By Catherine Norwood
While supermarkets are undoubtedly a major force shaping seafood retail trends, other initiatives such as online sales and collaborative marketing are also giving fishers greater control of their future by forging stronger connections with customers.
Arthur Raptis, CEO of leading Australian seafood supplier A. Raptis & Sons, believes the outlook for the fishing industry is extremely positive. And he is keen to ensure that more people than just fishers know this; he is among several fisheries-specific presenters sponsored by the FRDC at the Australian Bureau of Agricultural and Resource Economics and Sciences 2015 Outlook Conference in Canberra in March.
The Raptis family business was established in South Australia in the 1950s and it remains fundamentally a fishing business, according to Arthur, grandson of the founder.
However, it is also one of Australia’s largest, privately owned, fully integrated seafood companies, with a long history of harvesting, processing, wholesaling and retailing into both domestic and export markets. As CEO, Arthur Raptis is well placed to identify the trends that are shaping the future of seafood retailing and what they mean for the industry.
In supermarkets, raw and cooked prawns, and Atlantic Salmon make up the top three seafood categories. Together, they outsell the combined total of all other fresh seafood categories. However, Arthur Raptis says pre-packaged convenience meals are an emerging trend in the major supermarkets.
New technologies have created a wave of ready-to-go products using modified atmosphere packaging (MAP), which replaces oxygen with other gases to stabilise shelf life, and skin packs, which remove the oxygen and vacuum-seal the product with plastic film.
“The ready-to-go meal category has been growing by more than 10 per cent a year across all supermarkets in Australia for the past few years,” he says. A. Raptis & Sons already has a range of new products to meet demand, including Atlantic Salmon portions, crumbed flathead or whiting, Saddletail Snapper fillets and garlic prawn cutlets.
“Customers like ready-to-go meals because they are convenient, and because they don’t actually have to touch the raw fish. They can take it home, take the plastic off and tip it straight into the frypan. There is no smell because it is sealed, so even if they don’t cook it straight away, it’s not smelling out the fridge,” he says.
A big plus for supermarkets is the potential to reduce labour costs by reducing the need for behind-the-counter service staff. Seafood is beginning to appear more regularly on the same refrigerated shelves as pre-packaged chicken, beef and pork. In some countries, such as Britain, behind-the-counter service for seafood has been almost entirely eliminated in favour of ready-to-go meals.
Arthur Raptis predicts that within 10 years this category will provide the greatest profitability for the seafood industry, with people shopping more frequently for just a few meals at a time.
However, Arthur Raptis acknowledges that it is not a simple matter to gain access to a place on the supermarket shelves. Environmental accreditation is a baseline expectation, as is meeting an ethical standards audit – an internal process instituted by both Coles and Woolworths for their suppliers. “If you can’t meet those standards, you can’t even get in the door,” Arthur Raptis says.
“The supermarkets have really led the way in their expectations, even though many members of the public would not really understand what a ‘sustainable fishing source’ means. Sustainability as a consumer-driven requirement doesn’t quite exist yet, but the knowledge and the expectations of consumers are growing.”
While supermarkets demand more from their suppliers, they also provide powerful allies who can help build seafood sales, particularly in conjunction with collaborative industry marketing initiatives. Collaborative initiatives also provide sales impetus for the independent seafood sector, which may not have the marketing clout of Coles or Woolworths.
The ‘Love Aussie Prawns’ campaign, initiated by the Australian Seafood Cooperative Research Centre, is an example, bringing together producers from both the wild harvest and aquaculture sectors, with an annual budget from voluntary contributions of more than $700,000 for the first two years of the campaign.
As one of Australia’s largest prawn fishing companies, harvesting from both the Northern Prawn Fishery and the Spencer Gulf in South Australia, A. Raptis & Sons has been a major contributor to the campaign.
“As individual companies we can only do so much, but as a broader group you start to pool your money together and you can engage with experts to guide you,” Arthur Raptis says. “Working with Brand Council, there has been a great deal of thought put into the campaign.”
The marketing focus has been on promoting the ‘specialness’ of prawns as an essential part of any celebration. In the first year the campaign worked with independent seafood retailers, expanding this to major supermarkets in the second year.
“Coles and Woolworths in particular have really jumped on board, and that’s where most of the product is being sold,” he says.
The result has been an increase in the base price of prawns and demand for Australian prawns, both cooked and raw, now outstrips supply.
The increase in demand has been complemented by the growing popularity of television cooking shows, greater awareness about how to prepare seafood and the development of cooking as a hobby, rather than an obligation, he says.
Supermarkets are also making use of an increasingly sophisticated digital marketing landscape. Quick response (QR) codes, website links and serving suggestions on product packaging, supplemented by discount coupons from food or supermarket websites, encourage the purchase of complementary ingredients to complete a meal and drive sales. The partnership between Coles and the recipe website Taste (which receives 2.5 million views a week) is just one example.
However, Arthur Raptis says an increasing number of seafood and fishing companies are also getting serious about their branding, with a strong online presence and the use of QR codes to provide more product information. Opportunities in the digital space for fishers include online sales as well as marketing.
