Fish Prices and Value: a Marketing Challenge

The retail price of many popular fish
species has risen in recent years as
more fishing restrictions and quotas have
increased relative scarcity. Retailers
tend to find that fillets priced above
$30 a kilogram are hard to sell. This price
resistance, particularly for wild fish, will
become a bigger marketing challenge as
the Australian population ages and more
people leave the workforce and enter a
lower income bracket.
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The kilogram price of seafood is considered
to be a barrier to increased sales. Although the
per kilogram price of most seafood can be daunting
for many people, a seafood meal at home does
not have to be expensive. The challenge is to
help consumers recognise the value represented
by seafood.
www.
Introduction
.com.au
Fish Prices and
Value: a Marketing
Challenge
HouseHold InCoMe and exPendIture
Rural residents, particularly in NSW and
Queensland, have lower than average incomes
and presumably have greater difficulty buying fresh
Australian seafood and rely more on price specials
and the everyday lower prices of imported fillets and
prawns than the capital city residents.
Table 1 shows the distribution of disposable
income (after-tax income) in Australia, according
to the latest survey by the Australian Bureau of
Statistics (2007/08). Thirty per cent of households
had less than $500 a week to spend on all the
goods and services they want, while 24% had
more than $1000 a week. Average disposable
household income is $811 a week, but median
income (the midpoint of all households) is only
$692 a week.
Table 1: Disposable income distribution in
Australian households, 2007/08.
Equivalised* disposable
household income per
week ($)
0-299
300-599
600-899
900-1399
1400 - 2000 or more
Figure 1 shows the average household
expenditure on various goods and services
expressed as a percentage of disposable income
(the latest available ABS figures are for 2003/04).
The relative importance of the various items
has not changed substantially, with food and
non-alcoholic beverages remaining a major
component in the family budget.
Percentage of
households
8.6%
32.3
28.3
21.9
9.1
* Equivalised income is the income that a single person
household would need to maintain the same standard of living
as multiple income households.
Low-income households spend a substantially
greater proportion of their income on food and
non-alcoholic beverages (20.5%) than middle
(17.5%) or high-income (15.4%) households.
Source: Household income and income distribution, Australia,
2007-08. Australian Bureau of Statistics, study S65230, 2009.
Figure 1: Average expenditure on goods and services as a percentage
of disposable income, Australian households, 2003/04.
Miscellaneous goods
and services
Housing costs
10.8%
Recreation
sed* dispo
ivali
sab
le
h
o
$900-$1399
21.9%
u
Eq
2.6%
$1400 >
9.1%
$600-$899
28.3%
15.6%
Domestic fuel & power
$
age of househ
old
ent
erc
s
)P
12.8%
16.1%
income per w
old
ee
eh
k(
s
u
$0-$299
8.6%
$300-$599
32.3%
17.1%
Food & non alcoholic
beverages
Transport
3.9%
3.9%
5.1%
Medical care &
health expenses
11.9%
Household furniture, equipment,
services & operations
Source: Australian Bureau of Statistics Yearbook, 2008.
Alcoholic beverages
& tobacco products
Clothing &
footwear
seaFood PrICes
Seafood prices vary around Australia because of
regional and seasonal fluctuations in supply and
demand and the type/location of the retail outlet.
Whole fish typically retails for about $5 or more
a kilogram and fillets are about $10 or more a
kilogram, reaching into the $70 bracket for prime
species in times of scarcity. King prawn prices can
be more than $50 a kilogram in Melbourne even at
times outside the Christmas period.
A survey of six seafood retail outlets in Sydney and
Cairns on Friday 16 October 2009 showed that the
cheapest Australian seafood available was skinned
headless Ocean Jackets for $8.90 a kilogram and
Blue Mussels for $9.99 a kilogram. Red Emperor
fillets were the most expensive seafood, at $48.90
a kilogram. Table 3 shows the prices noted at
an independent fishmonger and a neighbouring
national supermarket outlet in Sydney and Cairns.
The brief summary of typical food prices in 2009
(Table 2) shows that the only fish fillet regularly
available for less than $10 a kilogram was imported
basa fillet. Loose Blue Mussels were the only
shellfish commonly available for less than $10 a
kilogram. Many consumers are now paying more for
the convenience of one-kilogram packs of cleaned,
de-bearded mussels.
Table 2: Typical price range for some selected food products, 2009*.
$20-29.99
$30-39.99
$40-49.99
$50 +
$50-$100
*
Lamb
Medium and
premium mince
Rump steak
Thigh fillet
skinless
Skinless
breast fillet
T-bone
Forequarter
chop
Leg of lamb
(bone in)
Loin cutlet
Eye fillet
Lamb loin fillet
Forequarter
chops (bone in)
Source: Information collated by Ruello & Associates from personal observation and shopping catalogues in Cairns and Sydney,
in the second half of 2009, supplemented with discussion with interstate industry sources.
