Developing an Australian Seafood Strategy for Export Growth - Stage 1 - Project No. 2004/413 Jayne Gallagher - FRDC
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Developing an Australian Seafood Strategy for Export Growth – Stage 1 Jayne Gallagher Project No. 2004/413
2004/413 Developing and Australian Seafood Strategy for Export Growth – Stage 1 Jayne Gallagher Published by Seafood Services Australia Ltd. October 2005 COPYRIGHT This work is copyright. Except as permitted under the Copyright Act 1968, no part of this publication may be reproduced by any process, electronic or otherwise, without the specific written permission of the copyright owners. Neither may information be stored electronically in any form whatsoever without such permission. DISCLAIMER The authors do not warrant that the information in this report is free from errors or omissions. The authors do not accept any form of liability, be it contractual or otherwise, for the contents of this report or for any consequences arising from its use or any reliance placed upon it. The information, opinions and advice contained in this report may not relate to, or be relevant to, a reader’s particular circumstances. Opinions expressed by the authors are the individual opinions of those persons and are not necessarily those of the publisher or research provider. ISBN: 0-9775587-0-3 By: Jayne Gallagher Seafood Services Australia Level 1 15 Hercules Street Hamilton QLD 4007 Telephone: 1300 130 321 Facsimile: (07) 3633 6776 http://www.seafoodservices.com.au Printed in Brisbane October 2005 SSA Final Report Standard (5 January 2004) Page 2 of 11
TABLE OF CONTENTS 1 NON TECHNICAL SUMMARY ................................................................................................ 4 2 ACKNOWLEDGEMENTS.......................................................................................................... 5 3 BACKGROUND ........................................................................................................................... 5 4 PROJECTED OUTPUTS............................................................................................................. 5 5 OUTCOMES ................................................................................................................................. 6 6 METHODOLOGY ....................................................................................................................... 6 7 RESULTS AND DISCUSSION ................................................................................................... 9 8 BENEFITS AND ADOPTION..................................................................................................... 9 9 FURTHER DEVELOPMENT................................................................................................... 10 10 PLANNED OUTCOMES ........................................................................................................... 10 11 CONCLUSION ........................................................................................................................... 10 12 LIST OF ATTACHMENTS....................................................................................................... 11 12.1 Attachment 1: Project Brief ..............................................................11 12.2 Attachment 2: National Seafood Export Forum ...............................11 12.3 Attachment 3: Australian Seafood Strategy for Export Growth – Literature Review.............................................................................11 12.4 Attachment 4: Australian Seafood on the Global Menu – draft ........11 12.5 Attachment 5: Letter of support from Australian Seafood Industry Council.............................................................................................11 12.6 Attachment 6: Letter of support from National Aquaculture Council Inc....................................................................................................11 SSA Final Report Standard (5 January 2004) Page 3 of 11
1 NON TECHNICAL SUMMARY 2004/413 Developing an Australian Seafood Strategy for Export Growth – Stage 1 PRINCIPAL INVESTIGATOR: Jayne Gallagher ADDRESS: Seafood Services Australia PO Box 2188 1/15 Hercules Street Hamilton QLD 4007 Telephone: 1300 130 321 Fax: 07 3633 6776 OBJECTIVES: To develop a national strategy to achieve significant export growth for Australian seafood by: Establishing agreed national export growth targets Identifying priority opportunities to achieve these export growth targets, including feasibility assessments Identifying impediments to export growth Establishing on going processes to take advantage of opportunities for maximising export growth and to address identified impediments. Achieving these aims required funding in three phases, Scoping, Pilot and Commercialisation. Each phase was to be separately funded with triggers on whether or not to continue the project at strategically important points. This project dealt with Scoping (phase one) and involved a literature search, an industry survey and focus groups. Information and analysis was presented to an industry forum held in Melbourne in February 2004. A number of outputs were produced including a draft strategy “Australia Seafood on The Menu” NFIS Ltd has since further created the Seafood Enterprise Alliance to refine and implement agreed actions. The two remaining phases, Pilot and Commercialisation were to occur subsequent to the findings of phase one. OUTCOMES ACHIEVED The Australian seafood industry and industry stakeholders have committed to forming an Australian Seafood Promotion Body and will use the outputs of this project as inputs to the development of a business and operational basis for further activity KEYWORDS: industry development, export, trade, capacity building, market research SSA Final Report Standard (5 January 2004) Page 4 of 11
2 ACKNOWLEDGEMENTS The funding partners in this project were the NFIS Ltd, WA Fisheries and Seafood Services Australia Ltd. Funding for Seafood Services Australia’s involvement was provided by the Australian Government’s Fisheries Research and Development Corporation through the Seafood Industry Development Fund. 3 BACKGROUND The Australian seafood industry is a significant contributor to the Australian economy, with exports in excess of $2 billion in 2001-02 and a multiplier effect estimated to be around $10 billion. Seafood products from Australia are highly regarded on the international market, with many suppliers having a long history of consistent high quality supply, with some seafood varieties being unique to Australian waters. This presents many potential opportunities for export growth for the Australian seafood sector. It was recognised that there was no strategic process to enable opportunities to be identified and capitalised upon, thereby allowing Australia to realise the benefits of maximising the potential growth. 4 PROJECTED OUTPUTS A number of outputs were expected to occur through this project. These included: An agreed seafood industry vision for increasing export market value. An analysis of key seafood industry export market development opportunities including: o Identification of the top 5 priority export market opportunities for Australian seafood. o A model pilot project to trial a supply chain into a priority market opportunity and a road map to achieve that (Phase 2). o A draft action plan for addressing impediments to maximising export growth. SSA Final Report Standard (5 January 2004) Page 5 of 11
