An Industry-Wide Program for Marketing Canadian Seafood Products Carey Bonnell Chair SVCRT Marketing Alliance Working Group October, 2013
Jan 18, 2016
An Industry-Wide Programfor Marketing
Canadian Seafood Products
Carey BonnellChair
SVCRT Marketing Alliance Working GroupOctober, 2013
MandateTo develop a proposal for creation of a
national seafood marketing alliance for the SVCRT’s consideration.
The proposal will include: Proposed mandate Governance/structure Funding model options Value proposition to industry Challenges/impediments to overcome Other items as required
Will Joint Marketing Work? It depends …
Can industry focus on commonalities of interest, rather than differences, and speak with unity of purpose?
Can a program be designed and implemented that industry will support? Does the industry see enough potential benefits to support program design
and development and give it enough time to show benefits?
Sackton: Why Seafood Branding Matters “Consumer perceptions of seafood – both positive and negative –
depend heavily on the origin of the product” “In short, there is a premium that buyers pay for a consistent
quality seafood brand” “Few corporate brands have achieved the power of the geographic
brands” “This is because the particular fish stocks, management, and
harvesting and processing all depend on a geographic area”
BenchmarksSuccessful programs in Alaska, Norway
Can we duplicate in Canada?Agricultural models in Canada
Beef is most advanced
Alaska Seafood Marketing Institute (ASMI)Mandate Increasing positive
awareness Collaborative marketing
programs Championing the
sustainability of Alaska seafood
Proactive marketing planning Quality assurance, technical
industry analysis, education, advocacy and research
Prudent, efficient fiscal management
StructurePublic-private partnership
between the State of Alaska and the Alaska seafood industry
7 member board appointed by governor
Levy of $0.5% based on landed value of fish purchases Industry increased from 0.3 to .5
in 2004 $25 million budget in 2013
secured through industry, federal and state funds
ASMI (Financial Information)
Norwegian Seafood Council (NSC)MandateJoint marketingMarket informationCommunication and
reputational risk management
NSC leads 500 marketing projects per year in 25 different countries all aimed at increasing demand for Norway Seafood
Marketing is founded on its competencies within consumer analyses, international marketing, brand establishment, new media and PR
StructurePublic company owned by
gov.Two year board
appointments with 6 directors
5 advisory marketing groups Norwegian Salmon and
Norwegian Fjord Trout Ground fish (Cod, Saithe,
Haddock etc.) Prawns and shellfish Conventional products (Salted
fish, Clip fish and Stock fish) Pelagic products (Herring,
Mackerel and Capelin)
NSC Value Formed in 1991 to rationalize highly subsidized industry Financed by industry through fees levied on all exports of
Norwegian seafood 0.75% on all types of fish and 0.20% on processed products
Sector investments include: Salmon / Trout – 58% Pelagic – 18% Whitefish – 11% Clip fish, salt fish, stock fish – 11% Prawns / Shellfish – 2%
NSC had a total budget of NOK 414 million (approximately $72 million CAN) in 2012 to invest in its strategic areas
Export value increased from $15 billion NOK in 1991 to $53 billion ($9.2 billion CAN) in 2011 Key improvements in strategic markets i.e. Singapore & Spain
ASMI & NSC SummaryGeneral feeling that ASMI & NSC are providing value
for moneyLevy based system funded largely by industry
ASMI - $0.5% - $25 million budget NSC - $0.75% ($0.25% processed) - $72 million budget
Public funds leveraged by industry levyNeither body received initial support from industry
but are now highly valuedModels focused around branding, promotion,
intelligence, awareness and communication (no direct sales!!)
Both jurisdictions have strong brand recognition
CanadaFed/prov investment of $5-$5.5 million annually
Add industry equity in range of 25% Initiatives are generally sector specific i.e. shell
on shrimp, Atlantic lobster, etc.Not always coordinated
General sense that Canadian focus is on selling vs. marketingThere are exceptions
No one body structured to take on role similar to ASMI or NSC
Sector bodies are generally underfunded to lead thisPublic funding limited compared to other sectors (i.e.
agri-food) and other jurisdictions (US, Norway, etc.)
Jurisdiction Comparisons (2010 data)Jurisdiction
Landings (mt)*
Export Value ($)**
Estimated Marketing $’s
Canada 1,088,546 $3.9 billion $7-8 million (TBC)
Norway 3,683,302 $9.4 billion $72 million
Alaska 1,971,990 $2.5 billion $25 million
• *Landings based on 2010 FAO statistics for CAN & NOR & NOAA statistics for Alaska
• ** Export data based on 2010 statistics
• In terms of trends• NOR seafood exports grown from about $2.5 billion in 1991
to $9.4 billion in 2010• Alaska seafood exports grown from $1.2 billion in 1998 to
$3.1 billion in 2011• Canadian seafood export value has not increased
substantially over the past 10 years
Seafood Export Trends ($)
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
0
1,000,000,000
2,000,000,000
3,000,000,000
4,000,000,000
5,000,000,000
6,000,000,000
7,000,000,000
8,000,000,000
9,000,000,000
10,000,000,000
CanadaNorwayAlaska
Seafood Landings Trends (MT)2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
NorwayCanadaAlaska
Cranfield re Canadian Beef LevyCanadian cattle producers gain net economic
benefits from investment in marketing and research activities.