.com.au
$10-19.99
Seasonal local whole fish or headless Cobbler
Imported Basa fillet
Very Small Australian prawns
Imported small cooked Vannamei prawns
Small Australian prawns
Medium size Vannamei prawns
Seasonal local fillet
Imported Nile Perch skinless
Farmed salmon fillet skin on
Cooked medium Australian prawns farmed
Large green wild banana prawn
White fish fillets Australian (multiple species)
Salmon fillet skinned and boned
Smoked salmon
Large king prawns
Australian wild Barramundi fillet skinless
Yellowfin Tuna skinless boneless
Skinned and boned flathead fillet
Dhufish fillet
Whole Southern Rocklobster
Abalone in shell
Chicken
Drumstick
(Bone in)
Thigh
boneless,
with skin
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$5-10
Beef
Budget mince
special
Budget mince
Sausages
www.
Price range per kg Seafood
Under $5
Comparison with other animal
protein foods
In the survey, seafood prices were mostly far
higher than similarly sized chicken or beef products,
particularly when considering the boneless (edible
meat) price (see ‘The price of edible food’). Skinless
chicken fillet – the premium chicken product – was
selling for $15 or less a kilogram, as was premium
beef mince (Table 2). Premium fish fillets retailed for
well over $30 a kilogram, with the notable exception
of skinless boneless salmon portions selling for
around $30 a kilogram.
Premium species such as Yellowfin Tuna, Coral
Trout and Dhufish would be considered expensive
by most consumers and regarded as out of reach
by low-income consumers. (Dhufish fillet in
Western Australia is probably the nation’s dearest
fish offering, in the $50-70 a kilogram
range throughout 2009.)
At the budget end of the shopping list, fish prices
cannot compete. Boneless chicken thighs are
$4-6 a kilogram, which falls to $3.75 kilogram in
bulk packages. There is no seafood available,
imported or local, that comes close to the price
of chicken thigh, sausages, or beef mince. The
only budget buy is seasonal local whole fish on
special, but consumers must gill, gut and prepare
it because most retailers will not put labour costs
into cheap fish.
Other fish
Canned fish is still very popular in Australia and
found in the pantry of most households. Canned
tuna works out at $15.41 a kilogram in a 185-gram
tin and canned pink salmon (also ready to eat) has
a per kilogram price of $14.14. The canned tuna
category has set new sales records this decade
because it continues to offer innovation,
convenience, quality and value.
Table 3: Fish prices in Sydney and Cairns, 16 October 2009.
Species/item
Basa fillet imported skinned and boned
Barramundi fillet Thailand skinned
Barramundi whole farmed small cleaned
Barramundi fillet skinned, wild
Mussels (1kg pack)
Prawn banana, large green
Prawn king large cooked
Prawn tiger farmed large cooked
Prawn tiger farmed medium cooked
Salmon farmed fillet/ portion
Salmon farmed fillet/
portion skinned and boned
Salmon smoked (sliced fillet skinless)
Shark fillet
Tuna Yellowfin fillet skinned and boned
Trout Rainbow gilled and gutted
Ocean Jacket headless, skinned
Emperor fillet skinless, boneless
Snapper, Red, fillet
Snapper Crimson fillet skinned and boned
Sydney prices $/kg
Supermarket
Independent
12.96
15.99
16.99
19.99
Cairns prices $/kg
Supermarket
Independent
7.50
15.97
9.99
20.99
20.99
29.00
31.95
32.95
26.97
28.99
24.95
32.95
36.99
29.50
10.89
44.99
18.99
8.90
38.90
13.90
21.90
26.90
25.99
32.50
29.66
36.99
19.69
37.90
48.90
34.95
The key difference between Cairns and Sydney is not the price but availability of particular species.
Source: Survey undertaken by Ruello & Associates 16 October 2009, in Sydney and Cairns.
The areas selected in each city had a similar socio-economic status and the survey
was done with the fishmonger and the same major supermarket in the same
shopping centre in both cities.
27.69
26.90
tHInkIng sMarter: sell Value, not PrICe
Seafood cannot match the price-point of
chicken, lamb or beef offerings, but it can offer
great value through species diversity, versatility,
and the eating and entertaining pleasure it gives.
Seafood offers a marvellous world of eating and
selling opportunities.
Retailers can emphasise the ‘hidden value’ of
seafood to consumers at the point of sale, where
most buying decisions are made. Retailers can help
customers consider the cost of a serve per person
and the value in the meal rather than just the cost
of the fish per kilogram.
