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
Overview/Introduction
U.S. seafood imports 2013: 2.5 million tons > 90% Other: caviar, seaweed. Canned finfish & shellfish Fresh & frozen shellfish Fresh & frozen fish Source: NOAA, 2014 2013: > 2% Other: minced. Block Whole Fillet and steak 0 20 40 60 Imports (%) Source: NOAA, 2014 0 20 40 60 Imports (%)
Grocery store
Source: Roheim, 2014
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 2013.. Source: National Retail Federation, 2014
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
A.C. Nielsen + Information Resources Inc. Information collected through the scanning of UPC/BAR CODES
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
At the retail level Seafood products can further be differentiated by different combinations of product attributes: species brand product form processing form packaging size.
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
Dataset: Without Walmart Stores 2005-2010
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
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
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%
The three frozen/chilled seafood categories Value-added products Breaded seafood Seafood Entrée Unbreaded seafood 16
Breaded seafood products offered by retailers, 09-10 Product Items Brands Forms Types Sizes Calamari 12 8 NA 5 7 Catfish 34 18 7 8 10 Clams 25 14 NA 8 8 Cod 51 22 8 17 18 Crab 13 10 NA 5 8 Crawfish 4 4 NA 4 4 Flounder 27 16 3 13 13 Haddock 42 17 5 15 14 Pangassius 0 0 0 0 0 Perch 10 9 2 6 4 Pollock 10 6 5 9 5 Salmon 3 3 2 3 1 Shrimp 315 56 14 28 9 Tilapia 30 22 5 13 10 Whiting 8 6 1 2 6 17
Entrée seafood products offered by retailers, 09-10 Product Items Brands Forms Types Sizes Calamari 17 11 5 12 7 Catfish 11 5 3 9 8 Clams 45 18 3 16 12 Cod 41 28 10 30 14 Crab 169 62 20 39 49 Crawfish 37 24 5 13 20 Flounder 24 16 4 14 9 Haddock 14 6 4 9 13 Pangassius 1 1 1 1 1 Perch 3 3 2 3 3 Pollock 11 8 4 8 8 Salmon 224 79 16 177 40 Shrimp 378 85 27 272 50 Tilapia 141 46 10 117 21 Whiting 2 2 2 2 2 Trout 6 1 1 5 2 18
Unbreaded seafood products offered by retailers in 2009-10 Product Items Brands Forms Types Sizes Calamari 180 69 16 16 12 Catfish 143 58 7 6 17 Clams 50 27 4 25 10 Cod 114 66 9 26 17 Crab 384 124 21 60 32 Crawfish 81 55 6 5 9 Flounder 81 45 5 8 12 Haddock 45 27 5 6 9 Pangassius 31 16 3 4 7 Perch 39 50 4 8 12 Pollock 104 63 10 19 16 Salmon 308 124 17 65 32 Shrimp 3834 280 NA 603 37 Tilapia 214 100 5 7 17 Whiting 110 58 3 11 11 Trout 19 13 3 8 9 19
Results of demand analysis based on store-level scanner data (2005-2010)
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
Demand analysis framework: Three different levels of aggregation 22
Elasticities Uncompensated elasticities Dependent variable Price of Breaded products Entrée products Unbreaded products Breaded products Entrée products Unbreaded products -1.051 0.456-0.072 0.222-0.932-0.093 0.186 0.189-1.104 Expenditure Elasticity 0.643 0.415 1.244 Compensated price elasticities Dependent variable Price of Breaded products Entrée products Unbreaded products Breaded products -1.07 0.439-0.036 Entrée products 0.212-0.941-0.074 Unbreaded products 0.133 0.142-1.004 23
Finfish and Shellfish disaggregates- Summary Equation* Equation R 2 Equation p-value Average Price ($/lb) Average Budget share (%) Breaded Finfish 0.89 <0.001 3.77 17.70 Breaded Shellfish 0.89 <0.001 6.18 5.40 Entrée Finfish 0.83 <0.001 5.63 5.98 Entrée Shellfish - - 4.94 6.51 Unbreaded Finfish 0.85 <0.001 4.22 17.11 Unbreaded Shellfish 0.88 <0.001 6.22 47.30 24
Elasticities Price of Breaded Finfish Breaded Shellfish Elasticity Matrix Dependent variables BFF BSF EFF ESF UFF USF -1.216 0.621 0.307 0.289 0.008 0.022 0.150-1.882 0.098 0.114-0.002 0.117 Entrée Finfish 0.070 0.112-1.002-0.017 0.001 0.024 Entrée Shellfish Unbreaded Finfish Unbreaded Shellfish Expenditure Elasticity 0.074 0.110-0.036-0.898-0.081 0.033 0.005 0.045 0.071-0.109-1.030 0.132 0.031 0.180-0.030 0.186 0.141-1.153 0.634 0.766 0.461 0.413 0.904 1.347 Uncompensated own-price elasticities and Compensated Cross-elasticities 25
Demand Analysis: Disaggregated level
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
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 -5.00-4.00-3.00-2.00-1.00 0.00 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 0.00 0.50 1.00 1.50
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 -2.25-1.75-1.25-0.75-0.25 0.25 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 0.00 0.50 1.00 1.50
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 -2.25-1.75-1.25-0.75-0.25 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 0.00 0.50 1.00
Cross-price Elasticities of Catfish (Substituting Catfish for others) (substitute = Positive value) 3 Salmon Tilapia Whiting Cod Flounder Perch 2 Cross price elasticity (%) 1 0-1 -2-3 -4-5
Cross-price Elasticities of Tilapia (Substituting Tilapia for others) (substitute = Positive value) 1 Salmon Whiting Catfish Cross price elasticity (%) 0.8 0.6 0.4 0.2 0-0.2
Cross-price Elasticities of Salmon (Substituting Salmon for others) (substitute = Positive value) 1.5 Tilapia Whiting Catfish Cross price elasticity (%) 1 0.5 0-0.5-1 -1.5
Dataset: With Walmart Stores 2009-2013
Markets covered Atlanta, Boston, Chicago, Detroit, Los Angeles, New York, Philadelphia, Pittsburgh, San Francisco & Washington D.C Time period covered 2009 to 2013
$ 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
**Current price: weighted price (regular + promotion) Promotion sales (%) 60 40 20 0
Top 10 species = 90% market share Tilapia + salmon = 60% market share Market share (%) 60 50 40 30 20 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
Market share (%) 45 40 35 30 25 20 15 10 5 0 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.
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 0 20 40 60 80 100 Top-10 Catfish: nugget (%) Top 10 species form
Impact on price: species & fillet $/lb Species >1 Whiting 1-2 Tilapia, swai, flounder 65% 2-4 Catfish, cod, haddock 3-5 salmon
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
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
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 -80-60 -40-20 0 Impact on price (%) Base: <16oz
Potential price premium attributes: convenience and smoked Impact on price (%) 300 250 200 150 100 50 0-50 -100
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. 100 90 80 70 60 50 40 30 20 10 0 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
Private labels + Top 5 NBs = 65 to 85% 100 80 5-years Private brands 5-years Top 5 National brands Mixed results: PLs market penetration Market share (%) 60 40 20 0-20 -40
success rate of firms??? 140 120 2009 2010 2011 2012 2013 5-yrs Number of firms 100 80 60 40 20 0
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 *378 0 10 20 30 40 50 Products survived >4 years (%)
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.
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.