5 OUTCOMES This project formed the basis for the development of a national industry/government partnership to achieve agreed export growth targets for the Australian seafood industry. Long-term benefits of an improved export performance by the seafood industry are expected to include increased economic returns resulting in stronger rural and regional communities. Increasing economic performance without increasing pressure on Australia’s limited and unique fisheries resources, and maximising the opportunities offered by the growth of the Australian aquaculture industry are added benefits of having a national strategy. 6 METHODOLOGY A full time project manager was engaged to undertake research and consult with key industry leaders and associated seafood industry stakeholders to - • Analyse current and potential markets not yet being fully exploited • Identify cultural and institutional barriers to maximising opportunities • Match market opportunities with supply capabilities (capacity to meet customer requirements) • Develop a model for testing an identified market opportunity. This methodology is summarised in Figure 1. SSA Final Report Standard (5 January 2004) Page 6 of 11
Seafood Services Australia National Food Industry Strategy Ltd WA State Government (SSA) (NFIS Ltd) Department of Fisheries Agree Project Brief and Contract Parties State / Federal Government Peak Industry Body Support Investment and Commitment Australian Seafood Industry Council (ASIC) Investment and Commitment Literature Search for Existing Materials on Related Matters Key Industry Leaders Group Survey Focus Group Trade and Market Access Forum National Workshop Prioritise Opportunities Final Report including - Road Map for Stage Two Preliminary Impediment Action Plan FIGURE 1: ASSEG DEVELOPMENT STRATEGY SSA Final Report Standard (5 January 2004) Page 7 of 11 Page 7 of 11
Following the appointment of the project manager the project proceeded in stages as follows:- 6.1.1.1 Stage 1: Project Commencement 6.1.1.2 Key Activities: Project Team meet in Melbourne Completed Project Brief and Summary Agreed Corporate Governance issues NFIS Ltd, WA Department of Fisheries and SSA signing off on project brief. Stage 2: Initial Research 6.1.1.3 Key Activities: Analysis of existing trade and market access research relating to the Australian seafood and other relevant industries. Including - o Benchmarking market performance against competitors o Identifying strengths and weaknesses of seafood industry performance o Summarising existing literature to synthesise information, including strategic recommendations and the highlighting of commonly identified criteria for success. Contacted the ASIC Trade and Market Access Committee. Followed by distribution of project summary, and a personal approach by project team to stimulate participation in the project. Commence identification of key industry leaders and focus group members. Telephone contact with identified industry leaders seeking opinions on issues arising from literature search. Project manager will seek nominations for focus group participation. Focus group identified. Key industry leaders group formed the hub of network for information, communication and support Stage 3 – Focus Group and Surveys Key Activities: Communications consultant engaged to develop survey methodology and instruments (including written and personal interview techniques). Market intentions survey undertaken and analysed to gain insights into – o potential growth areas in a five and ten year timeframe, o where growth is expected to occur i.e. Sector/Product/Species/Form; o Impediments to maximising export growth. o perceptions of Australian seafood industry performance o customer targets i.e. retail, hospitality, catering etc o predictions of “the next big thing” in Australian seafood Synergies from survey and literature search findings identified. SSA Final Report Standard (5 January 2004) Page 8 of 11
Stage 4 – National Trade and Market Access Forum Key Activities: Conducted National Trade and Market Access Forum for the seafood industry in Melbourne National export growth targets explored Export growth opportunities identified through the project prioritised Actions and responsibilities for removing impediments to maximising export growth identified. 7 Results and Discussion A large number of seafood industry members and seafood industry stakeholders participated in meetings, discussions and surveys. The results of these activities are summarised in the following attachments: • National Seafood Export Forum outcomes (Attachment 2) • Literature Review – Australian Seafood Strategy for Export Growth (Attachment 3) • Australian Seafood on the Global Menu – draft action plan (Attachment 4) The discussions and meetings were robust with many differing views expressed. The diversity of business objectives, due to sectoral, regional and financial differences made it impossible to agree on overall export targets. It was possible however to agree on a process for examining the potential for an Australian Seafood Brand. It was also agreed that this process would be an inclusive one and involve a range of businesses so that the diversity of views could be considered and accounted for in any nationally collaborative seafood promotional effort. A need to consider the global market for Australian seafood as a whole rather than as separate domestic and export markets was unanimously agreed upon. This is reflected in the draft action plan “Australian Seafood on the Global Menu”. 8 Benefits and Adoption The diversity of people and businesses involved in this project is its strength. Benefits accrued to individuals through the networking opportunities afforded through meeting people from other areas in Australia facing similar challenges in marketing their product. At a seafood industry collective level the benefits of reaching a common understanding of the issues affecting the market performance of Australian seafood will provide an excellent basis for developing collaborative solutions on either sectoral, regional or national scales. SSA Final Report Standard (5 January 2004) Page 9 of 11
