Small is beautiful! Market segmentation in aquaculture. Peter Krost UC Westfjords and CRM Kiel

Transcription

1 Small is beautiful! Market segmentation in aquaculture Peter Krost UC Westfjords and CRM Kiel Copyright: Green wave ocean farming wave.org/greenw aveorg Strandbúnaður 2018, Grand Hótel Reykjavík, mars.

2 Being determines the consciousness CRM 1995 ( OceanBasis: 2001 ( Kieler Meeresfarm 2014 ( Environmental Impact Assessments Marine Ecology Studien ICZM Aquaculture (Algae, Blue Mussels) Products from sustainable marine resources Cosmetics ( OceanWell ) 3

3 4

4 European aquaculture industry over time a.eu/data-andmaps/indicators/aquac ulture-production1/aquacultureproductionassessmentpublished-feb 5

5 Without Norway a.eu/data-andmaps/indicators/aquac ulture-production1/aquacultureproductionassessmentpublished-feb 6

6 In Europe, there is some interest to change that Numerous strategies on EU, national and regional level to boost aquaculture 8

7 But why? And who? Numerous strategies on EU, national and regional level to boost aquaculture 9

8 . a huge potential is anticipated 10

9 . a huge potential is anticipated 11

10 The top down view Large markets Large potential Big industry Employment Taxes Development etc... 12

11 Wishful thinking!! Ignores the acting subjects! - the motivation of the aquaculture entrepreneurs! Fuels a number of research and development activities and pilot facilities, of which only few turn into sustainable and persistent operations Large potential for dissappointment lack of public support... 13

12 But: The motivation to run a commercial aquaculture operation is is the expectation of a commercial success (vulgo: profit)!! And this will not be accomplished by producing commodities for low budget markets in high salary countries! => Global protein demand and aquaculture in the western world are largely unconnected!.. but for local markets with high purchasing power. 14

13 Not an easy task in Europe! Constraints.. Saturated classical markets Limited Space Aquaculture Strict and time consuming (environmental) regulations High production costs (wages) 15

14 the coin has another side.. and chances Constraints.. Demand for novel and unique products Saturated classical markets Consumer quality awareness (willingness to pay) Strict and time consuming (environmental) regulations Limited Space Aquaculture High purchasing power High production costs (wages) High prices through technology / product refinery 16

15 Increase profit by scale(?) Classical approach: Economy of scale Costs/item decrease with production volume => Increased profit and lower prices for consumers => Everybody is happy In theory 18

16 Example Norway Source: Retrieved: Average prices for Norwegian salmon Source: retrieved NOK

17 Most markets are not like that! 20

18 Many small enterprises... die/1929/umfrage/unternehmen-nachbeschaeftigtengroessenklassen/ 97,8 % 21

19 employ a lot of people daten/studie/1929/umfrage/unt ernehmen-nachbeschaeftigtengroessenklassen / 41,4 % 22

20 Employment per unit produced drops with higher production Norwegian Salmon Aquaculture MarineAquaculture Production (1000 t) Employment (in 1000) 15 Employees per 10,000 t production Year Employment in marine Aquaculture 2010 Source: ishery/facp/nor/en Retrieved:

21 Also in secundary industry Employees Source: ishery/facp/nor/en Retrieved:

22 Market segmentation Segments Segmentation strategy Comments Zero Undifferentiated strategy Mass marketing: no segmentation One Focus strategy Niche marketing: focus efforts on a small, tightly defined target market Two or more Differentiated strategy Multiple niches: focus efforts on 2 or more, tightly defined targets Thousands One-to-one marketing: customise the offer for each individual customer Hypersegmentation From Wikipedia: Market Segmentation, retrieved

23 Market segmentation in regional aquaculture Segments Segmentation strategy Comments Zero Undifferentiated strategy Mass marketing: no segmentation One Focus strategy Niche marketing: focus efforts on a small, tightly defined target market Two or more Differentiated strategy Multiple niches: focus efforts on 2 or more, tightly defined targets Thousands Hypersegmentation One-to-one marketing: customise the offer for each individual customer From Wikipedia: Market Segmentation, retrieved

24 Product differentiation From Wikipedia: Market Segmentation, retrieved

25 Small vs.big Product diversity Number of companies Employment Skilled workers Infrastructure (costs) Development Environmental impactimpact Risks (diseases etc.) Water quality deterioration Profitability Specialized, segmented Mass production production hi lo hi lo many/unit few/unit produced yes no / few not so required required hi lo lo lo hi lo, balanced hi lo hi lo hi hi 28

26 And the profitability? Profit through added value and higher prices, not through high production volume Defined target markets Promotion and communication Innovations Divided costs by shared ressource use (logistics, advertizing, fairs, exhibitions etc., Networking in professional associations for lobbying, political represbtation, networks Close cooperation with reserach places 29

27 High prices need extensive communication (marketing) Product Quality (Freshness etc.) From here! Local Production, Regional Species Local is the new Bio! Transparent production Direct Marketing Example: Blue Mussel: Wholesaler: / High Refinery / Technology Level Cosmetics and Neutraceuticals from Algae 30

28 From here. Local production. Regional species (The classic: Wine! 100s of grape species, 1000s of different wines Fine de Claire Verte Marenne-Oleron Belon (France) Belon River, Brittany Gillardeau Gauloise Belon River, Brittany Marenne-Oleron Source: All of them: Pacific Oyster!! Et pour chaque lieu de production,p. une saveur Krost: Small is beautiful différente: à vous de les découvrir! 31

29 Direct marketing Blue Mussels Fisch vom Kutter Wholesaler Direct

30 High refiners / technology level 33

31 The BamS initiative BamS = Bio-Economy at marine Sites Idea: cascade utilization of biomass from aquatic sources Enhencement of regional economy Synergy (logistics, distribution, marketing, brand etc.) 34

32 FH FL Kiel Fjord Shrimp Farm Fish Restaurant GMA Development Consulting Demonstration Courses Information Mussel Exhibition Farm Sales Storage Kelp Presentation Cosmetics Farm Processing Fish Restaurant CAU Trout Farm Fish Restaurant Processing, sales Aquatic production Marine science Fish Restaurant GEOMAR FH KI GEOMAR Fish Restaurant FH HL EMB 35

33 Summary Small production will not solve global food (protein) scarcity But: neither will large production (Norwegian salmon for Africa?) Small production has an impact on employment, rather than on turnover Small production can be, but is not necessarily, ecologically better than large production (eg. CO2 footprint) Potential hazards in small production less dramatic (mortality, water stagnation, dead bottoms etc.) Products from small and local segmented production (can) have e better quality (freshness, choice ((you can always go to the supermarket..!)) Increased self-determination of producer and independence from global prices Region benefits from added value, income and employment effects Costs per unit higher in production, logistic and communication Segmented production units require synergy and networking 36

34 Thank you for your attention! Takk fyrir! 37