A recent look at the market for coated seafood products in France, Spain and Italy, by Bruno Correard consulting for Seafood Scotland, found a price-driven sector that is beginning to gain ground as consumers look for cheaper products.
“The French, Italian and Spanish markets for coated seafood products have clear similarities in that they are all price driven, but there is room for development,” said seafood consultant Correard, in the report.
In France, sales of coated fish products are the third largest in Western Europe, after the U.K. and Germany, and are worth around EUR 305 million (USD 415.4 million). Frozen products account for 87 percent, and just 13 percent by chilled products. Around two-thirds of the volume (30,000 metric tons (MT)) is sold in the retail sector, with 29 percent (12,000 MT) going through foodservice outlets. Ninety-nine percent of all chilled coated seafood products are sold by the retail sector.
The Italian market is fourth in terms of value, with total sales worth more than EUR 205 million. Retail accounts for around 90 percent of the volume of 28,500 MT, and foodservice for just 10 percent at 3,000 MT. Chilled products are at an early stage of development and are currently limited to the foodservice sector.
Spanish consumers eat less coated fish products than their neighbours, and with total sales worth just EUR 131 million (USD 178.4 million), the market is fifth in size. The retail sector represents 93 percent of the volume of 30,267 MT and foodservice for 7 percent at 2,049 MT. The chilled segment here is also under development, and restricted to foodservice.
Correard found a 40:33:27 percent split between coated portions, fish fingers and other coated products in France, with the coated portions segment undergoing a revival since the introduction of preformed portions 5 years ago, and new breadcrumb formats in 2012.
“France has become the Holy Land for fast-food companies in recent years, with McDonald’s finding it the second most lucrative in the world after the U.S., and newcomers such as Burger King, Subway, and KFC making the country a development priority,” he said.
“This has led to seafood processors focusing on rejuvenating the category mix, and targeting teenagers with a range of hamburger-like coated portions for easy snacking. These have a heavy coating of up to 45 percent Japanese crumb compared with the 40 percent for traditional coated portions, and up to 55 percent for potato-based coatings,” he said.
“For example, L’Assiette Bleue launched a microwaveable Alaska pollock fish burger onto the retail chilled coated fish market in January 2014, and sales are gaining momentum.” The fish finger sector is stable in France, but Correard finds that it is characterized by marketing hype and TV ads rather than quality, with several brands gradually replacing the 100 percent fish fillet finger with fish mince, with a market standard of 60 percent fish to 40 percent coating.
“Low prices are somewhat driven in France and in Italy by a perception that coated seafood products are second class, and in all three countries, by the economic downturn which is still biting hard,” said Correard.
Competition between processors also plays a key part in keeping prices low, especially in France, where Findus/Iglo are currently battling to gain market shares on each other, and on the retailers’ private labels that historically dominate the French market.
In Italy and Spain, there is a greater diversity of coated seafood products, such as squid, octopus, cuttlefish, mussels and shrimp. There is also a difference in the type of fish used, with hake dominating the market, compared to Alaska pollock and saithe in France. Batter, (“fish & chip” style), is a favorite coating on Italian and Spanish fish and mollusk/crustacean products, rather than breadcrumbs.
“Both of these markets remain conservative in terms of coated products, with very little product development in recent years,” said Correard. “Between 2009 and 2011 for instance, Spain and Italy accounted respectively for just 3 percent and 2 percent of all new coated food products in Western Europe, compared to 8 percent in France. The most active markets in this sector are the U.K., with 46 percent of the product launches, followed by Germany (19 percent) and Ireland (9 percent).
There are growing concerns about quality issues in Italy and Spain, but the ongoing economic downturn has not helped processors to offer better coated seafood products in these markets, and national brands in the retail sector have replaced fish fillet from block with minced fish.
However, ongoing diet and health related controversies in both countries have forced seafood producers to react accordingly and improve their coatings. A recent Spanish-Portuguese study showed that raw fish fingers fried at home contained 3 times more furans (toxic chemicals) than pre-fried fish fingers reheated in the oven. In response, the major suppliers have introduced pre-fried coated products onto the market, whereas this has been standard in France since 2000.
In all three countries, there has been a reduction in the number of seafood processors, and the frozen segment has clearly grown as a mass-market of major volumes and low margins.
However, Correard predicts that volumes of chilled coated seafood products may increase significantly in the coming years as a result of the fast development of online shopping requiring convenience pre-packed food products, and the development of pre-packed chilled cabinets in medium-size supermarkets and discount retailers who were not historically equipped to sell chilled seafood products.