9 Further Development At the time this project was undertaken there were a number of concurrent initiatives with similar objectives. In particular the National Aquaculture Action Plan Seafood Branding initiative and the findings that are being brought forward through that process need to be incorporated into any further work on developing an Australian Seafood Strategy for Growth. The National Seafood Export Forum recommended that a small group be formed to further develop an Australian Seafood Promotion Strategy. The groups, to be known as the SEA, was to be formed in collaboration with ASIC, FRDC and the NAC and was to be independently chaired. It was tasked with further developing the Strategy by investigating current sectoral, regional and national initiatives and recommending the way forward to Seafood Directions 2005. 10 Planned Outcomes It was expected that this project would provide a basis for the development of a national industry/government partnership to achieve agreed export growth targets for the Australian seafood industry Longer term it is expected that the benefits of an improved export performance by the seafood industry will provide increased economic returns resulting in stronger rural and regional communities. Increasing economic performance without increasing pressure on Australia’s limited and unique fishery resources, and maximising the opportunities offered by the growth of the Australian aquaculture industry are potentially added benefits of developing an agreed national strategy. While some of these expected outcomes have not yet been achieved the basic ground work has been laid for achieving them in the future. Phases 2 and 3 need to be undertaken to further demonstrate the benefits of collaborative seafood promotion activities and thereby enhance the chances of the planned outcomes being realised. 11 Conclusion The basic ground work has been done to enable the Australian Seafood industry to work collaboratively towards meeting the challenges of the globalisation of seafood markets. Further success will depend on the ability of industry leaders to build the capacity within the industry, and to facilitate a collaborative process that takes advantage of Australia’s clean green credentials and thereby improve the overall returns for Australian seafood in the global market. SSA Final Report Standard (5 January 2004) Page 10 of 11
12 LIST OF ATTACHMENTS 12.1 Attachment 1: Project Brief 12.2 Attachment 2: National Seafood Export Forum 12.3 Attachment 3: Australian Seafood Strategy for Export Growth – Literature Review 12.4 Attachment 4: Australian Seafood on the Global Menu – draft 12.5 Attachment 5: Letter of support from Australian Seafood Industry Council. 12.6 Attachment 6: Letter of support from National Aquaculture Council Inc. SSA Final Report Standard (5 January 2004) Page 11 of 11
Attachment 12.1
PROJECT BRIEF AUSTRALIAN SEAFOOD – STRATEGY FOR EXPORT GROWTH PHASE 1 – OPPORTUNITIES AND IMPEDIMENTS AIM To develop a national strategy to achieve significant export growth for Australian seafood by: Establishing agreed national export growth targets Identifying priority opportunities to achieve these export growth targets, including feasibility assessments Identifying impediments to export growth Establishing on going processes to take advantage of opportunities for maximising export growth and to address identified impediments. In order to achieve these aims it is logical to divide this project into three distinct phases, Scoping, Pilot and Commercialisation. Each phase will have separate funding applications and approvals required with triggers on whether or not to continue the project at strategically important points. Phase 1. – Identify priority market opportunities for Australian seafood in export markets. Phase 2. – Identify supply chain partners and analyse a pilot project for supply into the preferred market. Phase 3. - Develop options for the commercialisation of the piloted supply chain into the preferred market. This document deals with the Scoping (phase one) of the project in a level of detail. The two remaining phases, Pilot and Commercialisation will require further detail subsequent to the findings of phase one.
BACKGROUND The Australian seafood industry is a significant contributor to the Australian economy, with exports in excess of $2 billion in 2001-02 and a multiplier effect estimated to be around $10 billion. Seafood products from Australia are highly regarded on the international market, with many suppliers having a long history of consistent high quality supply, with some seafood varieties being unique to Australian waters. This presents many potential opportunities for export growth for the Australian seafood sector. At this point there is no strategic process to enable opportunities to be identified and capitalised upon, thereby allowing Australia to realise the benefits of maximising the potential growth. This project will establish a process that provides a sound basis for targeting investment and achieving sustainable export growth. INVESTORS Investors in Phase 1 are the National Food Industry Strategy Ltd, WA Department of Fisheries, Seafood Services Australia Ltd and the Australian Seafood Industry Council. PROJECTED OUTPUTS A number of outputs are expected to occur by undertaking this project. These include but are not limited to: An agreed seafood industry vision for increasing export market value. An analysis of key seafood industry export market development opportunities including: o Identification of the top 5 priority export market opportunities for Australian seafood. o A model pilot project to trial a supply chain into a priority market opportunity and a road map to achieve that (Phase 2). o A draft action plan for addressing impediments to maximising export growth. OUTCOMES This project will form the basis for the development of a national industry/government partnership to achieve agreed export growth targets for the Australian seafood industry. Long-term benefits of an improved export performance by the seafood industry will include increased economic returns resulting in stronger rural and regional communities. Increasing economic performance without increasing pressure on Australia’s limited and unique fisheries resources, and maximising the opportunities offered by the growth of the Australian aquaculture industry are added benefits of this national strategy. APPROACH A full time project manager will be engaged for 6 months to undertake research and consult with key industry leaders and associated seafood industry stakeholders to - • Analyse current and potential markets not yet being fully exploited • Identify cultural and institutional barriers to maximising opportunities • Match market opportunities with supply capabilities (capacity to meet customer requirements) • Develop a model for testing an identified market opportunity.
