The challenging trading environment was confirmed by the National Association of Wholesale Fish Markets (ANMAPE): “The economic and financial crisis affecting the Spanish economy has become detrimental to the fisheries sector, which in recent years has been undergoing a deep restructuring process. The sector is too fragmented and the restructuring of small businesses must adjust to the real market situation.”
Representing 387 companies operating across Spain’s 12 largest fish markets, ANMAPE trades around 70 percent of the nation’s coastal fresh seafood. “If we can adjust our structure to the needs of the market,” a representative explained, “a more powerful industry can emerge from the current crisis. The adjustment promises to be painful, but is absolutely necessary. We’re trying to help businesses in these difficult times, looking for alternatives for collaboration, help with financing, promoting and finding new markets, developing new technologies and alternative marketing strategies.”
Summarizing national trends to 2016, industry researchers emphasize the extent to which marketers face major challenges. With private label products accounting for a significant share of the domestic market across all categories, there is around 25 percent penetration in all but the dried seafood sector, where penetration is closer to 75 percent. Dominated by a few major brands, “segmentation of the market is widespread” with room for private label to grow further, forcing leading brands “to maintain their focus in order to avoid becoming a target for private label competition.”
Focusing on Spain’s higher consumption of fresh compared to frozen seafood, the report states: “Any changes in consumption rates in these larger markets will have a significant effect on market values and shares. A large proportion of Spanish consumers highlight specific trends that influence their consumption. Consumers are therefore acting on these trends enough to ensure that targeting them, in the right categories, is essential to success.”
The sluggish economy took its toll on employment levels during the last quarter of 2011. Of Spain’s active population of just over 23 million, its commercial fishing and aquaculture sectors employed 39,400 people — 33,300 male, 6,000 female — a combined drop of 2.2 percent over the previous three quarters.
On the global trading front, 2012 has been a turbulent year so far for some Spanish fisheries. The ongoing dispute over the EU’s Fisheries Agreement with Morocco prevents Spanish vessels from entering Moroccan waters; 661 crew members affected will each receive EUR 45 (USD 60) per day for six months, back-dated from 14 December 2011, while 69 vessel owners will receive EUR 100 (USD 133) daily. Spain’s Fisheries Ministry anticipates the new agreement will start before 14 June.
Spanish fishing association ANFACO–CECOPESCA also expressed concern in April over the Interim Economic Partnership Agreement between the EU and the Pacific Region, repealing the rules of origin for processed seafood products granted to Papua New Guinea.
Closer to home, the Federation of Andalusian Fishermen (FAF) is at loggerheads with the Royal Gibraltar Police (RGP) regarding overzealous patrols that have prevented FAF from fishing in waters around the Rock since March. The dispute arose from RGP’s implementation of local regulations set by Gibraltar’s Environment Department, despite the fishermen reasserting that their traditional fishing practices conform to EU and Spanish law. Having received FAF’s proposals concerning where and how they can fish, the department said in April: “The proposals will be given full consideration to determine the technical issues arising in respect of the differences between the laws of Gibraltar and the EU.”
Spanish fishermen will, however, be the main beneficiaries of the EU-Mozambique fisheries protocol to be approved in May, under which the EU will pay EUR 980,000 (USD 1.3 million) annually for access to the southeast African nation’s fishing zone by 43 EU tuna seiners and 32 surface longliners on the basis of a sustainable catch of 8,000 metric tons per year until 31 December 2014.
M&As
Notwithstanding precarious trading conditions, Spanish companies continue to adapt to global market forces through mergers and acquisition (M&As), as well as growing organically through new product development and geographical expansion.
In April this year, Italian canned food operator Bolton International Group acquired 40 percent shares valued at EUR 125 million (USD 165 million) in canned tuna company Grupo Calvo — shares previously held by Spain’s Novagalicia Banco (11 percent), Banca Cívica (5.5 percent) and the Deposit Guarantee Fund (5.5 percent). A Calvo statement said Bolton’s capital injection “is positive for all parties involved,” adding that the purchase “does not change anything in terms of management, strategy or the group’s control.”
Calvo is also in talks with South Korea’s largest tuna producer, Dongwon Group, over Dongwon’s 50 percent stake in Calvo’s operations, worth EUR 133.4 million (USD 176.4 million).
Pescanova reported EUR 2.24 million (USD 3 million) equity investments at financial at the end of fiscal 2011, up from EUR 149,000 (USD 197,500) in 2010, in addition to declaring EUR 358,000 (USD 474,500) long-term investments and EUR 1.74 million (USD 2.3 million) short-term investments at year’s end.
Based in Girona with operations in the United States and China, Easyfish General Manager Joan Gimbernat commented on the company’s supplies of freshly frozen and salted seafood: “Since beginning in 2004, we’ve always considered seafood business from a global perspective, and based our growth and development from sourcing raw materials to final product. Only by taking such a world view have we been able, today, to look to other markets and keep ahead. Our business interests are not solely focused on Spain, in spite of it being our natural market for final products. We suffered a significant 20 percent reduction in sales here during 2011. However, we’ve been largely compensated with a more than 40 percent increase in export sales.”
China’s increasing foothold in global trade has paid off for Easyfish since exporting seafood caught by Spanish fishermen in NAFO, West African and South American waters to China and other Southeast Asian countries from 2007 onwards. Owned by Chino-Spanish seafood exporter SINOPESCA GROUP in Qingdao, Easyfish acts as purchasing company with responsibility for achieving strategic alliances with key suppliers in different fishing grounds.
