New seafood trends are emerging from the COVID-19 pandemic and rapidly rising inflation in Europe, according to a panel of industry leaders and policymakers at the 2022 Seafood Expo Global in Barcelona, Spain on Tuesday, 26 April.
The pandemic has upended Europe’s seafood marketplace, and rising inflation has been exacerbated by Russia’s invasion of Ukraine, according to Auden Lem, the deputy director of the United Nations Food and Agriculture Organization’s Fisheries Division.
“There is an overall slowdown in economic growth and purchasing power has fallen, and with it, consumption [has also fallen], because the cost of food and of cooking food have risen,” Lem said.
The European Union’s annual inflation rate reached 6.2 percent in February 2022, up from 5.6 percent in January 2022. A year earlier, the rate was 1.3 percent, according to the latest repot from the European Market Observatory for Fisheries and Aquaculture Products (EUMOFA). Seafood prices were up 4.9 percent in February 2022 compared to a year prior. With Russia invading Ukraine on 24 February, 2022, inflation has risen more steeply, with the E.U. fishery and aquaculture sectors “directly impacted by the consequences of the war in Ukraine” due to an increase in the cost of marine fuel and electricity resulting in higher costs for seafood production and processing, EUMOFA reported.
“Temporary interruptions of activities have been observed at the beginning of the crisis since a high share of E.U. fishing vessels were below their break-even revenue point and do not cover their operating costs. Transport and logistics (sea, road, air) have also been negatively impacted creating disruption in food supply chains,” EUMOFA said. “Shortages of key raw materials and inputs are affecting the processing sector (e.g. sunflower oil) and aquaculture sector (e.g. fishfeed) as Ukraine and Russia are major global suppliers of these goods. Shortages are also expected for substitutes due to competition from other agri-food sectors and from bioenergy production. This negative supply shock is increasing pressure on prices, which is likely to generate increase of prices up to the consumers.”
While EUMOFA predicted a negative demand shock as a result of higher seafood prices, it also warned that combined with the elevation of Europe’s seafood demand through the pandemic, there could instead be a substitution effect toward cheaper, imported seafood products.
Given Europe’s global power as one of the world’s largest markets for seafood, Lem expressed concern this trend might challenge developing country efforts to add value to key commodities like tuna. Producing countries are keen to extract more value from their tuna products, explained Lem.
“However, if everyone is competing on price, then the quality of the product goes down, too,” he said.
European Association of Fish Producers Organisations Esben Sverdrup-Jensen called for a “leveling of the playing field” to protect E.U. seafood firms against lower standards in products imported into the bloc, which imports two-thirds of the seafood it consumes.
That call was echoed by Roberto Carlos Alonso Baptista de Sousa, the deputy secretary general of Spanish industry group ANFACO CECOPESCA, who said the Spanish industry is struggling to cope with rising costs while consumers become more price-conscious due to inflation, which this year peaked at 10 percent in Spain early in 2022.
“The challenge is how to capture value in unpredictability,” de Sousa said.
De Sousa called on Europe’s seafood industry to “innovate permanently” by leaning into certain innovations forced upon the sector by the pandemic, among them “collaborative logistics” and other synergies. He further suggested seafood business consider relocation of business activities and locations, as some did to reduce disruption during the pandemic, which caused a massive surge in demand for seafood on a year-on-year basis – at one point as high as 80 percent in Spain.
De Sousa said it was incumbent upon the European seafood industry to capitalize on the opportunities presented by seafood’s popularity during the pandemic, such as the “premiumization” of certain products as consumers branched out from their normal retail purchases while under lockdown. He also recommended raising the standards of labeling and branding of canned and packaged seafood products, which achieved some of the most-significant growth of all seafood product formats in the past two years.
Sverdrup Jensen said he believed the habits formed by the European populace through the pandemic will be enduring. Describing an embrace of canned seafood as a “comfort food” in his native Denmark during the pandemic, he said digital platforms had rapidly arisen to channel all types of seafood previously headed for commercial clients directly to consumers. Now, as the foodservice sector returns to health in Denmark, Sverdrup Jensen said canned seafood remains popular even in the hospitality sector there, opening the way for further innovation in labeling and the use of recipes to create value.
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