Seafood Services Australia National Food Industry Strategy Ltd WA State Government (SSA) (NFIS Ltd) Department of Fisheries Agree Project Brief and Contract Parties State / Federal Government Peak Industry Body Support Investment and Commitment Australian Seafood Industry Council (ASIC) Investment and Commitment Literature Search for Existing Materials on Related Matters Key Industry Leaders Group Survey Focus Group Trade and Market Access Forum National Workshop Prioritise Opportunities Final Report including - Road Map for Stage Two Preliminary Impediment Action Plan
METHODOLOGY Milestones The following milestones shall apply unless otherwise negotiated between NFIS Ltd and the Department of Fisheries. Milestone 1 – Project commencement Date due September 29, 2003 Key Activities Project Team meet in Melbourne Complete Project Brief Complete Project Summary Agree Corporate Governance issues Contract signed NFIS Ltd, WA Department of Fisheries and SSA to sign off on project brief. Milestone 2: Initial research Date due: 29 November 2003 Key Activities Undertake analysis of existing trade and market access research relating to the Australian seafood and other relevant industries. Including - o Benchmarking market performance against competitors o Identifying strengths and weaknesses of seafood industry performance o Summarising existing literature to synthesise information, including strategic recommendations and the highlighting of commonly identified criteria for success. Initial contact with the ASIC Trade and Market Access Committee. Followed by distribution of project summary, and a personal approach by project team to stimulate participation in the project. Commence identification of key industry leaders and focus group members. Telephone contact with identified industry leaders seeking opinions on issues arising from literature search. Project manager will seek nominations for focus group participation. Focus group identified. Key industry leaders group to form the hub of network for information, communication and support Milestone 3 – Focus Group and Surveys Date due: 20 January 2004 Key Activities Communications professional to be engaged to develop survey methodology and instruments (including written and personal interview techniques). Based on market intentions undertake and analyse survey to gain insights into – o potential growth areas in a five and ten year timeframe, o where growth is expected to occur i.e. Sector/Product/Species/Form ; o impediments to maximising export growth. o perceptions of Australian seafood industry performance o customer targets i.e. retail, hospitality, catering etc o predictions of “the next big thing” in Australian seafood Identification of synergies from survey and literature search findings
Milestone 4 – National Trade and Market Access Forum Date Due: 19 March 2004 Key Activities Conduct National Trade and Market Access Forum for the seafood industry in Melbourne Establish agreed national export growth targets Prioritise export growth opportunities identified through the project Identify actions and responsibilities for removing impediments to maximising export growth Milestone 5 – Final Report Date Due: 26 March 2004 Key Activities Assess and report on the feasibility of the top five opportunities Develop draft road map that specifies the parameters to determine priority markets/product matches for Australian seafood pilot project. Draft action plan to address impediments and take advantage of the opportunities for maximising export growth Milestone / Funding Summary Schedule Milestone Activity Funding Other Funding Required Milestone 1 Contract signed by 12 September Cash WA DoF, NFIS, SSA Due: 29 2003, Project Management Team contributions (in kind) September established $20,000 from 2003 NFIS, $5 000 SSA Project Manager commenced WA DoF (in kind) Milestone 2 Literature search, Initial peak industry Cash contribution ASIC, NFIS, SSA (in Due: 28 and government contacts, Key $20,000 from kind) November industry leaders interviewed. Focus NFIS 2003 group identified, Milestone 3 Trial surveys completed, survey Cash Due: 30 instruments refined. Initial analysis of contributions January survey completed. $20,000 from 2004 NFIS, $5 000 SSA Milestone 4 Complete focus group surveys and Cash contributions Due: 19 analyse results, Analysis against $8,000 each from WA, March 2004 literature search, refine road map for Qld, SA, Tas, Vic and Stage 2 in consultation with key NSW Governments industry leaders group Conduct National Trade and Market Access Forum to draft action plan to address impediments to growth Milestone 5 Complete Final Report including draft Cash Due: 26 Australian Seafood Export Growth contributions March 2004 Strategy including a road map to take $5000 from NFIS advantage of opportunities and a draft action plan to address impediments to growth.
Attachment 12.2
National Seafood Export Forum Melbourne February 24, 2004 Outcome Notes Executive Summary The National Seafood Export Forum was convened to report back to the seafood industry and associated stakeholders the findings of the industry and government consultations and research for the Australian Seafood – Strategy for Export Growth (ASSEG) project and to workshop these findings. Outcomes of this forum include- Australian seafood industry leaders agreed to - i Develop and implement a coordinated 5-year plan with the goal of doubling the value of exports, with the aim of increasing enterprise profitability. ii Adopt a “Seafood - Brand Australia” approach to the marketing and promotion of Australian seafood within an “Australian Food Brand” position. iii Seek support from the National Food Industry Strategy Ltd and other organisations to: a) undertake research in Australia and selected overseas markets to better understand the needs of consumers and new markets and assess Australia’s capacity to meet those needs. b) undertake coordinated in-market pilot projects to demonstrate returns on investment to individual companies, through such activities. c) assist seafood exporters gain practical marketing and export experience and knowledge through the establishment of a mentoring program. d) facilitate the development of a specialist seafood export marketing entity, which has broad support from industry. e) further develop the capacity of industry to engage with government on trade negotiations, technical barriers to trade and related matters. iv Assess the benefits for and develop the basis for expanding the existing industry trade show initiatives under the generic “Seafood - Brand Australia” banner within an “Australian Food Brand” position.
