Was Saint Nicholas Naughty or Nice
In Delivering End-of-Year Sales Results?
A From-the-Field Report By John M Saulnier, QFFI Chief Editor & Publisher

Bouille-Abaisse, a rich seafood soup introduced last year by Morubel under the Seafood Delicatess label, has been listed by a number of retail chains in Belgium. Weighing in at 500-grams, which when mixed with 300 grams of water is enough to feed three or four people, the product features a lobster soup base loaded with a seafood medley of prawns, diced Alaska pollock and mussel meat.

As this story was filed, numbers were still being crunched but optimism was in the air. Demand for seafood products is healthy, and the strong euro makes for buying opportunities – but rising production costs tend to offset that advantage. Look for higher consumer prices in 2008.

’Twas a month before Christmas, and from European border to border, seafood sellers were anticipating a stirring of holiday orders. But it would be a while yet before Saint Nicholas (or Sinterklaas, as they say in Flemish) was due to come down the chimney on time, and hopefully exclaim: “Happy Christmas to all, and to all a good end-of-year bottom line!”

“Sales at retail shops have been very slow this month,” Hugo De Groote, managing director of Oostende, Belgium-based Morubel NV, told Quick Frozen Foods International on November 29. “Perhaps people are keeping money in their pockets for spending as the Christmas-New Year holidays get closer. Let’s hope so, because December is generally the most important month for selling frozen seafood products. Many companies work 11 months a year to cover costs before making a profit in the twelfth month.”

Morubel, which specializes in producing value-added frozen shrimp and other seafood products, does business throughout Europe and beyond. However, with much of its turnover generated from sales to Belgian, French and Dutch supermarkets, there was concern about a downturn in consumer confidence in the future, as was reported recently in the newspapers. With price inflation rife among many commodities, and petrol and home heating costs rising, plus the lack of a central government in power in Belgium after many months of political bickering, one could understand why Belgians might be tightening their purse strings.

Nonetheless, the managing director expected to close the books on 2007 with good results. “But it seems like we must work 20% harder every year to reach our goals,” he said.

Further increasing efficiencies is the key to remaining competitive, in the face of increasing exports of finished products to the EU from Asia. All the more reason why this leading European further processor of seafood – which handles throughput of about 40,000 kilograms of raw material per day – has invested over EUR 5 million in improving plant and cold storage capacity.

Hugo De Groote (right), managing director of Morubel NV, and Chris Meskens, marketing manager, display a selection of the wide variety of frozen seafood products packed by the Oostende, Belgium-based company.

Prize-winning Vici brand Sweets del Mare chocolate-flavored surimi from Viciunai received a lot of positive publicity during the Anuga Taste ’07 Innovations competition in Cologne.

Mr. De Groote, noting that Morubel’s product development personnel work together closely with customers to perfect recipes, pointed out that the Bouille-Abaisse Seafood Soup introduced in 2007 has been especially well received in France and Belgium. It is now available in 500-gram retail packs under a number of private labels, as well as through the company’s proprietary Seafood Delicatess brand. Selling for about EUR 4.99, the rich mix of seafood in a lobster soup base features prawns, pollock and mussels.

Further afield, a private label shrimp tapas retail offering in 400-gram packages has gone into distribution in the frozen food sections of grocery stores in Hungary. Morubel also provides that market with a shrimp dish in creamy garlic sauce, and a shrimp and scallops recipe accented with Chardonnay and cheddar cheese sauce.

Elsewhere on Europe’s central and eastern frontiers, the company has penetrated the Russian market and continues to build upon its position in the Czech Republic.

Promoting organic vannamei prawns sourced from Ecuador will remain high on the agenda in 2008, which is why the company will exhibit at the BioFach fair in Nürnberg, Germany, Feb. 21-24.

“The bio business is an evolving niche market for us, one which we believe will continue to grow in the future,” said Ms. Meskens. “At the same time, we are putting a lot of focus on sea-caught shrimp that is sourced from sustainable fisheries in Surinam and Guiana, and processed at our plants in South America.”

On the supply side, it was reported that shrimp availability is abundant and that stocks of other important raw materials are more than sufficient to meet demand. With the steady depreciation of the US dollar (the currency generally used to procure seafood sourced from outside of the EU) vis a vis the euro during 2007, one might assume that this development would have a positive impact on the ledgers of European processors of imported raw material. But buyers of finished products have been quick to ask for downward adjustments in price, based on the euro’s bolstered value.