Fish does not have to be the big star in the centre
of the plate. A salad, stir fry or pasta dish makes a
stunning meal with just 50 grams of seafood flesh
per person at a cost of less than $3 each. The best
sashimi tuna can be sliced at home for around
$3 a serve for much of the year.
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Another option is to sell packaged fresh fillets
(a tray or vacuum pack) at various key price points
such as $5 or $10.
Different consumers value different features in
seafood. Eco-certification (for example, Spring
Bay Mussels) is valued by environmentally aware
consumers. Others place value on particular
regional provenance or locally produced food, so
any such attributes should be brought clearly to
consumers’ attention.
www.
Given that most consumers have little knowledge
or confidence in preparing different seafood items
and perceive prices to be high, retailers can usefully
address these issues. Fillets can be presented in
more affordable portions (a 150-200 gram fillet is
enough for most adults). Information (with pictures)
at point of sale about how to prepare a delicious
seafood meal at an attractive price will draw more
interested consumers than a large display of costly
slabs of flesh topped by a daunting price tag.
Retailers can highlight the particular value in
seafood, such as the nutritional benefits from oily
fish (for example, mackerel), the low fat content of
molluscs, the tender ‘boneless’ flesh of the many
shark species, the sweet flavour of raw cuttlefish,
and the short cooking time of all seafood. Few
Australians eat seafood for nutrition alone, so just
promoting the health benefits will only go so far.
(Consumers can more easily get omega 3 from
bread or fish oil capsules.) Good taste and pleasure
are paramount.
.com.au
Some seafood has long been seen as a treat, with
species such as rocklobster or abalone retailing
for more than $50 a kilogram (in the shell). Yet
consumers can indulge with sliced smoked salmon,
ready to eat, for around $3.50 a person (100 grams)
from big supermarkets or most fishmongers. This
makes it a very affordable treat and arguably better
value than turkey, the best ham and many other
indulgences.
Fishers, farmers, processors and retailers should
work together to add tangible or emotional value
(a feel-good factor) to all their products, across all
price ranges, so consumers are more satisfied with
their seafood purchases and increase their demand.
The more consumer-friendly and pan-ready seafood
becomes, the more appealing it will be even at
a higher price point. This has happened with the
move to skinned and boned flathead fillets and
packaged clean mussels.
An example of successful merchandising in an
independent fishmonger.
The supermarket chains are working hard with
their suppliers, generating lots of information and
media campaigns to help their customers buy more
seafood (and raising their market share versus
independent fishmongers). The 2009 spring issue of
Coles Supermarkets’ free magazine featured ‘30+
New Recipes Under $4 a Serve’, including smoked
salmon and prawn dishes for only $2.85 per serve.
In October 2009, Coles released a series of ‘Feed
your family for under $10’ recipe cards, which
included a couple of recipes for prawn dishes.
Coles also promoted half-price specials on many
foods, including fish fillets, in October.
In early November, Coles ran a price special
on large green Australian banana prawns with
newspaper advertising, television promotion and a
recipe card on the display case above the prawns.
Achieving a good marketing mix is the key to
success, regardless of store size or ownership.
An appealing store with cheerful staff offering
good-looking, tasty, attractively priced seafood
with promotional information highlighting benefits,
features, and recipes will grab consumers’ interest.
Cheap prices and promotion alone are not enough.
The attractive imported fillets are temptingly priced
and not so large that they would scare off buyers
when put on the scales. The labels highlight a
daily special, the absence of bones, and picture
several cooking ideas. Expensive fillets, such as the
neighbouring tuna ($44.99 a kilogram), are cut into
more manageable and affordable portions.
Australia has so much species diversity in seafood
that it overwhelms most consumers. The seafood
industry’s continuing challenge is to highlight the
pleasurable eating opportunities available at various
price points in a creative and persuasive way.
tHe PrICe oF tHe edIble Food .com.au
Here are the approximate typical costs of 100
grams of edible flesh from various common food
items (costed in the second half of 2009):
price
per
100 g
Chicken drumstick
$0.60
Beef mince (budget)
$0.70
Lamb forequarter chop
$1.65
T-bone
$3.60
Basa fillet skinless boneless
$1.10
Tasmanian Atlantic Salmon portion skinless boneless $3.10
Smoked salmon slices Australian
$3.50
Large Australian king prawns
$7.00
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Fish cutlets, beef/lamb chops and chicken
drumsticks all include a substantial portion of bone.
Many fish and most crustaceans are sold whole
with the head and shell/skin, which makes up
around half of the crustacean weight. Meat chops
have a fat selvedge around them that is not usually
eaten. When cut off, this diminishes the volume and
raises the price of the edible flesh.