Background The ASSEG project is a joint initiative of the National Food Industry Strategy Ltd, The Department of Fisheries WA and Seafood Services Australia (Attachment 1 – ASSEG Project Summary). The aim of the ASSEG project is - To develop a national strategy to achieve significant export growth for Australian seafood by: Establishing agreed national export growth targets Identifying priority opportunities to achieve these export growth targets, including feasibility assessments and a demonstration pilot project Identifying impediments to export growth Establishing ongoing processes to take advantage of opportunities for maximising export growth and to address identified impediments. A more detailed background is available in the National Seafood Export Forum Background Papers (Attachment 2). These papers outline the extensive and collaborative process that has been undertaken to identify issues and opportunities with in excess of 250 stakeholders involved in face-to-face consultations. Purpose A key activity in ASSEG phase one is the National Seafood Export Forum to set priorities for the development of – • an in-market demonstration project • ongoing processes to address impediments and capture opportunities. The forum is a report back to stakeholders of ASSEG research to date, including an extensive consultation and literature review process. Participants will workshop this research to give stakeholder direction in achieving the aims as outlined above. The Forum has brought 80 key stakeholders to the table to deliver the following outcomes.
Structure The Forum consisted of seven tables of ten people with a plenary session after the Setting the Scene and Target Setting (Attachment 3 and 4) presentations. The workshop sessions following The Story So Far (Attachment 5) and Getting to Market were facilitated by contributing table members, reporting back to the plenary session. Throughout the process participants from the floor were asked to paraphrase key messages from sessions. Process Opening : Michael Williams – Facilitator A self-introduction by all forum participants Welcome: Richard Brooks, Managing Director of the National Food Industry Strategy Ltd welcomed forum participants. In doing so Richard highlighted the following points, The seafood industry - • Has high potential to expand and grow • Lacks an effective support structure with a market focus • Is currently fragmented • Looks unlikely to reach full potential without a shared view • Is enduring a tough time, with profits taking a hammering in the last year • Must invest in marketing and merchandising to keep pace with other industries and sectors • Must lead the way and to be in charge of its own destiny. • Has been engaged by NFIS to clarify areas of opportunity and assist in turning them into reality, and • Stressed that NFIS Ltd would be looking for consensus toward opportunities during forum proceedings. The Australian Seafood Industry 2004: Russ Neal, CEO Australian Seafood Industry Council. Russ set the scene for the forum making the following key observations – • Gross Value of Production down from $2.41 b to $2.3 b last year • Australian seafood industry has averaged 10% growth per year • Volumes have continued to increase for exports, however the value has decreased. • Industry has tremendous potential for future growth • Negotiations continue on trade barriers and tariffs, an example of a target being Europe that has tremendous potential markets, with another ten countries to join current 15 in the EU • The US Free Trade Agreement has resulted in 48 tariffs on seafood being removed. • The seafood industry is the only primary industry without a marketing arm
Comments from the floor included: • Industry is in crisis, NFIS offers a great opportunity • No marketing and promotion of Australian seafood within Australia • Today can be a starting point • Australian seafood is looking for value • One industry but made up of many parts, needs a major restructure to create collective volume • Industry should be looking to the future – not the past • The whole supply chain need to be focussing on growth • Need some lateral thinking – How do we increase Australian exports? • Australia has the best seafood in the world and there is a need to promote that as one. • Need to develop a strategy Target Setting The scene for target setting was to be set by FRDC Executive Director, Peter Dundas- Smith. Unfortunately Peter was ill on the morning of the forum and unable to attend. Peter contributed an overhead of his “Input / Output” model on where growth was likely to come from for the Australian seafood industry. Don Nicholls presented on behalf of Peter Dundas – Smith, including the following salient points - • Export growth can be achieved by two means – sell more fish or get greater value for the existing production. • There may be an opportunity for increasing volumes in aquaculture, however wildcatch in general does not have this ability. Sell more fish scenario: Catch more fish by – o Discovering more fisheries o Increasing TAC’s o Marketing under-utilised species Grow more fish by – o Increasing current species production o Developing new aquaculture species The majority of these were considered to have a low feasibility, with increased aquaculture production rating a moderate feasibility for achieving growth. Increase value for existing production scenario: o Increase marketing / promotion into existing markets o Find new markets o Value add through – Quality New products Effective supply chains These were considered to have moderate to high feasibilities.