Price reductions these days are usually not possible, though, because production costs are rising almost across the board. From labor and packaging to insurance, transportation and, of course, energy, the cost of doing business is moving in a one-way direction – up! Consumers can rejoice, however, that the euro’s value has also been heading that way as well.

Some European politicians, who typically speak of the need for a less robust euro to assist builders and exporters of high-value products such as Airbus – which competes head-on against largely dollar-cost aircraft produced by Boeing – are now beginning to point out the benefits that a strong euro has delivered to consumers.

“We don’t say it often enough, the appreciation of the euro doesn’t only bear negative effects. It protects significantly the purchasing power of Europeans in the face of the hike of raw materials prices – of oil in particular – and that reinforces external purchasing power,” wrote Jean-Pierre Jouyet, the French Minister for European Affairs, in an editorial recently published in Le Monde.

Bien, Monsieur Jouyet, but the fact remains that many EU producers of value-added fishery products and other frozen foods that require imported components are hesitant about getting overly euphonic with euro-euphoria.

Surimi Price Going Up, Reports Vichiunai

Faced with a 15% increase in the cost of surimi base, Brugge, Belgium-based Vichiunai Europe NV has no choice except to pass along as much of the increase as possible. In fact, its Kaunas, Lithuania-headquartered parent company already last year raised wholesale prices of finished chilled surimi products by upwards of 10% among customers in Eastern Europe, Russia and Ukraine.

“It will become necessary for us to impose price increases of between 10% and 15% in Western Europe, theoretically averaging at 13% among our customers from the UK to Spain and Italy,” said Dirk Belmans, managing director. “Whether everybody will accept such price increases, of course, is another story.”

The world’s largest surimi maker, Kibun Foods of Japan, has announced plans to increase prices by an average of 10% on February 1, following an increase of 15% by competitor Nissui last November. Both companies cited soaring costs for pollock and other surimi base raw materials, as well as grains and fuel.
“The market today is quite complex, as is the production of our main products, which in addition to surimi base require wheat starch, vegetable oil, egg whites and other ingredients to manufacture – all of which are more expensive now,” said Mr. Belmans. “So our buyers understand why a price increase for finished products is absolutely needed.”

But as Vichiunai is largely a supplier of private label frozen and chilled surimi products in Western Europe, it is locked into long-term contracts with many customers that specify delivery price points agreed to before the raw material and production cost surge began. Furthermore, it is brand manufacturers who usually initiate price increases.

“This is because, traditionally, retailers like to keep a price gap between branded products and private labels,” explained the managing director. “In markets where we are the brand leader, prices have already been raised.”

Vichiunai aims to control production costs better in the future via a more efficient line at its flagship plant in Lithuania, which has been rebuilt following a fire last year. Scheduled to be fully operational in February or March, it will turn out standard products as well as new items which are nowhere to be found on the European market today.

'When pressed for more details, Mr. Belmans told QFFI that all would be revealed to the trade just prior to the April 21-23 European Seafood Exposition in Brussels, where the assortment will be officially unveiled at the company’s stand.

“For now, I can say only that they will be an extension of our already high-quality chilled range – except even higher in quality and convenience,” said the managing director.

View from Marine Harvest

Jo Dekeyzer, managing director of Brugge, Belgium-based Marine Harvest VAP Europe, dines on a number products produced by the company.

At Marine Harvest VAP Europe, value added fish and seafood production was worth EUR 469 million in business during 2006. That amounted to 20% of the Oslo, Norway-headquartered group’s total revenues for the year.

“Our goal is to increase turnover to EUR 500 million in 2007,” Managing Director Jo Dekeyzer told Quick Frozen Foods International during an interview at the VAP business unit’s Brugge, Belgium, production facility in late November. “The third quarter saw an increase per kilo of 20 euro cents, so profits are definitely on target.”

Marine Harvest VAP is part of a group that produces fully one-third of the world’s supply of farmed salmon and trout. Present in 20 countries around the world, the publicly traded company employs 9,000 people, of which 1,850 work for VAP operations in Belgium, Holland, France, Spain and Poland.

While approximately half of the raw material processed by VAP is Atlantic salmon, its wide-ranging product catalog runs the gamut from cod and Alaska pollock to plaice, Dover sole, redfish, pangasius and shrimp. Total volume production in 2006 tipped the scales at 38,351 tons, with sales (including outsourced products) weighing in at 45,697 tons.

