Russian market of premium fresh fish offers lucrative business opportunities (part 2)

January 29, 2008 16:08
It is worth noting that premium fresh fish is a seasonal product both in terms of demand (sales depend on season and the number of days off and red-letter days during the period under review) and in terms of supply (fish supplies depend on weather conditions, season and other natural factors). Premium fresh fish as a commodity of premium segment covers not only the rational physiological needs but also the emotional ones. At the same time premium fresh fish is considered to be one of the attributes of premium consumer segment. But in comparison with other premium goods (clothes, cars, household appliances) premium fresh fish is relatively affordable and able to meet status needs of a wide circle of consumers.

Speaking about the specific character of this market it is worth noting that premium fresh fish is considered to be not only an exotic commodity but also absolutely non-standard with relation to traditional (for domestic merchandising) quality characteristics and signs of high quality. This to a certain extent complicates the process of incoming quality control of the products during the fresh fish deliveries, for example to retail segment including even international retail chains of companies which have similar experience in purchasing and selling. Thus, the popular parrot fish (with excellent taste properties) in absolutely fresh form has typical slime on its scales what is totally unacceptable in terms of traditional rules of incoming quality control of fresh fish. But this natural characteristic of parrot fish is its defense reflex which is used when fish falls asleep. And the slime only means that the fish is caught in this state. Many exotic fishes have similar natural peculiarities which aren't dangerous for people's health but at the same time they don't meet the requirements of GOST State Standard 7631-85 "Fish, sea mammals, sea invertebrates and products of their processing. Rules of approval, organoleptical methods of quality assessment, procedures of samples' selection for laboratory tests".

FISHERIES Company

FISHERIES Company says it is the only Russian specialized producer and supplier of premium fresh fish for such retail chains as Metro, Real, Ashan, Azbuka Vkusa (the ABC of taste), Globus Gyrme (Globe of Gourmet) and for restaurants (HoReCa). Premium fresh fish, delivered by FISHERIES, is bought directly from producers (foreign and local suppliers - farmers, fishermen and specialized distributors) and then sequentially passes all stages of distribution in the chain "sea-to-store", "sea-to-restaurant". The logistics of Fisheries Company is built on the principle JIT (Just in time), the average distribution rate of fresh fish in the chain "sea-to-store", "sea-to-restaurant" takes 48-72 hours, and in the chain "sea-to-coldstore of Fisheries Company" - up to 48 hours. At Fisheries Company's coldstore fish is only chilled and after carrying out the incoming quality control with the assistance of a representative of veterinary association and sanitation epidemiological service of Moscow City, the products are formed into customer orders and delivered directly to the storage of a customer (stores and restaurants).

Fisheries Company has its own fish filleting department and produces fresh fish fillets. The quality of premium fresh fish is not only the main competitive advantage of Fisheries Company but one of the strategical lines of the company's development. In 2008 the company is going to get its quality management system (QMS) certified according to ISO 22000 and HAACP. Realizing the significance of all aspects of consumer safety and facing the specific character of organoleptical assessment of fresh exotic fish at the stage of incoming quality control, Fisheries Company regularly examines its products in VNIRO (All-Russian fishery and oceanography research institute). The laboratory VNIRO-Test determines the signs of freshness of fresh exotic fish. Thus the company gets a report with detailed information about the signs of freshness of each species. There is no need to say that such documentation considerably simplifies the incoming logistics for retail chains. It also serves as the basis for sales staff training.

Unfortunately there is almost no regular official statistics about fresh fish market. The experts estimate the market capacity of all fresh fish approximately at the level of 350-380 thousand tonnes (less than 9% of total fish market volume). According to the official statistics, in 2005 Russia produced 372 thousand tonnes of live and chilled fish less herring.

At present there are following main trends being observed on the premium fresh fish market:

* the growing popularity of fresh fish, non-finfish aquatic products and seafood-based cuisine owing to the fact that more and more people prefer healthy life-style;

* the growing popularity of bio and eco products, produced without GMO (genetically modified object);

* growth of demand for premium fresh fish as a weekend product;

* innovative technologies of freshness retention (gas environment, liquid ice);

* the dynamic development of fish market has resulted in the growth of its investment appeal. This market is subject to investments and in future - consolidations and mergers;

* economic growth and stabilization as well as the increased incomes of people stimulate the demand for high- quality fresh seafood;

* the dynamic development and the growing number of retail chains, restaurants and hotels;

* infectious diseases of poultry and domestic animals, customs barriers and quarantines boost demand for premium fresh fish.

In order to meet rational fish consumption rates (25-30 kilos per capita per year) the fish market potential in Russia has to amount to no less than 4.5 million metric tons. According to international average fish consumption rates per capita, the growth of fish consumption up to two times a week can increase market capacity up to 9 million tonnes. But at the same time no less than 40% (according to European standards) or 1.8-3.6 million tonnes must fall at fresh fish. According to the company's estimates, at present the premium market segment of fresh fish is developed approximately at 30% indicating its potential for further growth.

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