Conclusion - Increasing the value of the product is considered to be the better option. ASSEG consultation revealed industry market intentions varying from 50% growth per annum, through to enterprises that were contracting export activities. A scenario planning model for growth was outlined by Don Nicholls with a number of factors affecting growth being considered in the differing scenarios – Factors outlined included - war, terrorism, health / disease outbreak, natural disasters, exchange rates, airfreight etc. These factors were considered in setting four separate scenarios 18%, 16%, 6% and 2% growth targets (Attachment 3). These scenarios were based on literature revealed in the ASSEG project research. The target initially suggested was for 6% growth – meaning that the seafood industry would double in 11 years. Participants indicated that this scenario was too conservative and while the growth rate was not considered important, the proposition that industry should double exports was accepted. Points made from the floor included – • A need for cohesion and orderly targeted marketing • Value creation can be achieved by targeted and coordinated marketing • A need to build an export market through understanding the needs of the market and meeting those market expectations • There is a need to understand where you are going to position yourself – whether that is low end or high end. The Story So Far… Don Nicholls presented the ASSEG project process and stressed the importance of the input of the almost three hundred people who took part in the consultation process and the high quality of the information provided. The importance and quality of the literature review that comprised in excess of one hundred relevant publications and papers was also emphasised. This information was summarised into discussion points to be workshopped. Discussion points of 9 potential opportunities were given with a request for additional opportunities to be added. Through this process a number of priority criteria were identified. The overwhelming theme from participants was that a coordinated approach was needed in creating value. The preferred markets for feasibility assessment were the key existing markets and the US and European markets. With a point made that existing markets should be consolidated as well as new markets developed. The market characteristics that were identified as priorities to be capitalised upon included – • Coordinated generic promotion • Seafood – Brand Australia – underpinned by standards • Promote quality
• Promote sustainability • Target top end sectors - fine dining, hotels, high-end retail • Promote Clean / Green • Promote food safety • Adding value • Convenience • Closer to end users / improved supply chain practices • Alliances where possible • Consider barriers to entry Getting to Market Given that the forum had identified a need for a coordinated effort to get to market, a question was posed, “What does the strategic framework need to deliver to achieve industry commitment and investment?” and “What would it look like?” The participant response to the initial question had strong synergies identifying priorities that should be addressed. These priorities were – • develop a specialist seafood export marketing entity, which has broad support from industry. • develop a five-year plan • coordinate generic promotion under a “Seafood - Brand Australia” approach to the marketing and promotion of Australian seafood within an “Australian Food Brand” position • undertake market research in Australia and selected overseas markets that assists industry to meet the needs of consumers and new markets. • improve practical marketing and export performance in the industry, with an emphasis on mentoring new and emerging exporters. • demonstrate return on investment through in-market pilot projects. (eg the NFIS Ltd Dubai project, which is bringing commercial parties together to develop new export opportunities. • liaise with government on trade negotiations, technical barriers to trade and related matters. • develop the existing industry trade show initiatives under the generic “Seafood - Brand Australia”. • there should be a focus on improvement of performance in existing markets as well as developing new markets. • activities that cater for sectors with different stages of maturity and differing needs. • activities should not try to duplicate the activities undertaken by enterprises such as a sales function. A point to note was that there are areas of commonality between domestic and export markets. The ASSEG project however has been specifically targeting export issues. Common responses to the “What would it look like?” question were - • National
• Sustainable • Industry based • Expertise based • Market driven • Through chain • Not a bureaucracy There were mixed reports on whether there should be a new body created and also on how a “board”, “committee” or other guiding structure may look, with varying opinions on states or sector representation. There was agreement on the fact that it should be the people who are in the business of exporting that set the direction. Several structural models were also proposed during the course of the day, including existing models based on the “Food Adelaide” model, Meat and Livestock Australia, and new structures including the “Australian Seafood Export Promotion Council” ” and discussion on whether it should be inside or outside the Australian Seafood Industry Council. Comments from the floor included – • Industry has achieved results without coordination, efficient supply chains and other issues. What could be achieved if these factors were well catered for? • If industry does this right we are sure to succeed in regaining market share. • This initiative will engender a fresh new vigour in industry and industry should work towards this vision. • Industry is self-help and is undertaking a proactive activity through this process. Close Minister for Agriculture, Fisheries and Forestry, The Honourable Warren Truss closed the forum with key points from his speech including - • A plan is no good unless it drives change in the industry • There is a need to act to preserve Australia’s position • Australia’s share of value added market has declined • A recognition of the key role that the seafood industry has played, with a potential to achieve a lot more • The need for a strategy to insulate exporters against global events • US Free Trade Agreement, US is Australia’s third most important seafood market • Industry will reap the benefits of eliminating 48 tariffs • Second guide to exports to be released by DAFF – EU followed by China • Industry must not put all their eggs in one market • Testing procedures – EU many markets becoming more prescriptive and may make access more difficult • Philippines and EU are challenging Australia’s quarantine system Close – Richard Brooks
In summing up and giving a where to from here Richard touched on the following points- • Need for self-help, with industry taking the initiative • Industry has achieved substantial success but has not achieved its full potential • This group has recognised a need for a shared 5-year plan • NFIS a catalyst to facilitate this strategy • There has been some concern expressed that industry has too many bodies. Does this need a new body? • How will this body be structured? • There seems to be a desire for standard to underpin the “Australian Seafood Brand” – If under “Brand Australia”, there is a need for commitment to support that brand from other sectors • A need for a market focussed / consumer view • There seems to be interest in trade fairs as a vehicle for promotion • You can be assured that NFIS Ltd will take action and will feed back to this group. Summary Australian seafood industry leaders agreed to a course of action that can be summarised under the following headings - Australian Seafood Promotion • facilitate the development of a specialist seafood export marketing entity, which has broad support from industry. • adopt a “Seafood - Brand Australia” approach to the marketing and promotion of Australian seafood within an “Australian Food Brand” position. World Market Development • undertake coordinated in-market pilot projects to demonstrate returns on investment such as the NFIS Ltd, Dubai project. • assess the benefits for and develop the basis for expanding the existing industry trade show initiatives under the generic “Seafood - Brand Australia” banner within an “Australian Food Brand” position. Capability and Capacity • undertake research in Australia and selected overseas markets to better understand the needs of consumers and new markets and assess Australia’s capacity to meet those needs. • assist seafood exporters gain practical marketing and export experience and knowledge through the establishment of a mentoring program. Supportive Business Environment • implement a coordinated 5-year plan with the goal of doubling the value of exports, and the aim of increasing enterprise profitability • further develop the capacity of industry to engage with government on trade negotiations, technical barriers to trade and related matters.
