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Top Species: Farmed salmon

Salmon’s popularity leads to brand building

Smoked salmon suppliers hope to replicate their success in Europe stateside. Photo courtesy of Marine Harvest
By Joanne Friedrick
April 01, 2014

While salmon continues to achieve a high level of popularity among all seafood offerings, many in the farmed salmon community are looking to delineate themselves within the overall salmon category by focusing on name recognition. Companies are hoping to make their products more visible and desirable among retail and foodservice customers through branding. Marine Harvest, the world’s largest farmed salmon producer, acquired smoked salmon processor Morpol, based in Poland, this past year, and is now looking to expand the brand’s awareness beyond Europe to the United States, says Laura McNaughton, business manager for Morpol NA.

The Morpol acquisition coincided with Marine Harvest’s decision to close some processing facilities in Europe and South America, she says. Marine Harvest’s smoked salmon was previously produced with fish from South America, says McNaughton, but Morpol’s product comes from farms in Scotland and Norway, which she says produce a fattier fish.

“The trimmings are better and more aesthetically appealing,” she says, “and I think that will attract new customers.”

Smoked salmon is popular in Europe, and McNaughton is trying to grow the category within the United States by looking at what has worked for Morpol internationally. Germany is Morpol’s largest market.

Part of that focus is seeing how product is displayed, and determining the right type and package size for retailers. The rollout is starting with 4-ounce and 8-ounce semi-skin — hand-trimmed pieces with some of the skin left on — packs of Norwegian, Scottish, gravlax and two varieties of hot-smoked salmon, all marketed under the Admiral’s brand. For club stores, where the category is already growing by more than 25 percent, the emphasis is on vertical display boxes, she says.

Morpol also processes Irish organic smoked salmon that it sells under private labels and may expand that into North America, says McNaughton.

The value of Norway’s seafood exports, from which Morpol draws some of its supply, was up 13 percent after two down years, and Norwegian Seafood Council CEO Terje Martinussen credits this new export record to the strong demand for Norwegian salmon on the world market, which resulted in high prices in 2013.The average price of a whole Norwegian salmon was about $3.03 per pound, up 44 percent over the previous year. Volume for Norwegian salmon in 2013 totaled 2.3 million metric tons.

Chile, another major farmed salmon producer, saw the value of its salmon exports for the first 10 months of 2013 increase by 23 percent, even while the volume declined 13 percent. 

However, predictions for 2014 are that production will flatten, says Harry Mahleres, director of purchasing for Seattle Fish. Chile’s smolt release figure shows a drop of 3 percent, while Norway’s is slightly higher, says Mahleres. Some Norwegian brokers have also spoken publicly about likely price decreases as post-holiday stocks build. 

Brand building 

While Morpol is working to establish itself within the United States, Marine Harvest is also rolling out value-added salmon products under its new Rebel Fish brand, says Linda Rank, director of marketing and new product development for Marine Harvest in Los Angeles. 

In development for about a year, the portioned salmon is available with six different rub flavors such as cilantro lime, Thai chili and Cajun blackened and can be cooked in the oven, on the grill or microwaved. The latter allows consumers to create the dish in about 90 seconds, she adds.

Rank hopes supermarkets will merchandise this fresh product in cases near the seafood department. 

Europeans are more familiar with this pre-packaged concept, says Rank, who visited retailers in Scotland to see how they handle displays. In-store demos will be used to introduce the new items.

Marine Harvest is also re-launching its Sterling foodservice brand, which is focused on white-tablecloth restaurants and the sushi trade, says Rank. Beyond the new logo and packaging, the key change will be an additional grading process to segregate the top 5 percent of the company’s Canadian farmed salmon for Sterling.

“We have a team that hand-selects it,” she says, “and then packs it only when a distributor places an order.” The new emphasis for Sterling makes it a more elite and luxurious brand, says Rank.