… between 2005 and 2008 the BCR associated with the investment of producer check‐off dollars in marketing and research activities grew from 7:1 to 11:1, with an average BCR of 9:1 over this time period.
This means that on average from 2005 to 2008, every check‐off dollar invested in marketing and research activities earned $9 for Canadian cattle producers.
MAWG: Key QuestionsAre there sufficient commonalities of interest to
justify an industry-wide initiative?What does the industry need to achieve that can best
be done through a joint initiative?How can an industry-wide initiative create value for
individual participants?What value proposition will attract industry support?How can a joint marketing initiative be designed,
organized, and implemented?How should a levy on industry to fund the effort be
calculated and collected?
CommonalitiesBoth the capture fishery and aquaculture are
underperforming relative to their potentialSeafood exports have not increased over past
10 yearsSubstantial change is needed for both
industries to achieve their potentialGislason: “Canada will never be a low-cost
producer of seafood on the world stage … Our potential advantage lies in high quality, high value niche seafood products
Opportunities and needs differ by sector but there are areas of overlap
CommonalitiesOpportunities
Global demand for seafood is growing; Canadian production is not We are a small player in the global seafood market; we need to
identify market niches in which we have advantages The pending free-trade agreement with EU should open up new
opportunities Developing countries are seeing significant growth in their middle
classes, willing and able to pay more for higher quality products Canada as country of origin
Good international image linked to product quality but more associated with maple syrup than seafood, unlike AK, NO – need to generate awareness
International buyers don’t recognize individual provinces Canada brand can provide umbrella effect for company brands
Canada has extensive coastlines, freshwater lakes and rivers that provide opportunities to increase output
Climate change is changing abundance and distribution of species, threatening existing activity but offering new potential
CommonalitiesThreats
Competition is increasing faster than consumption in our traditional markets and we are losing share
Competitors are focused outwardly on opportunities and better coordinate their effort
We are focused inwardly on problems and our industry is highly fragmented, making cooperation difficult – we need to change the conversation
We have challenges entering new markets
CommonalitiesChallenges
Capture fisheries – changing market requirements, excess capacity, dysfunctional value chains, poor financial returns
Aquaculture – inability to expand production, attacks from ENGOs, inadequate regulatory framework
Neither sector well-positioned to take advantage of opportunities
Government looking to industry for leadership, solutions
Little/no progress in addressing issues, due to conflict among factions
Rationale for A Joint InitiativeSackton: geographic brands are more powerful than corporate
brandsCanada brand can provide an umbrella for corporate brands
Many qualities that can be levered More recognized than provinces Enforcement of regulations a distinguishing feature
In marketing, mass is important; more money = more massWhen there is a problem, all seafood products are affected –
capture, aquaculture, imports, exportsCommon issues, often complex – e.g. seal hunt, disease, trawling
Difficult for individual companies to deal with FCC, CAIA resources are limited Now depend heavily on NFI for crisis management Companies now spending a lot of money on these issues in other ways
Need to find ways to work together on issues – progress here may help with others
What would Canadian Levy System look LikeNorway Model Alaska ModelUsing NSC model of levy
against export value:0.5% levy = $20.5 million0.3% levy = $12.3 million0.75% levy = $30.8 million
Canadian Seafood exports in 2012 = $4.1 billion
Using ASMI model of levy against landed value:0.5% levy = $15 million0.3% levy = $9 million0.75% levy = $22.5
millionCanadian Seafood
Landed Value in 2011 = $3 billion
• Additional leverage from federal & provincial sources• Would have to be government legislated & industry driven• Would be ‘revolutionary’ change for Canadian seafood industry
Notional Mandate for Canadian Seafood Council (CSC)
Collaborative Marketing with emphasis on improved coordination leading to increased efficiency, awareness and demand
Market Intelligence to ensure proactive planning, research & analysis
Communication & Image Management of Canadian seafood
Promoting Sustainable Seafood in Canada Facilitating improvements throughout Seafood Value
Chain to improve market performanceQuality, traceability, sustainability, etc.
Question – Despite all of the challenges identified is there still value in creating an organization focused on the above?
Potential for Value CreationImprove market intelligenceDevelop new markets, nichesDifferentiate Canada as seafood supplierCanada brand helps everyoneUmbrella for company marketingCommon issues companies can’t deal withCrisis managementEconomies of scale through joint effortSustained effort over time
Value Proposition for IndustryFocus on marketing and competitivenessGreater marketing “presence” through increased spending,
sustained effortShow better value from joint spending than company spendingLeverage from government supportConsumers must see value – sustainability, quality, traceabilityDifferentiate Canada as source of high-quality seafood
Reputational risk managementCommon issues companies can’t deal withUmbrella for company brands
Different components to reflect industry diversity – species focus or market focus?
Fairness – who benefits, who pays?Menu of services to choose from?
Where Do We Go From Here?