Markets and Marketing of Aquaculture and Fisheries Products: Analysis of Store-Level Scanner Data from the United States

Transcription

1 Markets and Marketing of Aquaculture and Fisheries Products: Analysis of Store-Level Scanner Data from the United States MadanM. Dey University of Arkansas at Pine Bluff, USA

2 Overview/Introduction

3 U.S. seafood imports 2013: 2.5 million tons > 90% Other: caviar, seaweed. Canned finfish & shellfish Fresh & frozen shellfish Fresh & frozen fish Source: NOAA, : > 2% Other: minced. Block Whole Fillet and steak Imports (%) Source: NOAA, Imports (%)

4 Grocery store

5 Source: Roheim, 2014

6 2012 Retail sales ($ billion) $500 $450 $400 $350 $300 $250 $200 $150 $100 $50 $0 4% 2% 0% -2% -4% -6% -8% Stores growth "2012 vs 2011" U.S. Worldwide [ ] denotes rank in the U.S. Top 100 retailers Source: National Retail Federation, 2014

7 TOP 25 global retailers 2013 Rank Company Rank Company Rank Company 1 Wal-Mart 10 AEON 18 ITM 2 Tesco 11 Rewe Group 19 Leclerc 3 Carrefour 12 Seven & I 20 Safeway 4 Costco Co. 13 Auchan 21 Ahold 5 Kroger Co. 14 Edeka 22 Sainsbury's 6 Schwarz G. 15 Casino Group 23 Supervalu 7 Metro G. 16 Coles Group 24 Loblaw Cos. 8 Aldi 17 Woolworths 25 Delhaize G. 9 Target *G = Group

8 A.C. Nielsen + Information Resources Inc. Information collected through the scanning of UPC/BAR CODES

9 52 markets Scantrack: (i) food stores >$2million in sales (ii) drug stores and mass merchandise >$ million in sales Gas Convenience Stores Supermarkets Mass Merchandisers Independent Food Stores Supercenters Chain Convenience Stores Drug Stores

10 At the retail level Seafood products can further be differentiated by different combinations of product attributes: species brand product form processing form packaging size.

11 2009: Wal-Mart stores started to participate in the A.C. Nielsen scantrack program Expanded All Outlets Combined (xaoc) ScanTrack includes other key retailers & channels such as: Wal-Mart warehouse club (Sam's and BJ's), dollar stores (Dollar General, Family Dollar ) military/deca

12 Dataset: Without Walmart Stores

13 Store Covered From 133 Food Chains Kroger Food lion Publix Safeway Albertsons (sv) Winn dixie Save a lot corpora Piggly wiggly caro Stop & shop Vons Heb Ralphs grocery Houchens/save-a-lo Albertsons (cerb) NOT Walmart 13

14 Markets Covered Seattle Salt Lake City/Boise Denver Omaha Des Moines Minneapolis Indianapolis Milwaukee St. Louis Grand Rapids Chicago Cincinnati Buffalo/Rochester Detroit Pittsburgh Columbus Syracuse Portland Cleveland Albany Boston San Francisco Hartford/ New Haven New York Philadelphia Baltimore Washington DC Richmond Sacramento Charlotte Louisville Raleigh/Durham Los Angeles Las Vegas San Diego Phoenix West Texas/ New Mexico Oklahoma City/Tulsa Dallas San Antonio Houston Kansas City Memphis Birmingham New Orleans/Mobile Little Rock Tampa Nashville Atlanta Jacksonville Orlando Miami

15 Composition of retail seafood sales Frozen Entrée Items 10% Frozen Breaded Items 7% Anchovy products <0.01% Tuna Shelfstable 35% Frozen Unbreaded Items 24% Canned Items 24%

16 The three frozen/chilled seafood categories Value-added products Breaded seafood Seafood Entrée Unbreaded seafood 16

17 Breaded seafood products offered by retailers, Product Items Brands Forms Types Sizes Calamari 12 8 NA 5 7 Catfish Clams NA 8 8 Cod Crab NA 5 8 Crawfish 4 4 NA 4 4 Flounder Haddock Pangassius Perch Pollock Salmon Shrimp Tilapia Whiting

18 Entrée seafood products offered by retailers, Product Items Brands Forms Types Sizes Calamari Catfish Clams Cod Crab Crawfish Flounder Haddock Pangassius Perch Pollock Salmon Shrimp Tilapia Whiting Trout