Volume of frozen products in 2007 accounted for the lion’s share of output, at 47% (+2%) over the previous year). However, fresh products dominated sales value at 48%, compared to 35% for frozen. Interestingly, frozen’s sales percentage was up by three points over 2006, while fresh was down 7%, and modified atmosphere pack items advanced by four points to 17% of the total.

“The outlook for 2008 is good, as our product development department will continue to focus on being proactive and enhance category leadership opportunities with our customers,” said Mr. Dekeyzer.

The R&D team scored a big victory last year by winning a Prix d’Elite Special Award in the Health & Nutrition category for its Salmon Tartare entry. The product, which is distributed in both frozen and fresh form, features a mixture of marinated Atlantic salmon and chives. Now available under a number of brands and private labels, it has been listed by leading European supermarket chains and freezer centers.

While the retail segment is VAP’s largest sales outlet, taking 64% of output, the unit does a good deal of business in the foodservice sector as well, where 25% of its production was delivered last year. Marine Harvest Sterk in Lemmer, Holland, is one of the important frozen processing plants within the Marine Harvest VAP business unit. Its coated products of different whitefish species are sold to both retail and foodservice clients in Europe.

In addition to the Dutch plant, Marine Harvest Poland and Marine Harvest Pieters, Brugge, produce a wide range of frozen seafood. Elsewhere, Marine Harvest Appéti Marine, in France, is a specialist in frozen seafood traiteur products. Its tartare, carpacio and rolls are distributed among all types of customers in Europe.

The company’s Delight line of natural fillets, introduced last year, has been well received by foodservice operators and caterers. Lightly seasoned with lemon flavor and parsley, the coating represents just 18% of the product’s net weight.

Elsewhere on the foodservice front, Marine Harvest won a great deal of positive publicity last year for its role in supplying salmon sticks to McDonald’s Restaurants in Norway. The quick service chain there utilized the protein component in a healthy-eating Salmon Wrap garnished with lettuce, cucumbers and sauce.

“Our emphasis will continue to be on creating cook-ready fish products with a premium profile that are natural, convenient and savory,” said Dag Cours, director of product development.

As such, look for the company to introduce an array of innovative new products in 2008 that build upon the meal solution recipe dish and components platform offered to foodservice, retail and industrial customers in 2007.

IbroMar/Culimer Rings in 2008 With Super Freezer Celebration The IbroMar/Culimer seafood team extends “Happy New Year” greetings in genuinely “Super Frozen” fashion. While lots of folks around the world were “chilling out” on champagne as the clock struck midnight on January 1 to herald the new year, the IbroMar/Culimer team was more than cool as it wished business associates and friends alike a “Super Frozen 2008!” And it was for more than purely aesthetic reasons that the Holland-headquartered international seafood importing and distribution company’s personnel donned Eskimo parkas in an Arctic setting, complete with Polar bears and penguins, to be photographed for the annual holiday card sent to clients. It was also a way of signaling the advent of its Super Freezer operation. The new state-of-the-art installation, set up within a coldstore at the Port of Rotterdam, maintains sashimi-grade tuna and other high-value fishery products at a constant temperature of -60° C. “We are now offering this essential service to enhance the distribution of super frozen fish menued at sushi bars and other Japanese-style restaurants in Europe, as well as product sold through retail outlets,” said Martin Brugman, managing director of IbroMar/Culimer. “This link is crucial in keeping sea-frozen fish fresher than fresh throughout the distribution chain, until the time it is finally delivered to the restaurant or shop.” The managing director explained that super frozen seafood, which has been the choice of leading chefs in Japan for almost as long as the ultra-deep freezing technology has been available, is characterized by fresh-caught flavor, superb color and natural texture. “The result is a product that is second to none in quality,” said Mr. Brugman. “Tuna frozen this way is really fresher than so-called fresh tuna, which even if delivered to markets by air can be 11 to 14 days old, and deteriorating all the while, before it is ultimately consumed. Super frozen seafood, on the other hand, sustains no deterioration since it is frozen on board vessels immediately after catch and maintained at -60° C.” The booming sushi and sashimi trade in Europe opens up a new market for mini super freezers at wholesale outlets that serve restaurants and retail channels. IbroMar/Culimer plans to supply such units, which are of Japanese-Danish design and typically have freezer capacity of up to two tons. For more information, contact the company by phone (+31 10 4532050) or e-mail (info@ibromar.com).