« February 2007 Table of Contents
Top 10 Species: Canned tuna
Tuna canners, big and small, launch flavored products to bolster sales
By Rick Ramseyer
February 01, 2007
It's no secret that the canned-tuna category has been mired in a sales slump over the past few years. But some of the segment's movers and shakers are hopeful that new products, enhanced packaging and heightened marketing muscle - emphasizing tuna's status as a lean, heart-healthy protein - will return the category to the growth track.
Moreover, the industry has launched a $5 million public-relations campaign to counter what it sees as misleading media reports about the risk of ingesting harmful levels of methylmercury by eating tuna. The U.S. Tuna Foundation (USTF), representing StarKist, Bumble Bee and Chicken of the Sea - which account for more than 90 percent of the market - began the three-year campaign in mid-2006 to reassure American consumers about the safety of canned tuna, an effort recently bolstered by two favorable, high-profile scientific studies on the benefits of seafood
Meanwhile, niche players such as American T una and Carvalho Fisheries are posting strong sales of U.S. poll- and troll-caught tuna, a small West Coast fishery that is being considered for sustainability certification by the Marine Stewardship Council.
Still, it's clear the shelf-stable tuna category overall needs a jumpstart. For the 52 weeks ending Dec. 2, 2006, U.S. retail sales (excluding Wal-Mart) dropped 3.3 percent to $976.8 million, while unit volume fell 7.6 percent.
Despite the relatively tepid marketplace, canned tuna remains the nation's No. 2 seafood, second only to shrimp. (The primary commercial tuna species for retort processing are albacore, yellowfin and skipjack, harvested by foreign-flagged vessels.)
"Tuna is a very affordable, high-quality, healthy protein that's been a staple of the American consumer for 100 years," says Anne Forristall Luke, president of the USTF in Washington, D.C. "And [companies] are reinventing it in a way by making it more exciting and relevant."
Convenience is the word
If there's a unifying theme among the new tuna products, it's a focus on nutrition, taste and convenience.
Bumble Bee, owned by Connors Bros. Income Fund in New Brunswick, Canada, tapped all three trends last year with its debut of Easy Peel Sensations, a 3-ounce can of flavored tuna with an easy-open pull-tab lid.
"Everything we heard from consumers [about Sensations] was, 'Man, how can we get a bigger can?,'" says Christopher Lischewski, Bumble Bee's president and CEO.
Last fall, Bumble Bee extended the Easy Peel line - it's already a huge hit in Canada under the Clover Leaf brand - with the U.S. rollout of a 5-ounce container. The new item, available nationwide with a suggested retail price of $2.49, comes in three varieties: Spicy Thai Chili, Lemon & Cracked Pepper and Sundried Tomato & Basil.
"In my opinion, the Thai Chili is one of the top three products we produce today," Lischewski says.
Though more easy-open applications are likely, Lischewski says the higher cost - roughly 50 percent more than a traditional can, or 2 to 2 1/2 cents per unit - doesn't make sense for some Bumble Bee products.
"We're not putting Easy Peel on our chunk light 6-ounce tuna," he adds.
StarKist, a Pittsburgh-based subsidiary of Del Monte Foods Co., is in the convenience and taste game as well with a line called Gourmet Choice that features cuts of yellowfin or albacore in easy-open 5.5-ounce cans. The three flavors are Lemon Dill, Roasted Garlic and Premium
"It provides a high-quality experience for consumers who continue to be most comfortable with the can," says Lisa Henriksen, StarKist's VP of marketing.
Innovative tuna products aren't limited to cans. Last summer, Chicken of the Sea introduced tuna cups, targeted "around health and convenience, with the hectic lifestyles that people have," says John Sawyer, senior VP sales and marketing for Chicken of the Sea in San Diego, owned by Thai Union Frozen Products.
The "peel and eat" cups, which Chicken of the Sea highlights as "perfect for school lunches and on-the-go meals and snacks," are retail priced $1.79 to $1.89.
"They've performed very well," Sawyer says, "and have brought new users into the category."
Tuna packed in ubiquitous 6-ounce cans dominates the tuna segment, accounting for the lion's share of volume. (Retail prices in early January ranged from 69 to 89 cents per can for light meat and $1.49 to $1.69 for white, or albacore, meat, according to industry executives.)
Shelf-stable pouched items also are a significant piece of business, comprising traditional light meat and albacore offerings, plus everything from tuna-salad kits to marinated steaks and fillets. Pouched tuna, in fact, is approaching 13 percent of category sales, up from around 10 percent a year or two ago.
"That growth rate has slowed, but is still strong and highly incremental," says Henriksen.
Indeed, StarKist has invested heavily in pouches, including fillets and Tuna Creations, the 5-ounce packets of marinated tuna that are available in four varieties and retail for $1.99.
"It's a great way for consumers to make more interesting recipes and expand usage," Henriksen says.
Nonetheless, pouches aren't the best choice for value shoppers. "In a lot of cases our consumer is Mom," says Lischewski of Bumble Bee. "And while she likes the pouch, the economics are $1.99 for a 7-ounce pouch of light meat [compared with] two cans of 6-ounce light meat for $1."
In tandem with product introductions, the category leaders have boosted promotional efforts.
StarKist touted tuna's health and taste benefits with the "Nourish Yourself" TV campaign that began airing nationwide last summer and could be broadcast again in 2007.
