish division manager at Bolton Alimentari Group. “Do you feel hungry when you look at an open can? No! But you do when you see the final dish,” Alemanno said. “We need to inspire consumers to eat tuna.”
Consumers also need to be educated about how the tuna they buy ends up in retail shelves, Alemanno said. “It is a noble fish with a long and complex supply chain -- some people don´t think of tuna as fish, they categorize it as tuna, as if it is different from being a fish.”
---------------------------------------------------------
Wednesday, Sept. 11, 8.15 a.m. CET
Cheap tuna a thing of the past
In a simple presentation on day 2 of the Vigo Tuna Conference, Juan Corrales Garavilla, managing director of Conservas Garavilla, explained exactly why tuna prices have reached eye-watering levels in recent years, and why it will remain there.
“If we see the price difference in skipjack prices from 1980 to 2012, the nominal price -- after adjusting for inflation -- hasn´t changed much,” Garavilla said.
“Using the same parameter, yellowfin prices in 1980 were in fact 50 percent more than what they are now,” he told the audience, pointing out the tuna catches in 1980 were 1.5 million metric tons, whereas it´s been between 4.4 million metric tons to 4.5 million metric tons since 2005.
Apart from increased fishing effort since 1980, a new fishing area -- the Indian Ocean -- has come into play within this period, affecting status quo. “Hardly any tonnage came from the Indian Ocean before, but now it accounts 25 percent of the total tuna catches, mostly using gill nets,” Garavilla said.
All this leads to the turbulence of September 2008 -- when tuna prices in the Bangkok market touched new highs of $1,900 (€1,431) to $2,000 (€1,506) per metric ton for the first time -- though these high prices seem normal since, Garavilla said.
“There are structural problems leading to these high prices,” Garavilla told a rapt audience. “We were used to cheap oil of $20 (€15.10) per barrel instead of stable oil prices (which has been above the $100 (€75.30) mark for some time now).
“The cost of fishing licensed have increased 20-fold since 2005 -- for example the cost of fishing licenses in the Pacific Ocean used to be $100 (€75.30) in 2005, which shot up to $2,000 (€1,506) by 2012. And it is with all fishing grounds -- all countries are asking for more money for fishing licenses.
“There have been increased regulations in the Western Pacific since 2006, where there were hardly any before. Similarly, there have been closures of fishing grounds in the Eastern Pacific, all developments which impact the entire supply chain,” he said.
Also, since the EU tightened regulations on IUU fishing, it has impacted supply volumes, though 35 percent of all tuna catches are still caught illegally.
“On the consumption side, the global GDP has nearly doubled in the last 20 years, and in less than ten years the share of the world GDP occupied by emerging markets has gone up 15 percent to account for 45 percent.
“The emerging market economies spend a lot of their disposable income on food -- when they go into a supermarket they will not look out for tuna promotions, or choose the can that costs 50 cents less.”
Garavilla compared consumer behavior in emerging markets to how Spanish consumers behaved in 1980. In that year, Spanish consumers spent 31 percent of their disposable income on food, a figure which has plunged to 13 percent by 2012.
“It is very difficult to speak of inexpensive tuna anymore,” Garavilla said.
---------------------------------------------------------
Wednesday, Sept. 11, 8.02 a.m. CET
'Stupid' Spanish retailers
After being termed “lazy” by a WWF representative a day before, Spanish retailers were denounced as “stupid” on the second day of the Vigo Tuna Conference.
When Adolfo Valsecchi -- the 71-year old ex-CEO of MW Brands -- pronounced the infighting among European retailers and distributors who keep slashing prices and putting tuna products up for promotions as “stupid”, some in the audience cheered.
“It is a waste of value when retailers fight among themselves to get consumers by promotions and cutting price; it is stupid,” Valsecchi said.
Adolfo Valsecchi was at the helm of MW Brands when it was acquired by Thai Union Frozen Products two years ago. Paris-headquatered MW Brands produces brands such as John West, Petit Navire, Parmentier and Mareblue.
