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| FISH & SHELLFISH |
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| Executive Summary |
| Fish Industry
Declining fish stocks, tighter fish catching quotas as well as restructuring among primary and secondary fish processors are among the key issues facing the fish and fish products industry in the UK. These have implications for the final consumer, who ends up paying higher prices as a result of shortfalls in supply. Combined with this, the retailer multiples (who saw their share of fresh fish sales increase from 40.7% of retail volume in 1993 to around 75% in 2000) demand continuity and reliability of supply, and have therefore come to rely heavily on imports.
Fish in frozen and fresh form (combined) is the third most important protein in value and volume terms after chicken and beef sold through retail outlets. The drive for convenience in relation to fish can be seen in consumer preference for ready-to-cook fish products at the expense of fresh/chilled wet fish. With a 40.7% volume share in 1999. Frozen fish products accounted for the largest single share of retail fish sales. Fresh/chilled wet fish saw the greatest proportionate decline in actual volume sales between 1993 and 1999, resulting in overall volume share falling slightly from 28% in 1993 to 26.5% in 1999.
Value-added chilled fish products have experienced greatest growth, albeit from a far smaller base than the other three categories. This segment includes a variety of products such as fish and chips, fish pies, fish-in-sauce and prawn/seafood cocktails. Canned fish sales have at best remained fairly static, but still represent sizeable volumes, largely due to canned tuna.
In terms of distribution channels, sales via retailers accounted for 61.3% of fresh and frozen fish product sales volumes in 1999. Both the retail and catering sectors experienced falling sales volumes. The catering sector is particularly susceptible to fluctuations in the economic cycle. A few treadmill species dominate both the catering and retail sectors, particularly in the case of the former. Fish and chip shops alone use over 28,000 tonnes of cod per annum.
Within the retail fresh fish sector, easy-to-handle and ready-to-use formats, such as steaks and portions, have been gaining share. This is reflected by the 19.5% volume increase in retail sales of steaks and portions between 1995 and 1999, for example. By contrast, sales of whole fresh fish fell by 30.6% during the same period.
The UK preference is for white fish such as cod and haddock. Pelagic species such as mackerel, kippers and herring are minority performers. Salmon sales, however, (fresh and smoked combined) increased by 62.4% between 1995 and 2000. Trout and prawn sales experienced increases — albeit on a far more modest scale.
In overall terms, a higher proportion of UK households purchase frozen or canned fish products than fresh fish in an average 4 week period. For both frozen fish products and canned fish respectively, 42% of UK households purchase them in an average 4 week period, compared to 29.1% buying fresh fish (wet, smoked including shellfish). The relatively low incidence of purchase for fresh fish is due to a combination of factors associated with time pressures and lack of confidence in preparation and handling. Consumer research quoted by the trade shows that a third of housewives do not like boning and filleting. Many housewives do not like bones, while others agree fish is too expensive or do not like the smell of raw fish.
Value-added chilled fish products comprising ready-meal-type products such as fish and chips, pies/bakes/crumbles, pasta and encroute products have been the only major growth area of fish sales, as have chilled ready-meals in general. Lifestyles associated with long working hours, increasing numbers of people living, eating and snacking on their own as well as declining cooking skills and an endless demand for more exotic food, have all contributed to the growing popularity of chilled ready-meals. The development of the sector has been spearheaded by retailer labels, which in turn are produced by major food companies such as Northern Foods, Hazlewood Foods and Geest.
Frozen fish products remain the largest segment of the retail fish and fish products sector. This contrasts with most other major European countries, where fresh fish is the single most important segment. Sales growth in frozen fish products has, to some extent, been stifled by competition from other frozen convenience products as well as chilled dishes. Coated fish products and fish fingers are the most important segments. Frozen fish products continue to benefit from the commitment of key brand players such as Birds Eye Walls and the newly formed Youngs Bluecrest Group. Retailer own labels also account for a substantial proportion of sales volumes.
Canned fish continues to hold its own in a highly competitive environment. The sector is highly price-driven. One of the symptoms of this was the greater degree of volume than value growth in the sector during 2000 compared with the previous year. Tuna was largely responsible for this. John West and Princes continue to account for a substantial proportion of sales, with a combined volume share of 46.2% of total canned fish retail sales in 2000. Tuna spearheaded growth in the canned fish sector as a whole in 2000.
With intense competition has come consolidation in supply. Heinz acquired John West, and Youngs Seafoods and Bluecrest merged their interests to create an even larger player in the frozen fish products sector.
Total retail sales of fish and fish products are forecast to fall by 0.3%, from 350,100 tonnes to 349,200 tonnes between 2000 and 2004.
With the exception of value-added chilled fish products, retail sales of all other fish product categories will, at best, remain static between 2000 and 2004.
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