It was resolved that industry would seek funding support from the National Food Industry Strategy Ltd and other organisations to undertake activities that would facilitate these outcomes in the most effective manner.
Attachment 12.3
National Food Industry Strategy Ltd in conjunction with Seafood Services Australia and the Western Australian Department of Fisheries. Australian SEAFOOD SERVICES AUSTRALIA Seafood Strategy for Export Growth Literature Review February 2004 Prepared by MarkeTrade
national food industry strategy ltd a u s t r a l i a n s e a f o o d s t r a t e g y f o r e x p o r t g ro w t h page i Executive Summary A fundamental aim of the Australian Seafood Strategy for Export Growth Project is to develop a national, industry-driven strategy to achieve significant export growth for the seafood sector, which includes wild caught and farmed product. Phase One of the Project included a literature review of export markets, opportunities, impediments and priorities. This summary presents key findings from the literature review. Key findings on Australia’s fisheries production and exports include: • In 2002 Australia’s total (edible) fishery production was an estimated 233,350 tonnes, valued at $2.23 billion, with exports of 64,291 tonnes of edible fisheries products valued at $1.66 billion. • Australia’s wild caught production is expected to plateau at around 65,000~70,000mt or $1.8~2.0 billion (or at best grow 5% annually through improved fishery yields and value adding). • Australia’s aquaculture production is expected to grow at around 16% annually from 44,000mt or $557 million in 2001-02 (from increased production and improvements to productivity). • Anticipated growth in Australia’s aquaculture production is well placed to capture increases in domestic consumption, export markets and the replacement of Australia’s rising seafood imports. • Australia’s main exports are rock lobster, tuna, prawns and abalone, predominantly to the Asian markets of Japan, Hong Kong, China, Taiwan, Thailand and Singapore. • During 1997-98 to 2001-02, the highest annual growth in Australia’s exports has been sales to Greece, France, Malaysia, Spain, Italy (from a low base) as well as Thailand and Hong Kong. Key findings on future world production and trade in seafood include: • World trade is expected to increase significantly in live/chilled/fresh finfish, frozen whole fish and fillets, mostly to developed markets in USA, EU and Asia (Taiwan, Japan, Hong Kong, Singapore). • Real prices for low-value finfish are expected to increase by around 6% during 2000-2020, and 15% for crustaceans and high value finfish. Real prices could rise by up to 69% by 2020 if capture fishery stocks become threatened. • Trade in seafood is becoming increasingly consolidated through large-scale, global ventures and producers, stimulating market competitiveness and resource development. • World demand/supply of value-added seafood is increasing, with a larger variety of products, higher utilisation of fish, and advances in refrigeration, processing and packaging. • Increased supply/trade in aquaculture products is stimulating competition with wild-caught fisheries, raising consumer/market standards for supply consistency, uniformity & quality handling. • Forecasted increase in net imports of fishery products among developing and developed countries. • Forecasted higher levels of competition among low-value fish/fishery products. • Forecasted increase in demand and prices for high-value fish/fishery products. Key findings on global seafood consumption and demand include: • World demand for fish and fishery products is expected to grow at around 2.1% annually. • Fish consumption is expected to be highest in Japan/East Asia, followed by the Nordic countries and North America. Asia-Pacific is expected to account for two-thirds of fish consumption. • In developed countries, consumption and demand is expected to be driven by imports of high cost/high value species. • In developing countries, consumption and demand is expected to be driven by imports of low cost/low value species. • Developed countries will continue to be large net importers of fish with a growing emphasis on sustainability, environmental regulations, pollution, food safety and eco-labelling. • Home meal replacements (ready-to-eat meals) will be among the fastest growing products. • The main factors driving growth in fish consumption include the availability of fish (i.e. domestic industry capacity); economic development; population growth; ready-to-cook/ready-to-eat meals; growth of supermarkets and non-traditional outlets (e.g. health food/organic stores; convenient stores, hypermarkets); increased health consciousness; increased eating outside the home; improvements in packaging/transport/availability of seafood.