"It's contemporary and elevates the general perception of tuna," says Henriksen, noting that the company also has redesigned the packaging of its entire tuna portfolio to include high-quality food photography and a heart symbol signifying tuna's omega-3-rich heart-healthy makeup.
Further, StarKist is part of "Just One More," a new Del Monte program that urges consumers to add, for instance, one more weekly serving of lean protein, such as tuna, to their diets.
"It's designed to educate consumers how to eat healthier, one serving at a time," Henriksen says.
Chicken of the Sea, meanwhile, after a 14-year hiatus from TV advertising, started a "fun, comedic" TV campaign in 2005 that will continue to air throughout the country in 2007.
"The message will still be
[centered] around health," Sawyer says.
The USTF, too, is gearing up for a national advertising push, similar to the federal "checkoff" programs that supported the "Beef: It's What's for Dinner" and "Pork: The Other White Meat" ads.
"We're still working on the funding mechanisms, but hope to make it a reality sometime in 2008," says Luke.
Finding a niche
The big three tuna companies aren't alone in shaking things up with new products and marketing campaigns.
American Tuna in Bonita, Calif., owned by six fishing families, now sells its 6-ounce canned tuna - available for $5.99 in salt, no-salt, garlic and jalapeño varieties - in nearly 190 Whole Foods store coast to coast.
"We'll never compromise integrity of product by cooking it multiple times, adding water, adding broth," says Natalie Webster, whose husband, Jack, is one of the family fishermen who caught about 1,500 tons of albacore last year.
American Tuna, which will can more than 150 tons of albacore from the 2007 harvest, also is creating a bulk product for delis, starting with 4-pound cans of no-salt tuna, followed this summer by pouches.
Webster is particularly excited about the prospect of Marine Stewardship Council certification of the American Albacore Fishing Association Pacific (North and South) albacore tuna, Thunnus alalunga, and the right to use the MSC eco-label.
"We feel confident we'll be certified prior to the 2007 harvest," she says.
Carvalho Fisheries in McKinleyville, Calif., is benefiting from poll- and troll-caught domestic tuna as well. The company began offering canned tuna several years ago on a small scale and - cheered by increasing demand - formed a separate company called Wild Planet.
Products from Wild Planet are now carried in 250 specialty stores around the country, including Ralph's in Southern California and some Whole Foods outlets. The best seller is the 6-ounce Minimal Mercury Tuna, priced $4.99 to $5.99.
"We segregate small 9- to 12-pound fish from the boatloads, and [thereby] achieve reduced mercury levels from younger fish," says Bill Carvalho, president.
This month, Wild Planet will begin selling a shelf-stable 2-pound foodservice pouch using Oregon fish that are shipped to Ecuador for packaging.
"It's a solid albacore loin," Carvalho says, "and we expect high-end delis to snatch this up."
Bornstein Seafoods in Bellingham, Wash., which produces 6-ounce cans of coastal, surface-caught albacore for retail customers, is also considering a pouch, possibly later this year.
"We've had indications of a foodservice pack and then retail," says Colin Bornstein, manager.
For now, however, the focus is on canned albacore that's sold in pockets nationally under Bornstein's Signature Selection brand (typically priced $3.99) and several private labels.
Methylmercury has been a hot-button issue in the canned-tuna segment in recent years. And confusion abounds.
Methylmercury, which accumulates in long-lived, predatory fish like tuna, is known to harm fetal brain development. That prompted the Food and Drug Administration and the Environmental Protection Agency to issue a joint advisory in March 2004 warning pregnant and nursing women, women of childbearing age and young children to avoid eating certain fish, including more than 6 ounces a week of canned albacore.
The advisory, however, also recommends that consumers in the at-risk group eat up to 12 ounces a week of seafood such as skipjack tuna, which is low in methylmercury.
Nevertheless, subsequent stories in the media sensationalized the issue, tuna representatives say, raising concerns beyond the
scope of the advisory and resulting in a 10 percent drop in canned tuna sales.
Stakeholders stress that the average amount of mercury in canned tuna is many times lower than the conservative regulatory limit. (Albacore tuna contains an average of 0.35 parts per million of methylmercury, while light tuna averages 0.12 ppm, per the FDA. The agency prohibits the sale of seafood that contains more than 1 ppm.)
In mid-2006, to address the controversy head-on, the U.S. Tuna Foundation launched a PR campaign - anchored by an enhanced Web site at www.tunafoundation.org and a new Web log at www.tunablog.com - that focuses on outreach to consumers, wholesale customers, nutritionists and dietitians, plus elected officials and members of environmental groups.
"There's a great deal of confusion in the marketplace," says the USTF's Luke. "An important part of my role is to reassure consumers that our product is safe and healthy."
The foundation's work is buttressed by recent studies, including a 2006 National Academy of Science report concluding that the health merits of seafood overwhelmingly outweigh potential risks, Luke says.
In addition, a study by Harvard Medical School showed that consumption of moderate amounts of canned tuna reduces risk of cardiovascular disease by 36 percent.
"We hope [the campaign] will help consumers learn the facts as opposed to the hype," says Luke.
And those types of initiatives, industry representatives say, bode well for the future.
"If we do a better job of educating the consumer about all the benefits of our products, over the long term we're going to be back in a growth category," says Lischewski of Bumble Bee. "If we get back to [sales increases of] 2 or 3 percent a year, we'll all be pretty happy."
Contributing Editor Rick Ramseyer lives in Cumberland, Maine