Ireland's seafood industry seeks a value-added edge
Finding the best way to leverage raw material availability while building a stronger foundation for the future is the top challenge currently facing Ireland’s seafood industry and will be the top priority for state agency Bord Iascaigh Mhara’s (BIM’s) next long-term business plan.
At the recent annual Humber Seafood Summit organized by Seafish, Tara McCarthy, CEO of BIM, told delegates that while there was no denying that seafood was on trend – ticking important boxes relating to consumer health, convenience and feeding a growing global population – and that while it initially appears that things “couldn’t look better” for the seafood industry in Ireland, there were reasons why “we aren’t getting completely excited” about its potential and proclaiming it the winner in these particular agendas.
On closer inspection, it’s “a very complex industry and it’s not as easy as just turning it on to meet the demand for it,” acknowledged McCarthy.
By bringing in external help to talk to the Irish industry and ascertain why it’s largely missing the mark despite the inherent trends, she said BIM had learned that it’s hard to exploit its full potential when volumes are capped and when the sector is highly fragmented with lots of small players that are very much production driven – wanting to catch or grow fish rather than add value. At the same time, there is no unified voice and while the government is heavily involved in the industry, it is not always seen as a supporter or enabler, which creates tension and often leads to an aggressive relationship.
“Due to that tension, we’re also seeing a frustration whereby even if all those issues were addressed, we would still not be capturing all the value that we could be because our supply chains are not aligned,” McCarthy said. “And because 70 percent of our sales are as commodities, we are not capturing the value opportunity. Also, there’s no feedback loop from consumers – we are not hearing what they want from us and then looking to make things better.”
Furthermore, she said there’s also limited scope to invest in brands or innovation at present, and the seafood industry is far from winning the war for talent.
“If you have your master’s degree, are you going to Google or coming into the Irish seafood industry?” she asked rhetorically.
Now though, BIM is looking to create a business plan that focuses on treating the industry as a business – one that creates the right capability and also improves its “attractability” – its ability to attract more talent and investment.
“As we create the next business plan, we know that we have got fantastic products, but we also know that we are not leveraging the opportunity to capture their value, and that’s the challenge that we have set ourselves and establishing where we go from here, because we have written lots of reports on the dichotomy but we are not getting the results or aligning ourselves to it,” she said.
It’s not all a disaster, and there are some “fantastic things” happening in Ireland that can underpin such a business plan, including BIM, the Marine Institute, the Irish Food Marketing Department and the national banner for food sustainability “Origin Green,” stressed McCarthy.
“We do have some solid foundations there, but we could be doing much more. So we are starting a ‘call to action’ and creating a vision that everyone can align behind,” she said. ““The main strategy is to create and capture value, because we feel that at the moment, with the commodity approach that we are currently taking, we are squandering value-creation opportunities and profitability. We need to become high-value suppliers.”
To achieve its idealized vision, BIM wants the industry to scale up its differentiation; thereby creating value in Irish seafood products that is appreciated by consumers. Also, alongside providing consumers with more tailored and market-informed choice, it wants to engage and align supply chains behind these efforts.
“The goal then for everybody is to sell less as a commodity,” said McCarthy.
Indeed, BIM has been given the target over the next 10 years to reduce the level of commodity sales down to 50 percent, and to fulfill this aim, the authority will focus most of its energy on building four core pillars: capability and talent, sustainability, innovation, and competitiveness, and aligning these efforts with market demand and what the industry’s customers and end-consumers want.
Thanks to E.U. funding – amounting to almost EUR 250 million (USD 277 million) over the next four years – there is money available to invest in these key areas, she said.
“To summarize, it’s all about moving away from being a production/commodity-driven industry and to starting to think about value creation and what our customers actually want,” said McCarthy. “Probably most importantly, it’s about moving away from being a very short-term industry to taking a much longer-term perspective. “We are not trying to think bigger in Ireland, taking the fish from everywhere and exploding our production; what we are looking to do over the next number of years is to think better. We believe thinking better will enable us to capture value in a much better way.”