national food industry strategy ltd a u s t r a l i a n s e a f o o d s t r a t e g y f o r e x p o r t g ro w t h page ii Key findings on seafood export opportunities include: • Added value increasingly means added benefit (not cost) to the consumer by way of convenience, extra ingredients, longer shelf-life, environmentally friendly packaging, reduced cooking/preparation time, or new packaging formats. • Packaged fillets/portions and processed seafood products into supermarkets and convenience stores in the EU, USA and Japan (i.e. ready-to-cook/ready-to-eat meals; frozen portion-size/long- life fillets). • Live/fresh/chilled seafood into speciality health/natural/organic and seafood stores in USA, EU, Japan. • Live/fresh fish, whole frozen fish and fresh fillets to the wet markets of Hong Kong, Singapore, Malaysia and Taiwan. • Frozen crab, whole frozen fish, fillets and lobster into the Hotel, Restaurant, Institution sector of Malaysia, Thailand and UAE. • Frozen crab and fillets, and whole frozen fish and lobster into supermarkets of Germany, Belgium and Nordic countries. • Live and fresh fish, and frozen fillets/portions/whole fish supplied to the HRI sector in China, Hong Kong and Japan. • Processed-prepared lobster meals and tails/portions packed ready-to-cook supplied to supermarkets in Sweden, Spain, Portugal and Belgium. Key findings on impediments and barriers to export growth include: • Many species, small scale, inconsistent supply volumes of Australia’s fish and fishery products. • Lack of price competitiveness in low-value fish/fishery products for further processing. • Uncertainty of airfreight capacity, costs, availability, routes and schedules. • Food safety measures and the requirement for HACCP. • Countervailing duties, anti-dumping legislation and competitor access to markets. • Property Rights over market names. • Sanitary and phyto-sanitary measures, regulations on safety/production/process standards. • Increased risk assessment, more stringent and varied customs clearance procedures. • Public concern for over-exploitation of natural resources, and verification of producer claims. • Environmental concerns over aquaculture. • Labelling for traceability, and for organic/environmental sustainability/eco-friendly. Key findings on potential weaknesses of the Seafood Industry’s export development: • Lack of dedicated programs including Government investment and R&D incentives; assistance to build alliances; maintaining high quality, assured product; securing access to markets. • Lack of an industry levy matched by government grants. • Lack of industry-wide promotion, R&D activities, innovation/value-adding, market development, and centralised data/intelligence. • Lack of priorities such as establishing industry distribution networks in EU and USA; improved access to airfreight; more highly integrated road-rail-sea-air transport. • Lack of in-market presence to provide regular intelligence, sales support, promotions and representation in preferred channels and priority markets. • Lack of collaboration across industry; information flows between buyer-supplier-industry; Australian brand and region/species specific brands. Key findings on the strengths of Australia’s Seafood Industry include: • A range of wild caught fisheries that are generally well managed and sustainable. • Within close proximity to the World’s highest consumers of seafood (e.g. Asia). • A reputation for producing and supplying safe, high quality, clean/green, fresh seafood. • Ability to supply product year-round utilising Australia’s large coastline, wide range of species and differing catch seasons. • Australia’s seafood supply chains outperform the competition in Asia in quality, safety and logistics.
national food industry strategy ltd a u s t r a l i a n s e a f o o d s t r a t e g y f o r e x p o r t g ro w t h Table of Contents 1. Introduction. .......................................................................................1 2. Australian Fisheries Production and Export.........................................2 3. Global Seafood Production and Trade .................................................10 4. Global Seafood Consumption And Demand .......................................13 5. Fishery Products, Markets and Trends................................................16 6. Market Opportunities and Market Entry Options ..................................27 7. Impediments To Export Growth ..........................................................32 8. Other Industry Models and Approaches. .............................................34 9. Bibliography .......................................................................................39 Disclaimer: MarkeTrade has prepared this report for the exclusive use of its client, National Food Industry Strategy Ltd. The material contained in this report is of a general nature, and neither purports, nor is intended, to be specific advice on any particular matter other than general advice relating to the client for which the report was prepared. No person should act on the basis of any matter contained in this report without taking appropriate professional advice relating to their own particular circumstances. Apart from providing advice of a general nature for the purposes of the client for which this report was prepared, MarkeTrade expressly disclaims any liability to any person, in respect of anything done or omitted to be done of and as a consequence of anything contained in this report. MarkeTrade 78 Solomon St. Fremantle WA 6160 Ph 08 9335 7382 Mob. 0407 581 481 Email pjb@iinet.net.au ABN 63351 688958
national food industry strategy ltd a u s t r a l i a n s e a f o o d s t r a t e g y f o r e x p o r t g ro w t h page 1 1. Introduction A fundamental aim of the Australian Seafood Strategy for Export Growth (ASSEG) Project is to develop a national strategy to achieve significant export growth for the seafood sector, which includes wild caught and farmed produce. The national strategy will: 1. Establish targets and identify priority opportunities, including feasibility assessments. 2. Identify impediments and establish on going processes to address impediments, whilst taking advantage of the opportunities. The project is divided into three phases, Scoping, Feasibility and Commercialisation. Phase 1. Identify priority market opportunities for Australian seafood in export markets, including a literature review of export markets, opportunities, impediments and priorities as well as a national forum to agree on market priorities. Phase 2. Undertake a feasibility study of a commercial supply chain into a preferred market that is consistent with the outcomes of phase one. Phase 3. Facilitate commercialisation of a supply chain project into a preferred market. As a component of Phase 1, this report provides the findings of a literature review into seafood export markets, opportunities, impediments and priorities. Literature was sourced from Publishers; Government Agencies; World Wide Web; electronic databases; and Industry during November 2003 to January 2004. The review focused on seven aspects that are presented in the following order; 1. Australian fisheries production and exports 2. Global seafood production and trade 3. Global seafood consumption and demand 4. Fishery products, markets and trends 5. Market opportunities and entry options 6. Impediments to export growth 7. Other Industry models and approaches The review aimed to identify recent contributions to the understanding of seafood markets and marketing to identify a range of factors for developing an export strategy for the Australian Seafood Industry. Throughout the Review, a summary of key findings is presented at the end of each section. Statistics on Australia’s seafood fishery production and exports are generally reported in metric tonnes and Australian dollars. Within this review, where appropriate, Australia’s exports have been reported in Australian dollars to reflect value adding, whilst production has been reported in metric tonnes. Throughout the Review footnotes have been used to identify literature sources (i.e. shown at the bottom of each page) and a list of the reviewed literature is presented as a bibliography at the end of the document.
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