19 Unbreaded seafood products offered by retailers in Product Items Brands Forms Types Sizes Calamari Catfish Clams Cod Crab Crawfish Flounder Haddock Pangassius Perch Pollock Salmon Shrimp NA Tilapia Whiting Trout

20 Results of demand analysis based on store-level scanner data ( )

21 How fish/seafood prices and market demand are responding to various factors? Methods State- of the art demand modeling approach Regional and seasonal analysis Price response models Studied many pairs of products; few cases are presented here. 21

22 Demand analysis framework: Three different levels of aggregation 22

23 Elasticities Uncompensated elasticities Dependent variable Price of Breaded products Entrée products Unbreaded products Breaded products Entrée products Unbreaded products Expenditure Elasticity Compensated price elasticities Dependent variable Price of Breaded products Entrée products Unbreaded products Breaded products Entrée products Unbreaded products

24 Finfish and Shellfish disaggregates- Summary Equation* Equation R 2 Equation p-value Average Price ($/lb) Average Budget share (%) Breaded Finfish 0.89 < Breaded Shellfish 0.89 < Entrée Finfish 0.83 < Entrée Shellfish Unbreaded Finfish 0.85 < Unbreaded Shellfish 0.88 <

25 Elasticities Price of Breaded Finfish Breaded Shellfish Elasticity Matrix Dependent variables BFF BSF EFF ESF UFF USF Entrée Finfish Entrée Shellfish Unbreaded Finfish Unbreaded Shellfish Expenditure Elasticity Uncompensated own-price elasticities and Compensated Cross-elasticities 25

26 Demand Analysis: Disaggregated level

27 East North Central Geographical clustering of the markets MIDWEST SOUTH NORTHEAST WEST West North Central East South Central South Atlantic West South Central Mid Atlantic New England Mountain Pacific Chicago Des Moines Birmingham Atlanta Dallas Albany Boston Denver Los Angeles Cincinnati Kansas City Louisville Baltimore Houston Buffalo/ Rochester Hartford /New Haven Las Vegas Portland Cleveland Minneapolis Memphis Charlotte Little Rock New York Phoenix Sacramento New Jacksonvill Orleans/ Salt Lake e Mobile Philadelphia City/Boise San Diego Columbus Omaha Nashville Detroit St. Louis Miami Oklahoma City/Tulsa Pittsburgh San Francisco Grand Rapids Orlando San Antonio Syracuse Seattle Indianapolis Raleigh West Texas Richmond Milwaukee /Norfolk Tampa Washingt on DC

28 Catfish Own-price elasticity Expenditure elasticity Pacific West North Central Mountain West South Central East North Central New England East South Central South Atlantic Mid Atlantic Aug-Oct May-July Feb-April Nov-Jan Pacific West North Central Mountain West South Central East North Central New England East South Central South Atlantic Mid Atlantic Aug-Oct May-July Feb-April Nov-Jan

29 Own-price elasticity Tilapia Expenditure elasticity Pacific West North Central Mountain West South Central East North Central New England East South Central South Atlantic Mid Atlantic Aug-Oct May-July Feb-April Nov-Jan Pacific West North Central Mountain West South Central East North Central New England East South Central South Atlantic Mid Atlantic Aug-Oct May-July Feb-April Nov-Jan

30 Salmon Own-price elasticity Expenditure elasticity Pacific West North Central Mountain West South Central East North Central New England East South Central South Atlantic Mid Atlantic Aug-Oct May-July Feb-April Nov-Jan Pacific West North Central Mountain West South Central East North Central New England East South Central South Atlantic Mid Atlantic Aug-Oct May-July Feb-April Nov-Jan

31 Cross-price Elasticities of Catfish (Substituting Catfish for others) (substitute = Positive value) 3 Salmon Tilapia Whiting Cod Flounder Perch 2 Cross price elasticity (%)

32 Cross-price Elasticities of Tilapia (Substituting Tilapia for others) (substitute = Positive value) 1 Salmon Whiting Catfish Cross price elasticity (%)

33 Cross-price Elasticities of Salmon (Substituting Salmon for others) (substitute = Positive value) 1.5 Tilapia Whiting Catfish Cross price elasticity (%)

34 Dataset: With Walmart Stores

35 Markets covered Atlanta, Boston, Chicago, Detroit, Los Angeles, New York, Philadelphia, Pittsburgh, San Francisco & Washington D.C Time period covered 2009 to 2013