The retail story 

Scott Nichols, director at Verlasso, which produces salmon through a partnership with AquaChile, says the focus on gaining regional retailers in 2013 has given way to a more national retail strategy this year. The company got its salmon into Andronico’s, Central Market and Heinen’s, and is now looking at larger retailers.

“We’ve moved from narrow geographic areas into national groups,” he explains. While the size and scope of the retailers they are targeting has changed, the approach — talking about the sustainability of the salmon, how it is fed and raised — remains the same.

The way to tell the salmon’s story, he says, is to communicate with consumers via the retailer or by directing people to the company’s website and Facebook page. 

Verlasso does in-store tastings as well, and uses that opportunity to discuss issues such as net-pen density and what the fish are being fed. 

“[Consumers] get it right away,” he says. “And we’ve gotten better at telling the story since people are more interested in where their fish is coming from and how it is raised.”

Dialogue between Verlasso and consumers through social media has helped get the word out, as have chefs who are working with the product, says Nichols.

To meet increased demand, Verlasso has gone to three harvests a week from two. And there is ample supply to meet demand, he adds. The product remains at a premium price to non-branded farmed salmon, he says, with retailers and distributors being the ultimate arbiters of where prices will land.

Skuna Bay, another player in the premium salmon market, has been operating with reduced supply this past year, explains David Mergle, director at the Vancouver, British Columbia-based business.

Weather, or more precisely the lack of rain and storms, created challenges for the farm sites, he says.  

“The water becomes placid and we can’t feed the fish, so they don’t gain any weight,” he says. Skuna Bay operates under strict standards for the size of fish it takes out of the water, so lack of quality fish means less business.

Now, however, “the fish are back on track; they’re a nice weight,” he says, estimating that volume will still be down for the first half of the year, so the company is focused on supplying its current customers rather than expanding.

Last year, Skuna Bay launched its product in the Pacific Northwest market. Although just in its backyard, that market is heavily skewed toward wild salmon, Mergle says, so it can be harder to make inroads with farmed fish.

The company worked with Ocean Beauty for distribution in the region. “We’ve seen a lot of interest and excitement,” says Mergle, “and I think the Northwest will be among the fastest-growing areas for us.”

The company also entered New England in 2013, but found the logistics of getting its fresh fish there a bit challenging. 

“It is not as good as we hoped it would be,” acknowledges Mergle. “But it’s such a good seafood market, so we’re optimistic about operations there.”

Another new addition for Skuna Bay is smoked salmon through a partnership with Gerard & Dominque Seafoods (G&D), a salmon smoking operation based in Kenmore, Wash. Finding a partner for the smoked product was similar to selecting distributor partners, says Mergle, with a thorough due diligence process involved. He says G&D bases its decision on what a chef would do to produce it, “and the result is a really nice product.” Skuna Bay uses its existing distributors to handle the smoked salmon.

Rolling out the smoked salmon means overcoming some of the biases people have about smoked product — that it isn’t high quality. “We use the best fish and methods,” he says, but that is reflected in the price, so Skuna Bay smoked salmon is aimed at a specific, higher-end customer.

Skuna Bay, which packages its fish three to a box, is continuing to work with its distributors and customers to refine the shipping process, says Mergle. 

While the company continues to deliver primarily by land vs. air, he says it is spending more time doing in-field quality audits to ensure that customers are getting what they expect.

“We have people who can be our eyes and ears on the quality. They can be in the kitchen when the fish arrives to see it and test it, and that helps us tweak our program,” he says.

As demand continues to increase for salmon in general, Mergle says it will be interesting to see how supply and price situations play out. Once Skuna Bay is back on track, he says, it will turn toward expanding into Texas and the Southeast.

In the meantime, it is building recognition for the brand through participation in events such as the Kentucky Derby’s Taste of the Derby and Taste of the NFL during the Super Bowl and events at the James Beard House like the Skuna Bay Salmon Seduction Dinner.

Contributing Editor Joanne Friedrick lives in Portland, Maine

Find other SeaFood Business articles discussing farmed salmon here.

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