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THE FUTURE of the FRESH FISH Market

THE FUTURE of the FRESH FISH Market. personnel views to stimulate discussion & possible actions. the Fresh Fish Market. Yesterday When everything was better Today Problems, always problems Tomorrow Surely it cannot get worse !. Yesterdays Fish Market. Predominantly FRESH

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THE FUTURE of the FRESH FISH Market

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  1. THEFUTURE of the FRESH FISH Market personnel views to stimulate discussion & possible actions

  2. the Fresh Fish Market • Yesterday • When everything was better • Today • Problems, always problems • Tomorrow • Surely it cannot get worse !

  3. Yesterdays Fish Market • Predominantly FRESH • Local or Regional • shout auction • payment guarantee • MANY retail outlets • Exports PROCESSED • dried • salted • smoked • frozen

  4. Globalised EU imports more than it catches Retail dominated by Supermarket chains 75% in Europe Auctions professional automated In competition Direct Sale Other auctions Farmed fish Imports Falling volumes Fewer fishing boats Less fish landed Reduction in buyers Prices static Real value reduced € = cheap imports Exports include fresh Airfreight Chill container Costs Rise whilst Income Falls Fresh Fish market TODAY

  5. EFAD project identified long term fall in first point of sale fish prices in real terms European Fish Auction Datanet Looking back over 25 years + Fish Catch Index - Tonnes • 1960 111 • 1970 147 • 1980 100 • 1990 72 • 2000 66 • 2005 55 source FAO statistics Fish Prices Index - real terms • 1980 100 • 1985 92 • 1990 105 • 1995 84 • 2000 88 • 2003 88 • 2005 ? ? ? Based on UK DEFRA statistics

  6. Update study by EAFPA (2003-2005) confirmed that this problem continues

  7. TOMORROW ? OR THE NEXT DECADE THREATS? • Reduced catch levels • Failure to Rationalise • Too many independent auctions • Lack of Identity • no recognised brand for fresh captured fish • Low Cost Imports • Farmed product • Illegal Fishing • Direct Purchase • By supermarkets • Chickenisation • Fish as a commodity fewerfishermen smallerlandings reduced buyer competition increased unitcosts Socio-economicFAILURE

  8. FUTURE of the FRESH FISH MarketIS THERE ONE? I THINK THERE IS Provided WE ACT NOW To prepare for tomorrow…

  9. Objective: for the fish sales organisation • Maximise unit values • fish prices per kilogramme • Minimise unit marketing cost • defray fixed expenditure • Offset central purchase control • Avoid there being a dominant buyer • Establish long term markets • To complement long term investment

  10. Replace Volume With Value New business services products utilising assets Embrace Quality BRAND it SELL it DELIVER IT Change price dynamics repackaging distribution vertical selling own account partnering others Sales platform for Farmed fish Imported fish Promote WILD fish as the new organic HOW?

  11. Scale EconomiesSupply Volume Leverage BUYERS LIKE VOLUME and CHOICE EXPERIENCE HAS SHOWN THAT THEY DESERT FAILING AUCTIONS logistics services sales services Market development auction wholesale supermarket contract consumer direct

  12. Auctions (and the ports they operate) have a proven track record in innovation • EU regulations • Vessel Design • Premises • Grading • Packaging • Cool Chain • E-commerce • Money Transfer

  13. SALES arethe KEY Quality can not be compromised TAC’s are unlikely to increase Costs continue to rise in real terms Continuous development and investment needed Maintaining a viable sector?

  14. Fish Prices at first sale • Lack elasticity due to alternative • species • sources of supply • food products • Do not reflect production cost • Are subject to globalisation • and the buying power of the €uro • Fish is in danger of moving to a commodity basis • through centralised buying policies • Homogenisation of products • “CHICKENISATION”

  15. Can we build on e-commerce Exploiting existing buyer contact While developing new Or is it an opportunity missed?

  16. first ‘auction clock’ was made in Utrecht 1902(electro-mechanical) • Dutch Auction (falling price) • Effective for fresh products • Flowers • Vegetables • Fish… • Physical presence required

  17. Computers arrive • first for administration • Records • Accounts • then as the auction ‘engine’ • linking sales . to billing