---------------------------------------------------------
Wednesday, Sept. 11, 7.35 a.m. CET
Will the giant wake up to tuna?
Renato Curto, president of Tri Marine Group, USA, presented a slideshow titled “How to wake the sleeping giant,” referring to energizing the sluggish US canned tuna sector. But the pictures that followed made it clear exactly why the giant chose to sleep.
The images compared canned tuna products in the EU and in the US markets, and the differences are stark.
The average US tin has vegetable broth, whereas an EU product has limited or no broth. The US tin meat has a soft texture, while the EU can contains meat with firmer texture. The US product has high flake content and low fill weights, whereas the EU product of ten contains Italian style cakes and has higher fill weights.
In other words, it just does not look appetizing.
“We cannot keep processing like this, there will be no future for the US canned tuna market if we keep going like this,” Curto said.
Somebody on the panel concurred.
“I always carry my own can of tuna when I travel to the United States, as I have been eating tuna for breakfast for the last 35 years,” said Ignacio Lachaga Bengoechea, president of Spanish tuna giant Albacora. “I am incapable of eating the tuna there.”
---------------------------------------------------------
Wednesday, Sept. 11, 7.15 a.m. CET
Ecuadorian heft
A presentation from an Ecuadorian industry representative highlighted the scale and heft of tuna catching and processing activities of the Latin American country.
“Ecuador has 14 plants with a 400 million metric tons processing capacity,“ said Roberto Aguirre, president of NIRSA, Ecuador.
“We have 106 vessels under the Ecuadorian flag, all purse seiners, though 40 percent of the tuna we process comes from outside.”
Ecuador caught 217,000 metric tons of tuna in 2012, up 9 percent from 2011 catches. It accounts for 40 percent of the total tuna catches in the Eatern Pacific Ocean.
“In the period between 2000 and 2012, there has been 71 percent increase in volume and 41.7 percent increase in the value of the tuna trade,” Aguirre said. “Canned tuna represents 98 percent of all tuna products traded.”
In keeping with stories of emerging economies, Aguirre admitted Latin American markets constituted 42 percent of Ecuador´s tuna exports, and this number is increasing.
----------------------------------------------------
Wednesday, Sept. 11, 7.02 a.m. CET
IUU regs hurting Thai exports
Since the EU tightened regulations around importing fish products from countries where IUU fishing may be carried out, Thailand´s exports to the EU has fallen significantly.
These numbers came to light in a presentation made by Chanintr Chalisarapong, vice-president of the Thai Food Processors Association and chairman of Thailand´s Tuna Group.
Thailand´s global exports fell 3 percent in 2012 from 2011, with a 10 percent fall in the United States and 27 percent reduction in the EU.
However, it increased 5 percent in the Middle East.
The other major markets for Thai tuna products are Australia, Japan, Canada and South Africa.
“Our strategy is not to depend on any one market,” said Chanintr Chalisarapong.
---------------------------------------------------------
Tuesday, Sept. 10, 8.02 a.m. CET
Fish ain't a commodity
An economy in recession isn't necessarily bad news for the seafood industry, as food items are privileged to be in the essentials list of the cash-strapped consumer. That said, producers and retailers should not make the mistake of treating food -- especially proteins such as canned tuna -- as a commodity, experts said in the first panel of the morning.
“Among food products in the Spanish market, price is the most important factor,” said Jose María Bonmati, general director of AECOC (Association of Manufacturers and Distributors).
“For example, Spain's biggest retailer, Mercadona, is leading with price, and when this happens in retail private-label products, food becomes only a commodity -- just milk, bread, oil, canned tuna, and its price is the only distinguishing factor,” he told the audience.
The key is to differentiate products, else producers and sellers lose out.
“Retail brands have grown in those industries where products are very similar and the only differentiator is the price of that product,” Bonmati said, which reduces competitiveness in the sector, as independent brands lose out, and consumers are forced to take their pick from a limited choice.
