A. Espersen A/S. We say what we do and do what we say.

Transcription

1 A. Espersen A/S We say what we do and do what we say

2 Topics Market Obstacles Resources Beyond Sustainability Technology 2

3 Introduction to Espersen We are a Danish company with a proud heritage of processing whitefish for more than 80 years Origins using Baltic Cod on the island of Bornholm but now a diversified international company Turnover circa CAD500million One of world s leading buyers of Atlantic species using 50,000 tonnes of H&G each year - about 85% Cod and 15% Haddock 3

4 European Customers Locations Denmark 2 Consumer plants Russia 1 Consumer plant Lithuania 1 fillet plant Poland 1 fillet, 2 Consumer Vietnam 1 fillet plant Total Employees >3,000

5 Market 5

6 EU Market for all fish is growing 000s Tonnes WFE ALL SPECIES ,913 11,959 11,992 12,154 12,493 Index ,4 100,7 102,0 104,9 Source: AIPCE Finfish Study 6

7 000s Tonnes WFE EU Market for Groundfish is growing faster Cod 1,020 1,153 1,237 1,199 1,255 Saithe Hakes Haddock Redfish A. Pollock Hoki TOTALS 2,842 2,962 3,031 2,994 3,104 Index ,2 106,6 105,3 109,2 Source: AIPCE Finfish Study 7

8 Cod The driver of Groundfish consumption in EU for last 5 years Quotas and catches have been high particularly in the Barents Sea so we have had the fish All markets registering growth but the greatest success is coming in the Chilled market where the species flies the flag for whitefish Karl Ragnar Gjertsen 8

9 Cod Salted and dried formats are major users of Cod and are remarkably resilient to supply variations Despite many predictions this market is going away there is innovation in packing formats and convenience that is driving new consumption Around 40% of Norwegian and 20% of Icelandic are directly used plus conversion of H&G locally Portugal is by far the leading seafood consumer in Europe with more than 55kg per capita/year and Salted cod is a very significant reason why Karl Ragnar Gjertsen 9

10 Chilled Chilled formats are making great strides forward in retail across Europe Whilst the mature markets of the West of Europe have struggled to cope with challenging Salmon prices Groundfish species have helped to maintain volumes However it is in the emerging markets where the performance is strongest In Germany the discounters have embraced pre-pack and MAP in the last couple of years expanding rapidly achieving double digit growth last year Eastern European countries are also coming along albeit building from a very low base level but momentum is gathering fast Here Cod and Salmon are being used to complement each other working together in driving seafood consumption up 10

11 Haddock Traditionally very much divided between the UK and NE USA/Canada but Russia now establishing as a player Confidence in the species was badly shaken 4 years ago when supplies were weak and the historical convention of Haddock at a discount to Cod was shattered Lost listings undermined consumption and it is only now that we seeing this rebuilding but with some fragility Not all opportunities available in the species are being fulfilled and fish is left in the water every year 11

12 Unusual circumstances of the UK market After the initial shock of the Brexit referendum in June 2016 the GBP weakened by about 15% against key currencies Products that already had inflation now had much more One year on chilled sales are more or less stable and frozen is growing but the shape of offerings is different either with smaller pack sizes or changed promotional mechanics Consumers are very price-point sensitive.but Cod and Haddock for now are the winning finfish species 12

13 Obstacles 13

14 Chilled Customers and consumers expect year round availability and quality consistency Fresh fresh is well established and now the regular fixture in several markets but supply is not entirely reliable Iceland has been able to build a large part of its industry around meeting this demand but still suffers from seasonal fluctuations..and those seasonal variations are much more extreme in Norway 14

15 tons The challenge of fresh fresh is not so easy Fresh Norwegian Spring Season 60% of the supply but 30% of the time What to do for the other 70% of the year? 20 0

16 Chilled In response the advent and expansion of refresh has now gained a much more credible and sustained following Allows year round supply and consistency in product There are marketing angles that are being used to provide differentiation - Long Line caught has resonated with both retailers and consumers - Sea frozen fillets from both line catchers and trawlers have been able to play in the fringes but have yet to become a default format..but even with both of these the supply is relatively limited 16

17 Quality has to be more consistent Trawl caught is still by far the biggest supply opportunity but despite many new builds in the North Atlantic fleet I contend we are yet to see a real step forward in quality - although there are some interesting innovations Mother Nature is capricious and seasonality is a challenge but simply keeping tight discipline in those matters we can control such as limiting the amount of fish in a single haul or maximum haul time will help There is no problem finding the consumers who will eat fish but keeping them and establishing premium pricing depends on consistency in availability and quality 17

18 The Resource 18

19 Today s NE Atlantic Cod resources seem in good shape Barents Sea quota has been cut but biomass may be increasing again.and Iceland still growing!

20 What about the Poster Children? 20

21 North Sea Cod 21

22 Canada Newfoundland & Labrador 22

23 Wild fisheries today are in recovery mode.. do they have the potential to reach past peaks? 4.5 million 0,7 million 1,3 million? million years ago 20 years ago today future 23

24 Are we in an era of underfishing rather than overfishing? UNFISHED QUOTAS 2016 EU 29,395t (18%) Cod Haddock Saithe Hake Plaice 29,967t (39%) 6,973t (15%) 26,223t (20%) 69,850t (41%) NORWAY Minor 23,939t (18%) Minor na na

25 Beyond Sustainability 25

26 We are being watched by the world 26

27 Beyond Sustainability Groundfish resources globally have generally made great progress in biological status although challenges still exist as we know in this room However, there are other battles to be fought and in the NE Atlantic we face one now: Climate evolution has seen the Arctic Ice sheet retreat to an unparalleled extent exposing new and largely untested regions of the sea Inevitably the NGOs have taken note and sought market attention and action 27

28 Positive engagement is essential Industry and other stakeholders made a Voluntary Agreement to pause expansion and collaborate in gaining deeper understanding of this region Espersen are actively engaged and leading the North Eastern Atlantic Action group...and we are proud that we have been recognised as one of the most responsible and influential actors 28

29 For the full text: The North East Atlantic Agreement

30 Beyond Sustainability more from less Responsible use of natural seafood resources extends well beyond the point of getting them out of the water We need to continue becoming more efficient in the extraction of nutritionally valuable material So for example By-product as low value waste could potentially be eliminated More imaginative uses for even the most under-valued and neglected parts of the fish are being found from protein used in energy drinks to bar snacks 30

31 Is Technology helping us? 31

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33 Disruptive Seafood Harvesting Workshop To find and build support for innovative and selective harvesting concepts that minimise the environmental impact of bottom trawling

34 Will Technology help us? 34

35 Back in 1992 relative simplicity Only decision was: what size block? 13lbs, 16.5lbs, 18.5lbs or 20lbs Out of that there was only ONE winner 16.5lbs 35

36 90 s -Marketing premium cuts and quality First generation Water Jet cutters, Marel portioning 36

37 Today 37

38 00 s 38

39 Summary 39

40 Summary Consumers need to be confident about availability, reliability and consistency then there will always be an appetite for great Cod products We are being watched and need to act responsibly Technology can help but we must use it wisely 40

41 A. Espersen A/S We say what we do and do what we say