“We’re now selling more than 20,000 metric tons of raw materials to China,” explained Gimbernat, “where 20 percent of material is for our own processing for re-export, or domestic sales to the foodservice sector, 5* hotels and supermarkets in retail packs under our brand. Some of our clients for final products have become key suppliers — we value this high level of trust, it’s a mutually beneficial relationship, and we invite more suppliers working to the same objectives. Our SINOPESCA GROUP has recently reached an agreement with Bord Bia, the Irish Food Board, to develop sales of new commercial species of boarfish in Chinese domestic markets. This is a strategic plan for both parties.”
Another brand venturing into Chinese territory is La Gula del Norte, owned by Basque Country-based Angulas Aguinaga. In May the company will begin distributing baby eel surimi products to high-end Chinese supermarkets, restaurants and Shanghai chain stores.
Meanwhile, Madrid cold-storage group Friologic announced plans in April to fund two fish sector projects in the Atlantic Ocean island of Cape Verde, confirming a loan of EUR 12.8 million (USD 17 million) to build new processing, freezing and canning facilities on the Cape Verde island of São Vicente, in addition to providing support to Spanish companies operating in Cape Verde.
With Spain as its largest export market, the Vietnam Association of Seafood Exporters and Producers said in March: “Spanish people consume frozen fish more than fresh or live fish and they buy at supermarkets rather than traditional fish markets. They like shrimp, squid, cod and tuna, demanding high quality, imported value-added seafood products. But they have to consider buying products with a reasonable price amid economic recession in Spain as well as the EU.”
Aquaculture
Concerted efforts are underway to push Spain’s aquaculture agenda. University of Cantabria consumer surveys published in March found that seafood restaurant diners knew more about and ate more farmed species than those who only ate seafood at home.
Through its new co-managed Global Initiative for Life and Leadership through Seafood (GILLS), the hospitality sector is singled out as a useful channel to spread positive messages about aquaculture, with the inclusion of farmed seafood products on restaurant menus helping to increase knowledge and consumption. GILLS aims “to turn up the heat and challenge people to find different ways to get the healthy seafood message to consumers, the media, health professionals and governments.”
Spain’s sea bream aquaculture production is predicted to fall to 14,500 metric tons this year from 19,000 metric tons in 2010 and 16,500 metric tons in 2011, the same volume as predicted in 2013.
Sea bass production is predicted to fall to 9,000 metric tons this year from 13,000 metric tons in 2010 and 10,000 metric tons in 2011, again the same volume as predicted in 2013.
The Global Aquaculture Alliance predicts Spain’s turbot production will increase to 9,000 metric tons this year from 8,500 metric tons in 2011. Real price per kilogram will rise to EUR 6.80 (USD 9) this year from EUR 6.42 (USD 8.50) per kilogram in 2011.
Barcelona-based Proyecnova Group announced plans in April to invest EUR 10 million (USD 13 million) to increase production capacity of its integrated breeding, processing, packaging and marketing operations. Timing and quality top the company’s agenda. The amount of fish extracted daily from its breeding center in Girona is determined by its Comercial Base Viva sales department, depending on the number of orders to be filled each day.
Pescanova President Manuel Fernández de Sousa-Faro also announced in April that aquaculture represented one-third of operating income in 2011, and that by 2014 operating profit from aquaculture will equate to that of its traditional business. Sousa-Faro does not expect its domestic aquaculture business to grow this year, but rather looks to the EUR 150 million (USD 200 million) turnover in the United States last year, now its premier farmed seafood export market.
Over in Guadalajara, in north-central Spain, organic trout producer Naturix is implementing a competitive pricing strategy that will see its farmed seafood sold at a similar price to conventional products. Based on growing consumer demand for toxic-free bio foods, the company aims to achieve large-scale production and widespread distribution of new “eco-foods,” including preserved trout, sea bass, sea bream, smoked fillets, trout roe, pâtés, pickled trout, fish burgers and other all-bio delicatessen.
At the national strategic level, concerns arose in March over the Fisheries Ministry budget for aquaculture. “It’s disappointing that the aquaculture budget doesn’t even amount to EUR 1 million (USD 1.3 million) out of the total EUR 54 million (USD 72 million) fisheries budget. This represents only 1.72 percent, while aquaculture accounts for more than 20 percent of Spain’s total fish production,” said professor Miguel Jover Cerdá at University Polytechnic Valencia.
Sustainability
In its 2011 study of organic produce and eco-labeling in four member states including Spain, the European Commission highlighted Spanish consumers’ indecision in buying organic and eco-labeled products. “Consumers in Spain who were as well aware of the EU eco-label as the organic label had problems deciding which labeled product to choose,” the study found.
Spain has four Galicia fisheries certified by the Marine Stewardship Council: the clam and cockle fishery from Ría de Arousa; Grupo Regal Spain hake longline; Pescafría-Pesquera Rodríguez Barents sea cod (certified in February); and the razor clam fishery from Ría de Pontevedra. Also in February, Spain’s largest retail group, El Corte Inglés, became the first to offer canned and frozen seafood bearing the MSC eco-label.
However, a report by the New Economics Foundation declares 25 May 2012 “fish dependence day” when, taking into account extractive fisheries and aquaculture, Spain’s national fish stocks will be depleted and the country would need to rely on imports. The simulated analysis began on 1 January in collaboration with the OCEAN2012 coalition campaigning for sustainable practices that will generate more jobs and affordable food under EU Common Fisheries Policy reform coming into force early next year.