Fish products such as canned tuna should not fall prey to this trend, warned Aurelio del Pino, general director of the Association of Spanish Supermarket Chains. He gave an example where product differentiation made all the difference in sales.
“There was a salt-free canned tuna product being sold in Carrefour, which had the same packaging as the normal tuna product, and its sales fell,” del Pino said.
“I went into a shop and found out the manager was confusing the two products, and was stacking them together -- he had no idea that there was a salt-free canned tuna product in the mix.”
---------------------------------------------------------
Tuesday, Sept. 10, 7.44 a.m. CET
The battle of the brands
In a market where nearly 80 percent of the market share in canned tuna products is taken by retail private labels, friction is natural among producers and distributors/retailers. Ignacio Larracoechea, president of PROMARCA (Spanish Association of Branded Products Companies), did not mince words in highlighting the friction between independent brand producers and private-label operators.
An uneven playing field leads to anti-competitiveness and reduces sector innovation, as well as negatively impacting consumers, Larracoechea said.
“According to a 2011 report, there have been instances of overpayment to distributors, i.e., payment demands that were not part of the contract,” Larracoechea said. “Or distributors who learned about product innovation of suppliers which was sent to them beforehand, and copied it as they are also in competition with their suppliers.
“Or the products from independent brands were placed in such a way on retail shelves that they are not easy to see.”
These instances of unfairness has led to decreased competitiveness among canned food products, and an inverse consequence of increased number of private label products means that prices are not as low as they could have been, Larracoechea said.
“In the last ten years, 22 percent of brands have been eliminated in Spain, and there has been a 65 percent reduction in different products.
“We need positive cooperation between manufacturers and retailers and distributors,” he said, while some in the audience squirmed in their seats.
---------------------------------------------------------
Tuesday, Sept. 10, 7.38 a.m. CET
Tuna for everyone
A positive trend has emerged in Spain's hardship. People are watching every penny they spend, and they are continuing -- even increasing -- to spend it on canned tuna.
“Consumers haven´t stopped buying tuna, but they are buying less of it, and are trying to offset the price increase by buying private label or in promotions, said Aurelio del Pino, general director of the Association of Spanish Supermarket Chains.
“Canned tuna sold 3 percent more than refined virgin olive oil, 4 percent more than biscuits, and 26 percent more than coffee; all products that occupy more space that occupy more retail space than canned tuna, and which retailers traditionally promote in their brochures,” he said.
Retailers have taken note of this development and are promoting tuna heavily in their brochures now, del Pino said, though the canned tuna sector has two strong areas to improve on.
“We should focus on the health aspect of tuna, and improve its packaging,” he said.
---------------------------------------------------------
Tuesday, Sept. 10, 7.35 a.m. CET
Keeping it in the family
“Canned food is holding the fort in retail stores,” said Roberto Butragueno, retail services manager at AC Nielsen “Food products such as pasta, oil, and cheap proteins are selling the best."
This is despite average prices going up by 10 percent, he said, and retail private label products are the heaviest items in the shopping basket of a price-sensitive consumer.
There are ways of leveraging this further, said Florencio Garcia, client director at Kantar Worldpanel Spain, and take advantage of trends that emerge in a crisis-struck economy.
“People are spending more time at home, and eating more meals indoors,” Garcia said. “People are now having breakfast at home, instead of the office canteen, and children are coming back home to have the evening snack, like a sandwich, than buying it from shops.”
These developments present new opportunities for food companies to cash in, Garcia said, giving the example of a cheese company which was marketing its product as a breakfast staple, and brands such as Philadelphia spreads and Nutella, both targeting those people now "eating in."
“There are gourmet and convenience niches to be explored, for consumers who might want to splurge once in a while on luxurious but home-cooked meals, as well as those who are time-strapped and are looking for value in convenience products,” Butragueno concurred.