Edible Food
www.
Fish and other animal foodstuffs are offered in
various convenient forms such as skinless boneless
fillets, which command top prices because of the
labour cost and the relatively low yield of the cut.
For example, only one-third of the flathead weight
is recovered as skinless boneless fillets; the head,
backbone, skin and guts make up the rest, so fillets
commonly retail for more than $40 a kilogram.
PrICe sPeCIals Independent fishmongers have relied on in-store
or shopfront notices and sandwich boards and the
occasional letterbox leaflet to promote a discount
of a couple of dollars per kilogram or 10% off. Most
fishmongers report that their specials engender
customer loyalty, despite the limited geographical
coverage and modest discount.
Coles and Woolworths supermarkets regularly
deliver catalogues into letterboxes around the
country and tie the weekly specials into in-store
publicity, television and other promotion. In the past
year, they have responded to the tough economic
climate and offered huge discounts on selected
seafood and other items.
In January 2009, Woolworths offered large green
(frozen) banana prawns for $13.94 a kilogram,
a discount of $7.05 a kilogram on the regular
price ($20.99). This “loss-leader” had the desired
effect: it greatly boosted sales volume, helped the
supermarket, the distributors and fishers clear the
large stocks of banana prawns from the bumper
2008 season, and delighted consumers.
Sales results on this particular promotion
are unavailable, but previous specials with
price reductions of this size have resulted in
sales volumes increasing three to fourfold
in some stores.
Coles and Woolworths have repeatedly run large
discounts on banana prawns following good
catches in 2009, with great customer response.
They have made Australian prawns available to
people who could otherwise not afford them and
they have pleased regular consumers.
Independent fishmongers may not have the buying
power and promotional reach of the supermarkets,
but they also do not have constraints on regional
initiatives or other novel promotions. They can
quickly respond to local changes in supply or
demand, such as bumper landings of fresh seafood
and falling prices, that can then be passed on to
customers before the nearby supermarket can act.
Copyright Fisheries Research and Development Corporation 2010
This fact sheet was prepared for the Fisheries Research and Development
Corporation by Ruello & Associates Pty Ltd
FOOD
In season
SEASON'S BEST
Ruby
grapefruits
Sweet potato
Brown onions
20
While its skin may
be yellowish, the
ruby grapefruit’s
flesh has a luscious
blush. Its juice is
slightly sour, but
its flavour has
a refreshing zing
and contains lots
of vitamin C. Ruby
grapefruit segments
add an interesting
kick to leafy, green
salads, or use the
juice to make a tasty
sauce for poultry,
pork or seafood.
Originally from
the sunny isles of the
West Indies, kumera,
or sweet potato,
is one versatile
vegie. Laden
with antioxidants,
the sweet potato
has a lower
glycaemic index
than traditional
spuds. It has
a slightly sweet
taste and mashes
smoothly, roasts
perfectly and
steams up a dream!
A rich brown onion
gravy is the perfect
partner to many
a winter meal –
and brown onions
are plentiful right
now. Stored in
a cool dark place,
onions will keep
for a few weeks.
They’re delicious
sliced and fried,
served with meat,
and they form
the flavour base of
many sauces, gravies
and main dishes.
Take your pick
Be inspired by the abundance of fresh produce available at
Coles and serve your family these wonderful winter meals
$5.55
Crispy skin salmon with ruby grapefruit salad
per serve
• SERVES 4 • PREPARATION 10 MINS • COOKING 5 MINS
2
2 cups
½
¼ cup
2 tbsp
1 tsp
1 tbsp
4 x 150g
ruby grapefruit, peeled
parsley leaves
small red onion, finely chopped
baby capers
extra virgin olive oil
brown sugar
olive oil
pieces Atlantic salmon, skin on�
1 Using a sharp knife, cut the segments
from each grapefruit, collecting any juices
in a bowl. Add grapefruit segments, parsley,
onion and capers to bowl. In a separate bowl,
mix together extra virgin olive oil and sugar.
Add to salad and toss to combine.
2 Heat olive oil in a large frying pan on high.
Cook salmon, skin side down, for 2-3 mins,
until crisp.Turn and cook for another 1 min,
or until cooked to your liking.
3 Divide salad between serving plates.Top
with a piece of salmon and a little more salad.
™
Grill
with ed barra
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Recipes: Mandy Sinclair St yling: Jane Collins Photos: David Hahn
Special discount prices have long been used to lure
customers into stores and to boost sales volumes.
The effectiveness of price specials depends on the
size of the discount and the geographical reach and
penetration of the promotional media.
For m
or
e of
Curt
is’
recip
e
hint
s and
tip
s, visit
coles.c
om.a
u