Further consolidation in the seafood sector is anticipated following the coronavirus pandemic, with fears the economic downturn could lead to a prolonged period of stifled sales.
Chief executive of industry organisation Seafish, Marcus Coleman, gave the forecast as he addressed an online event hosted by Grimsby and Humber Seafood Forum.
Shutters came down on 80 per cent of the businesses in the SME sector - with the processing sector split as to whether they had a retail outlet.
Now industry leaders wait to see how many re-open as lockdown lifts.
Mr Coleman told how the outbreak came after a strong 2019 it had been hoped the sector could build upon.
The out-of-home market - the one that all but disappeared in lock down as cafes, pubs and restaurants were forced to close - had hit £4.82 billion, up 3.4 per cent, with retail at £3.85 billion, up 0.6 per cent.
Mr Coleman said: “We suspect there will be a lot more consolidation as we come through the Covid-19 crisis.
“If Covid-19 causes the same recessionary effects we had in 2010, we are quite likely to see a real downturn, even in the retail environment in the next few years. We hope that isn’t the case but we should learn from history.”
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The lead figure for the Grimsby and Edinburgh co-headquartered organisation made the position harder to swallow. “2019 shaped up to be a good year for the 海角视频 seafood industry,” he said, reflecting landings being up 1 per cent, and imported seafood up 6.2 per cent. Exports were “flying” at 11 per cent up, hitting £2 billion.
“It was a really strong outlook in 2019, then the year turned and the first quarter of 2020 showed the Covid effect, down in value and down in volume by 11.6 per cent.
“Then in quarter two sales really went over a cliff edge.”
Latest statistics showed a 27 per cent drop in demersal (cod and haddock) and 17 per cent in shellfish, with total landings down 54 per cent.
“People really took a hammering, and if you are in Grimsby or the Humber region, you really have struggled,” he said. He told how 40 businesses on the Seafish radar were classed as SMEs, primarily processing or importing cod and haddock, selling to fish and chip shops, and together employing 1,000 people.
“Around 80 per cent had to close, and we had the closure of Grimsby Fish Market temporarily,” he said.
And while he outlined the retail sector’s surge - with a panic-buying peak of a 56 per cent weekly uplift, frozen outselling chilled for a first time and still up four per cent now, he said: “The retail sector is flying, that will offset to a certain extent, but not for one minute will it cover the loss from other channels.”
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There was a chink of light, though, with fish and chip shops a major end destination for many Grimsby merchants.
“Fish and chips is a very resilient part of the seafood out of home experience,” Mr Coleman said, underlining it was only 33 per cent down considering a full quarter of lockdown, with many managing an early re-emergence ahead of the likes of McDonald’s, with more foodservice businesses to open from July 4.
Not being able to buy in lockdown was the initial issue, but now as the economy suffers the after-effects of higher unemployment, concerns turn to willingness to eat fish, a more expensive protein in comparison to pork and chicken.
“Seafood in a recessionary context is challenged by price,” Dr Angus Garrett, head of seafood horizons for Seafish said. “There may well be continued pressure on affordability, and there will be challenges on the level of innovation and automation (elements of industry development that could help ease price pressure). We could see consumers switching to substitute species or switching out.
“There has been near-term turbulence. We have seen some decline in fresh, chilled and a strengthening of frozen. There has been business impact, we have seen closures, some ceased trading temporarily may or may not come back. There could be a contribution to concentration and consolidation.”
Advance warning from Iceland?
Consolidation in the 海角视频 hasn’t tended to impact on trade or supply, but the clustering of the industry and the tendancy for the catching sector to merge with processors in Iceland may.
Last year saw 50,000 tonnes head to the 海角视频, the majority the Humber, with 41 per cent cod and 21 per cent haddock.
Jonas Vidarsson, research group leader at Matis, Iceland’s government-owned food research and development company, gave an outlook, and told how a concentration and increase in processing may change the dynamic.
Price will dominate, but with less whole fish now being exported, it could see gradual changes.
Stories from the 海角视频's leading seafood cluster:
“Long-term if the prices are right some of the fish will continue to go to Grimsby,” he reassured.
“We do see these clusters investing in more processing capability, which could be a threat for processors in Grimsby.
“We have many small private family-owned companies reaching a generation shift, with a new generation not really interested in working in this industry. Over time they cash out and bigger companies buy them out.
“We see potential consolidation of bigger companies. We see companies either invest in new factories and new technology and see those that can’t keep up will drop out of the race and sell out. This is where we see the next few years.”
It could mean a higher focus on added value.