Norwegian salmon has been strengthening its position in the United States and taking additional market share in what is a growing market. In a two-part interview, Egil Ove Sundheim, director USA for the Norwegian Seafood Council (NSC), guides SeafoodSource through the trade and highlights where further growth is likely to come from.
SeafoodSource: What are the overall export forecasts for Norwegian salmon this year?
Sundheim: I have seen production estimates for 2016 at 1,160,000 – 1,170,000 MT. The expectation for the production in 2017 is suggesting an increase of 1-2 percent. Knowing the nature of salmon production, with all its unpredictable components, it is hard to be too sure on the level at this point. The baseline, however, seems to be a very small increase. Most of the salmon we produce is being exported, so the production estimates correspond strongly with the estimated volume export.
SeafoodSource: What is the perception of Norwegian salmon in the U.S. market?
Sundheim: We do measure the perception of Norwegian salmon in various markets at the consumer level. For six out of 10 U.S. consumers, the country of origin is important when buying seafood. When it comes to the market for farmed raised salmon, the U.S. market is dominated by whole fish from Canada and fillets from Chile. Norway has now a 12-14 percent share of the total market. Thirty-six percent of U.S. consumers know Norway farms salmon. With a low market share over time we find that the number of consumers stating they have any specific preference for any salmon farming origin is fairly low compared to markets in Europe. Only 6 percent have a preference for Norwegian – at the same level as Canada. As in any market, there is a strong expressed preference for domestic products and quite a large number of Americans do not know what they prefer. Over the past three years, the preference for Norwegian has doubled at the same time as distribution and marketing has increased.
SeafoodSource: What do you believe are the main opportunities and obstacles in the U.S. marketplace for Norwegian salmon as a product?
Sundheim: As in any market, one of the great challenges right now is the very high price on salmon. It is hard to attract new consumers and we [recognize] that for some restaurants it is hard to maintain their desired price bracket for the salmon dishes on their menus. At the same time, I do receive reports of a strong demand for Norwegian salmon and that the increased prices at retail is not scaring off consumers. The consumers are looking for sustainable, healthy, tasty meal solutions and Norwegian salmon has a profile that fits perfectly. There is a strong trend on the buying side to request proteins raised without antibiotics, hormones and GMOs and the Norwegian salmon farmers can deliver such products. In general, there is a tremendous opportunity in developing new product formats that will expand the presence in traditional supermarkets, like tray packs and skin packs. We are just starting to see the development of this and I believe this will expand the market in the years to come.
We also see that there are new opportunities in parts of retail where there was no distribution of Norwegian products earlier. Wal-Mart just launched a product line of frozen Norwegian salmon portions expanding their offering to their consumers, [while] the distribution of Norwegian salmon through the Costco system has increased shipments to the U.S. over the last couple of years. These exposures create attention to Norwegian products which will open new opportunities. I also see a huge potential in foodservice, especial in segments catering to the millennials. Here we have a great product with a perfect story – we just have to be able to make the foodservice industry understand how it can expand its offerings.
On the other side, I mentioned the price issue being an obstacle in some ways to attract new business. We find that there is still a lot of misconception about salmon farming in general, and also about salmon farming in Norway. There is still quite a job to do to address these issues and to counter some of the misleading and negative information that is out there. There is also some uncertainty related to the effects of the new U.S. presidency on trade in general, but this would not be a specific challenge for Norwegian products.
SeafoodSource: How have other seafood products from Norway been performing in the U.S. market in the past 12 months and what future opportunities do you see for Norwegian producers?
Sundheim: Over the last couple of years, the U.S. market has become more attractive for Norwegian seafood in general, partly due to a favorable development in exchange rates. We also see that increased trade in salmon has increased the opportunities for other products from Norway. Norwegian steelhead trout has sold quite well, there is a strong interest in Norwegian farm-raised and wild halibut, the processing industry in New England imports significant volumes of Norwegian haddock and there is a market for Norwegian king crab and also for Norwegian snow crab in the U.S. There is also a market for Norwegian mackerel and we are now exploring the opportunities for Norwegian bacalao with an increased interest both on the export and import level.
As ties between the Norwegian exporters and U.S. importers and distributors continue to develop, I think we will see an increase in volume and variety of the trade to the United States. The mainstream products like cod and salmon will gain a stronger presence in the mind of a sustainable conscious U.S. consumer and we will see a growth in ethnic segments demanding Norwegian bacalao or Norwegian mackerel drawing upon the position of Norwegian products in other cuisines and cultures.
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