Soaring production costs, declining exchange rates, and higher consumer and producer price indexes may force a reckoning when it comes to recent gains in global seafood consumption, according to Mike Turenhout, a fisheries and trade expert with the Dutch Fish Federation (Visfederatie) and a member of the E.U. Fish Processors and Traders Association (AIPCE-CEP).
“Consumers have less to spend and that’s visible in the demand for seafood in the short-term. I expect we will have to pay more for the basics in the near future – food, mobility, healthcare, etcetera – and the question is how does seafood fit into this picture?” he said. “I think, and we are already seeing this happening a little, there will be a decrease in seafood consumption. There will be less demand and that will affect prices. My expectation is that the price of raw materials will go down a bit in the near-future.”
Europe’s seafood sector is not alone in facing these intense inflationary pressures – in fact, it isn’t even the most-affected food category, according to EUMOFA Analyst Lucas Herry.
“There has been strong inflation for all food products, but fish and seafood has been more resilient to inflation than other global products. Meat, bread, and cereals have all experienced heavier inflation since the end of 2021,” he said. “Compare this to the past decade when the natural inflation for fish and seafood products was quite a bit higher than for other food products. This doesn’t seem to be the case anymore and other products are experiencing more inflation.”
There could be a number of reasons for this, Herry said.
“While it might be attributed to those other food groups being more dependent on energy, it could also be that compared to other foods, fish and seafood has already reached high enough price levels that the margin of inflation compared with consumers’ willingness to pay is reduced,” he said.
Salmon was in fact the only seafood product to buck the declining consumption trend seen in German retail in 2022, according to Jürgen Pauly, the marketing and sales manager for hypermarket chain Globus.
Globus has seen strong price increases across all of its biggest-selling seafood species, and this this has led to falling demand from German consumers, who have shifted to some extent to buying other proteins, Pauly said.
“We have tried to keep prices stable through contracts, but during 2022, Globus faced strong price increases, especially in salmon and whitefish products,” he said.
Despite salmon products being more expensive and more affordable species being available, German consumer behavior remains “very stable,” with customers continuing to ask for salmon – the most important product in the market – despite it “having the highest prices that we have ever seen,” Pauly said. “We cannot change the importance of salmon in the market – that’s a fact.”
Discounters, which are a strong part of the German market, are also struggling with the current price of fish. These are, he confirmed, also being driven up by higher logistics costs, particularly with the country being highly dependent on imports and tending to source seafood products from Scandinavian producers.
“Consumers are looking for alternatives – for cheaper proteins. Pork prices have been decreasing and there’s been a trend from fish to pork and other proteins,” Pauly said. “But we do have one chance. We’re looking to produce more convenient products, with more vegetable components that reduce the cost of the seafood. That’s especially what we are seeing in the category at the moment.”
Photo courtesy of Globus