The success of online ordering allowed A. Raptis & Sons to close the retail outlet at its processing operations in Brisbane in 2013. It now offers a pick-up or delivery service for local customers, which becomes a drive-through pick-up only during the busy Christmas period.
In December 2014 the company took more than 2000 online orders, mostly for prawns. Christmas sales were supported by a targeted Facebook promotion, which Arthur Raptis says cost one-tenth of a comparable radio campaign.
From the millions of Facebook users in Australia, the company refined its target audience to a closely defined target demographic: women aged 25 to 40 who live in Brisbane, the Gold Coast or the Sunshine Coast, and who list food or seafood as a hobby or interest.
“We reached 35,000 selectively identified people in the four weeks before Christmas. More than 10,000 people have clicked on our advert and we now have 6300 people who are following us – who have ‘liked’ our website. Most fishing and seafood companies are quite small, but with digital marketing you can do a highly targeted campaign like this for only $3000,” he says.
Arthur Raptis expects online business will become an increasingly popular business model, given the high cost of retailing in Australia. For those who already have a seafood business or a factory, it is a relatively small step to develop an online ordering system and offer a delivery or pick-up service. “There are lots of options for companies to approach distributors; refrigerated courier companies are already popping up all over the place,” he says.
In recent years the industry has focused largely on domestic markets as the Australian dollar, at parity with the US dollar, closed off many export opportunities. But Arthur Raptis sees market forces beginning to realign in Australia’s favour.
The huge demand for seafood across South-East Asia, and the Free Trade Agreement with China, which will remove tariffs on seafood, are part of this equation. While Japan has been a major seafood export destination for many years, China, including Hong Kong and Taiwan, will be the new growth market, he says.
“Fuel prices are coming down, the Australian dollar is coming down, demand for seafood domestically is going up, export demand is going up. For those in the fishing industry who have been able to hang on through some really difficult times, I think there are good things ahead.”
The Australian Bureau of Agricultural and Resource Economics and Science (ABARES) is a research bureau within the Australian Department of Agriculture that provides independent research, analysis and advice for government and private-sector decision-makers on issues affecting Australia’s agriculture, fisheries and forestry industries.
The program for the Outlook 2015 Conference features several fisheries-specific presentations.
The full program for the Outlook 2015 Conference and presentations following the conference can be viewed online.
While customers are often surprised to find that the seafood company A. Raptis & Sons actually operates its own vessels – 15 of them, in fact – the CEO of the company, Arthur Raptis, says fishing continues to take precedence in everything the company does.
However, there is also a good deal of engineering involved and a major focus on technology ensures that fishing operations, and the subsequent processing, packaging and distribution, are always as efficient as possible.
Speed in sorting is critical, as prawns begin to turn black very quickly after being removed from the water. Arthur Raptis says the company has invested a great deal in automating as much of the sorting process as possible so that prawns are caught, sorted, packed and snap-frozen quickly.
The company’s newest vessels are fitted with giant tanks on the back, filled with brine water chilled to 0°C , and a conveyor belt running under the water takes the prawns from the tanks through the sorting and packing line.
He says, over time, the improvements in catch handling and onboard processing have increased the overall quality and profitability of the company’s catch.
Of a three-tonne haul, for example, it used to be that the first tonne was packed for premium domestic markets. The second tonne, packed after some time had elapsed, would be of lesser quality, and sent offshore for processing before being sold back into the domestic institutional or food service market.
As more time elapsed, the remaining lowest quality product would be packed for export markets and processed as an ingredient for other food products, such as dim sum or prawn balls, sold overseas.
“But the technology on our newer vessels allows us to sort faster and we can pack quickly enough to sell the first two-thirds into premium markets and the final third as processed product for the domestic market,” Arthur Raptis says.
“Less is being processed overseas and the products we resell into the domestic food service sector, such as breaded and crumbed prawns, or meat and cutlets, are also returning as much as our premium-grade product.
“We work with customers to place product in the best possible form for that particular market; to do those things cost-effectively takes a great deal of engineering and ingenuity.”
He says while it is hardly practical to pack fish at sea into ready-to-serve portions, there have been changes to onboard processes that do reflect demand for smaller, more easily handled units.
Twelve-kilogram bulk cartons were once the standard for prawns, but the crew now pack in varying sizes to meet specific client needs – five kilograms for supermarkets and down to two kilograms for some export markets.
Always on the lookout for new technology to further improve efficiency, Arthur Raptis is already planning to make use of military-style laser location tagging, which he expects will improve the accuracy of tracking schools of prawns.
GPS coordinates generated from spotter planes can often be out by a kilometre or more. When vessels arrive at the nominated location, there are no prawns; it is a huge waste of time and energy.
But coordinates generated from a laser tag of the prawns where they are visible on the ocean surface will be far more accurate. Skippers will also be able to allow for currents, winds and time elapsed since the school was spotted.
“This will make us much more effective at targeting the product in the limited time available for fishing and increase the likelihood of there being fish to catch when we arrive,” Arthur Raptis says.