ASC salmon demand gives edge to vertically integrated players, says Viciunai Europe MD
At Seafood Expo Global, May 2016. Credit: Miriam Okarimia/ Undercurrent News
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October 25, 2016, 9:15 am Tom Seaman
The strong demand for Aquaculture Stewardship Council (ASC) approved salmon gives a big advantage to large, vertically integrated players, the new managing director for Viciunai Europe told Undercurrent News.
Amid a very hot market for farmed salmon (see graph below, from Undercurrent's prices portal), ASC raw material is selling for a premium of between €0.60- 0.70 per kilogram to non-certified salmon, said Rob Schreur, who took over as managing director of Viciunai Group’s Bruges, Belgium-based western Europe sales office last week, from Dirk Belmans.
Marine Harvest and Leroy Seafood Group, the largest and fourth largest salmon farmers in the worldrespectively (based on 2015 production figures), control a big chunk of the ASC raw material and also have value-added processing plants, competing in the market with processors such as Viciunai.
“One thing that is very important [in salmon processing] is who has access to raw material. I saw this five years ago, with the ASC story that Marine Harvest and Leroy have,” Schreur told Undercurrent.
“They were the first to have ASC salmon and they can capitalize on this. They can sell the ASC salmon at a higher price, so the products from others on the market will be more expensive than their own added-value factories,” he said.
Leroy and Marine Harvest did not return a request for comment to Undercurrent on this dynamic.
The amount of ASC salmon is still less than the demand of the market, said Schreur. “There are more and more farmers that are getting ASC. But, I think it will take at least three years until that is stabilized and demand is equal to production.”
Demand is strong for ASC in Benelux and Germany, and getting stronger in the UK.
Source: Undercurrent News prices portal
“The hard discounters are not taking ASC yet, as they are afraid that some suppliers cannot fulfill their needs. That depends totally on the availability,” said Schreur.
“If you look in Dutch retail, one of the current suppliers of Albert Heijn is putting ASC on the product one day, then putting nothing the next day. This is because they are relying on the supply of the raw material,” he said. “I also see that retailers are looking more and more to the suppliers, as they need access to the raw material. You can feel the change.”
Generally, retailers are looking to secure raw material on proteins, said Schreur. “A lot of European companies, say, want to source European chicken, not from Thailand or Brazil.”
It is not just about price, it is securing volumes, he said.
