Where Norway sees extra opportunity in the UK seafood market
Norway’s exporters of salmonids and whitefish plan to seize upon the United Kingdom’s voracious appetite for these seafood staples and their own devalued currency to ramp up sales into the market this year.
Maintaining its position as the world’s 2nd largest seafood exporter, the Scandinavian country shipped a total of 2.6 million metric tons (MT) of seafood in 2015, worth NOK 75 billion (EUR 7.9 billion; USD 8.6 billion) – an increase of NOK 6 billion (EUR 634.6 million; USD 686.3 million) on the previous year. Exports went to 143 countries, and to increase these market shares further, the Norwegian Seafood Council (NSC) will spend NOK 487 million (EUR 51.5 million; USD 55.7 million) on promoting the country’s products worldwide in 2016, some 67 percent of which will go toward marketing its farmed salmon and trout.
Of the well established consumer markets, the United Kingdom is among the most important for Norwegian exports, ranking second behind France in value terms, but showing much more growth, said Jack-Robert Moller, NSC director for the United Kingdom.
Last year, the United Kingdom imported more than NOK 5 billion (EUR 528.9 million; USD 571.5 million) worth of Norwegian seafood, representing an increase of NOK 1 billion (EUR 105.8 million; USD 114.3 million) on the total achieved in 2014. In volume terms, it was also the biggest growth market for Norwegian salmon for the third year in a row, importing more than 14,000 MT in 2015, which was 24 percent more than in the previous year.
“I think this trend will continue in 2016,” said Moller. His reasoning is that in the second-half of 2014, there was a shift in the U.K. salmon market, whereby Scottish production couldn’t fulfil the domestic demand to its usual level and so additional Norwegian salmon exports filled the void – to the point where they accounted for 70 percent of U.K. consumer market in the early part of 2015. These exports have maintained a higher than before market share ever since, a situation that has been helped by the steady decline in the value of the Norwegian kroner.
The currency change, he said, “has left many markets with an attractive price,” particularly for salmon.
“There has been a tremendous growth in salmon consumption among U.K. consumers in recent years. Even with the price increase in 2014 there was significant growth within this category, including a lot in the lower social groups C,D and E. It’s a very good story,” said Moller.
He also anticipates that the UK market will increase its imports of Norwegian fjord trout, whereby within five years it will account for 5 percent of its total production as more consumers buy into the product. Last year, Norway produced close to 53,000 MT of the product.
In addition to salmonids, Norway grew the value of its codfish exports by 12 percent to a total of NOK 13 billion (EUR 1.4 billion; USD 1.5 billion) last year, including more than NOK 1.1 billion (EUR 116.4 million; USD 125.7 million) from the U.K. market, 11 percent more than in 2014. Again, Moller anticipates there being a similar pattern in the trade this year.
Within the codfish category, there were small decreases in the volumes of fresh and frozen H&G cod it supplied to the U.K. market. This was largely due to a lack of availability, brought by the reduction in Norway’s catch quota. It was, though, able to supply more haddock.
Moller confirmed that in 2015, Norway caught 418,000 MT of cod, down from 473,000 MT in the previous year. The country is expected to catch about 420,000 MT this year. It is also expected to catch 121,000 MT of haddock in 2016, an increase of 26 percent on last year.
“I always say that the U.K. is the biggest cod market in the world and that it is very price sensitive, whereby if the price gets too high, it switches to other species. But despite some price increases, the general consumption of fresh cod in the market has grown by 3.5 percent over the past 12 months. Frozen cod has grown as a category by 3.1 percent too.”
Haddock, however, is quite a different scenario, explained Moller. The U.K. consumption of this whitefish has dropped in all categories over the past three years, mainly due to falling quotas and subsequent price increases.
“It has had a difficult time, where the price changed and customers switched to other products. Even though the price has come down, it still loses customers. It’s a serious task for us – to work with industry – to try to recover some of the haddock market,” he said.
As part of its strategy to capitalize on the increased consumption trends in the U.K. market and to align itself closer to the restaurant and foodservice sectors, NSC will soon launch an online “Seafood Academy,” providing dedicated content for chefs of all levels and experience about Norway’s key export species. Launching for cod at the start of February and then expanding to salmon later in the year, the new learning portal will aim to further users’ understanding of the supply chain and fisheries management.
NSC also intends to reach these sectors by broadening the “Union Norge” program it launched last year to encourage some of the country’s leading fish and chip shops using frozen-at-sea (FAS) Norwegian cod and haddock to become ambassdors for the products.