The traditional Southern Rocklobster supply chain is complex involving many changes of ownership from the wharf to the consumer. It is a commodity selling structure with many competing exporters selling to limited export markets, namely China, Hong Kong and Taiwan.
The chain does not involve a brand, traceability and information flows between catchers and consumers. The structure positions Southern Rocklobster on the basis of price, and serves to minimise premiums based on quality, service and brand recognition.
Fishers in this structure have little appreciation of the chain and market opportunities and have limited understanding of market needs and consumer preferences. Hence they are weak sellers and price takers.
Previous R&D has shown that re-engineering supply chains into diversified markets, based on market requirements and fisher ownership through the chain, can create opportunities to capture premiums for product quality and integrity.
However, each market differs and additional R&D is required to build on the modest gains that have been made to date.
Value for money
A benefits cost analysis has been undertaken based on the following key assumptions:
- a $1/kg increase in price each year for 10 years across the entire harvest
- 500 tonnes pa being supplied to diversified markets by year 5
- $8.5/kg increase in chain returns above beach price increase, from product supplied to diversified markets and
- Ongoing commercial support costs beyond year 5 in the order of $1m per annum.
The discounted cumulative cash flow generated over 10 years at 10% discount rate is approximately $135m.
Level of Impact
SRL aims to build the value of exports by $90m per annum in the long term through market development, and based on the above assumptions, this project is expected to contribute approximately $45m - $50m per annum to the target.
This report provides a synopsis of the Southern Rocklobster Limited (SRL) Market Development Program from 2004, including the Seafood CRC Project 2007/704; commercial trade facilitation; SRL experiences; and suggested next steps for the SRL Market Development Program (MDP). The report has been written with a commercial focus on SRL’s long-term objective of protecting and/or improving prices through globally diversified markets.