  18. Today there are many Fish e-auctions • Fair • Transparent • Efficient • Effective aiding • Traceability • Business

  19. Some Fish e-auctions

  20. e-auctions • Technology has changed what we do • and how we do it • Electronic Retail is now ‘normal’ • ebay has brought internet auctions into the home • Flights and Travel are booked online • In UK Tesco, supermarket chain, has 5 million internet customers • Shop Online – Store delivers • e-commerce now valued at €7 trillion pa (Forrester Research Inc.) • Fish Auctions have used Electronic Auction for decades • Present systems well established • Potentialstill to be realised…

  21. e-commerce upward trend continues • UK online purchases in 2003 • B2C €170 per capita • fish is bought online • by Trade B2B • by CONSUMER B2C • 300% growth in B2Cby 2008 (Forrester Research) • EU B2B e-commerce in 2004 €250.000.000.000 • Fish Auctions are B2B • What is growth path? • NEW product • B2C ?

  22. Can fresh fish Auctions and their suppliers, fishermen and fish farmers, benefit from the growth of direct consumer buying over the internet • Consumers will not pay more • Introducing efficiencies through direct supply should increase producer income • Auctions provide a secondary sale outlet • Adopting volume internet trade terms • Investing in systems, staff and service • On the back of this • Quality products could be delivered • To the ‘upper quartile’ of consumers that will pay a premium for “the best” • From a mobile phone tomorrow’s fresh fish could be ordered today • Cheap, simple to use, tomorrow is here today!

  23. Buying Unseen • Consumers will buy based on description • Where this is backed by a ‘standard’ • Witness ebay sales • EAFPA has considered developing an EAN codebased on productnotprocessor • This could form a common ‘standard’ • Providing: • Information on what it is and where it came from • Not a subjective ‘quality’ but just data facts • As ever funding is the prime issue • But can we wait, doing nothing • Or make a start as part of a certification scheme • Ecolabel – Traceability – Service Quality

  24. Futuree-commerce ??? • Direct Sale • to end customer • Seamless Buying • Buy many places • Delivery inclusive • Track & Trace • RFid • SMS (mobile phone) • 3G web systems • ebXML (OASIS)

  25. Smart Sales systems help but they are no substitute forunderstanding, andmeetingProduct Demand • Auctions may only receive information on consumer trends ‘second hand’ • Large supermarket chains are taking an ever growing share of fish retail supply • Perceived ‘wisdom’ may be false • e.g. fish is ‘price capped’ by the consumer • Unfulfilled demand may exist • The customer (consumer) • is King (and Queen) • Do theyknow what could be available…

  26. Retail Trends – Consumer Choice • Supermarket chains • 70% of chilled fresh • 90% of frozen fish • 90% of pre-prepared • Consumers • Price driven purchases • Organic Healthy Food • Quality & Eco Labels • Fresh and Traceable Supermarkets can control Local prices Consumers look for Quality labels Supermarkets promote THEIR OWN brands Fish bought (imported) at lowest cost

  27. An EU directive has decreed that nothing captured or harvested from the wild can be labeled as 'organic'. Currently only farmed fish can be given the organic label Natural feeding being uncontrolled and unsupervised Certification bodies contend with: pollution levels in the sea over-fishing and depleted fish stocks environmentally aware fishing techniques pesticides treatments in conventional fish farms Wild, captured fish, if they can not be organic (!?!) can be Environmentally acceptable Ecologically sound Traceable Certified as ‘free range’ Ecolabeling must not become the province of the retailer They promote Own Brands Not source products Traceability can be used as a tool to promote wild fish In combination an 'eco-friendly' labelling system that give guidance for the concerned consumer could be the NEW ORGANIC Organicproduce has captured a small, but significant, share of the fresh food market: those willing to pay a premium for quality food from an environmentally acceptable source.

  28. In an increasingly Globalised marketplace Auctions must be proactive delivering what the buyer wants Even if they do not know what this is until it is supplied Working with fishermen to maximise Quality Providing the essential link for Traceability promoting end consumer confidence ensuring that Fishermen make a reasonable Return (on their catch) and Buyers also Return

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