36 $ of product attributes: Hedonic pricing approach Ln(p it )** = β 0 + β 1 Brand it + β 2 SpeciesForm it + β 3 ProcessForm it + β 4 PackageSize it + β 5 OtherProcess it + β 6 Origin it + β 7 Wild it + β 8 Time it + ε i

37 **Current price: weighted price (regular + promotion) Promotion sales (%)

38 Top 10 species = 90% market share Tilapia + salmon = 60% market share Market share (%) Tilapia Salmon Whiting Flounder Swai Cod Catfish Mahi mahi Orange roughy Perch Tuna Snapper Pollock Halibut Haddock 10 0 Atlanta Boston Chicago Detroit Los Angeles

39 Market share (%) Boston, Pittsburgh Tilapia Salmon Swai Saltwater fish Tilapia Salmon Whiting Flounder Swai Cod Catfish Mahi mahi Orange roughy Tuna Pollock Halibut Haddock New York Philadelphia Pittsburgh San Francisco Washington D.C.

40 Implicit Fillet: price: average species 80% + form 16 product forms Washington D.C. San Whole, Francisco portion, cut/steak, strip, loin, fillet, fillet whole, fillet Pittsburgh portion, fillet loin, slice, nugget, bit/piece, finger, stick, wedge, chunk Philadelphia New York Fillet: Los Angeles whiting, catfish, cod, flounder, haddock, mahi mahi, Detroit perch, pollock, salmon, swai, tilapia, haddock (fillet Chicago whole), cod (fillet loin) Tilapia: Boston whole, cut/steak Salmon: Atlanta slice, portion, bit/piece, slider, Fillet Tuna: cut/steak Market share Top-10 Catfish: nugget (%) Top 10 species form

41 Impact on price: species & fillet $/lb Species >1 Whiting 1-2 Tilapia, swai, flounder 65% 2-4 Catfish, cod, haddock 3-5 salmon

42 Fillet as base consumers paid premium for: Form bit/piece cut/steak fillet loin Fillet portion Fillet whole loin nugget portion slice slider stick Species Salmon, cod, flounder, haddock Halibut, tilapia Cod Salmon, perch Flounder, orange roughly, salmon Cod, flounder, mahi mahi Salmon Pollock, salmon, orange roughy Salmon, cod Haddock, salmon Catfish

43 Implicit price: package size 90% of the seafood products sold was below 48oz (12 servings). Price premium varies across markets: Prefer smaller size (below 6oz): Boston, Chicago, Philadelphia, Pittsburgh Prefer larger value-pack size: Atlanta, Detroit, Los Angeles

44 80 oz 64 oz 32-48oz 16-32oz Price premium for smaller package size Washington D.C. San Francisco Pittsburgh Philadelphia New York Los Angeles Detroit Chicago Boston Atlanta Impact on price (%) Base: <16oz

45 Potential price premium attributes: convenience and smoked Impact on price (%)

46 Firm/brand: likely oligopolistic market structure Private labels (PLs) have continued to grow significantly in the seafood markets but it is likely to be market and species specific Top-5 national brands Private labels Atlanta Boston Chicago Detroit Los Angeles New York Philadephia Pittsburgh San Francisco Washington D.C. Atlanta Boston Chicago Detroit Los Angeles New York Philadephia Pittsburgh San Francisco Washington D.C. Atlanta Boston Chicago Detroit Los Angeles New York Philadephia Pittsburgh San Francisco Washington D.C. Atlanta Boston Chicago Detroit Los Angeles New York Philadephia Pittsburgh San Francisco Washington D.C. Market share (%) All species Catfish Tilapia Salmon

47 Private labels + Top 5 NBs = 65 to 85% years Private brands 5-years Top 5 National brands Mixed results: PLs market penetration Market share (%)

48 success rate of firms??? yrs Number of firms

49 success rate of products launched??? Washington D.C. San Francisco Pittsburgh Philadelphia New York Los Angeles Detroit Chicago Boston Atlanta *560 *561 *657 *614 *444 *764 *811 *710 *457 * no. of products launched * Products survived >4 years (%)

50 Implicit price: brand Overall, consumers paid a price premium for private labeled fish products across 10 markets. Price premium for national brands, such as Gorton s, Mrs. Paul, Treasures of the Sea, C. Wirthy Co,. & Great American Seafood.

51 Mixed-species vs species-specific brands Price premium for species-specific brands than mixed-species brands particularly for: saltwater fish products Of all the top 10 brands, consumers paid premium for: C. Wirthy Co.