“The food sector is privileged, as mass commodity products are more resistant than others,” Garcia said. “There is a constant decline in textiles, perfumes, automobiles et cetera, but 98 percent of Spanish households have canned food products -- and 56.4 percent of households buy canned tuna products.
“Now there is only one shampoo for the entire family, and one box of cereals -- the move is from individualistic products to family-based products, and there is a niche to further develop the canned tuna market.”
---------------------------------------------------------
Tuesday, Sept. 10, 7.26 a.m. CET
Old is gold
A common point brought up by nearly all speakers was the age demography of Spain, and how it played in favor of the canned tuna industry.
“We have an aging population,” said Florencio Garcia, client director at Kantar Worldpanel Spain.
“Older consumers are a big market for canned tuna, and Spain´s demography is a strength for our products,” concurred Roberto Butragueno, retail services manager at AC Nielsen.
---------------------------------------------------------
Tuesday, Sept. 10, 7.17 a.m. CET
Tough competition for tuna
Tuna faces tough competition from other proteins such as eggs, meat et cetera, when it comes to research papers pointing towards its health benefits, a main selling point among consumers for any food product, said Icíar Martínez, a food safety specialist and professor.
“In fact, there have been more scientific papers written on the benefits of eating garlic than on tuna,” she said.
Her science-backed presentation had to be cut short due to time constraints, though she offered her services in writing about tuna´s health benefits to industry members present in the audience.
---------------------------------------------------------
Tuesday, Sept. 10, 7.05 a.m. CET
From monkeys to human -- thanks to Omega 3
The aquatic diet of our ancient ancestors may be the reason we are not still swinging from trees, scratching our armpits and picking lice from our offspring's head.
In a presentation made by Aniceto Charro Salgado, head of endocrinology and nutrition at Hospital Clínico San Carlos in Madrid, a diet rich in Omega 3 fats was the crucial element in brain development of the prehistoric men who lived in coastal communities, before dispersing inland (presumably as they were hence smart enough to move about?).
Fish consumption can still help with human development and health, Salgado assured, but his stream of data too was cut short due to time constraints, alas.
---------------------------------------------------------
Tuesday, Sept. 10, 6.55 a.m. CET
Mañana, mañana
Spanish retailers are lazy when it comes to giving product information, said Raul Garcia from WWF.
“In Spanish supermarkets, the only information we get from the label is ´tuna in olive oil,'" Garcia said. “Transparency is better for everyone, and consumers are getting more and more demanding world wide, though we don´t see that yet in Spain.”
----------------------------------------------------------
Tuesday, Sept. 10, 06.45a.m. CET
Goodwill hunting
Should big companies play a role in sustainability issues, apart from moral reasons? Yes, and for its own benefit, said Alma Roman, CSR director at Calvo Group.
“Yes, a company -- as a social agent -- should play a role,” she said, citing the economic of reputation. “More than 80 percent of a company's value is in intangible assets such as reputation, reliability, trust."
“These qualities attract more talent, get more people buying your products, and maybe even get more money for the products -- we cannot handle a finite resource such as wild tuna stocks as if it's infinite.”
----------------------------------------------------------
Tuesday, Sept. 10, 06.30 a.m. CET
Chin up, Spain
For those of us reading one story after another about how southern European economies are on the brink of complete meltdown, it is easy to have false preconceived notions about how Europe´s seafood behemoth is faring. A part of me was expecting a society plunged in doom, remembering their happy fish eating past with melancholic nostalgia while chomping on cheap Chinese chow mein.
How could one not, consistently fed on a diet of stories such as these?
But I am happy to report from sunny Galicia that seafood consumption remains very much a part of the culture, never mind the recession. People might be watching their wallets and eating in, denting the restaurant business seriously, but IntraFish stepped up to the challenge of filling this gap.
Read IntraFish's blog about the 6th Tuna Conference being held in Vigo from Sept. 9-10, to see how the Spanish seafood sector is adapting itself to wear out these tough times.
Chin up, España. Till then, IntraFish will be happy to sample your excellent seafood and keep the hearth burning.
