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Sealord fills Foodstuffs gap – at a price…

8th December 2021 By Bridget O'Connell | bridget@foodticker.co.nz | @foodtickernz

Sealord has managed to find new market opportunities for its fish formerly destined for Foodstuffs – but has taken a 30% hit on the price.

Sealord will sell more of its coated, battered and crumbed frozen fish products in Australia

The Nelson-headquartered fishing business recently saw the amount of frozen product it supplied to Foodstuffs North Island reduced by up to 70% following a category review. Its previous 24-strong range of coated, battered and crumbed fish products shrunk to between four and 11 products depending on the store.

The move resulted in a $5m revenue gap for the company, which in New Zealand sees around 90% of its sales come from retail.

Chief executive Doug Paulin told the Ticker that the firm was able to increase the supply of its processed frozen product to its Australian supermarket customers, but it was also having to divert fish to the lower-margin commodity market.

“At the moment we have replaced we believe 70% of [the $5m revenue] and we’ve got a gap of about 30% remaining because we sold those products at a higher price per kilo than what we would sell them in a commodity market for fish,” Paulin said.

“We were fortunate that we were in relatively strong growth in Australia in Woolworths and Coles in the coated product range.”

In Australia, Sealord generated around 30% of sales from retail with the balance from foodservice.

Paulin added that the company had lost the opportunity “to coat some of the fish products we sell on the commodity basis in the rest of the world”.

“It makes sense to coat it ourselves because then we get further down the value chain. That product that would have gone into Foodstuffs will now be sold on the global market as a commodity – someone else will get that margin by reprocessing into another format.”

On balance, Paulin said that “in the short-term from a business perspective there is unlikely to be a massive hit.”

However, the ramifications for its sales and merchandising workforce were still unclear, and it was not until Foodstuffs’ category review process took in its canned products that the final picture would become clear. Sealord is the leading supplier of canned tuna in retail domestically.

“It does impact on people as well because we have a sales and merchandising force that call on retail outlets in New Zealand, and they of course will be impacted depending on where this inevitably ends up,” Paulin said.

Sealord is 50:50 owned by Māori through Moana New Zealand, and global seafood company Nippon Suisan Kaisha, Ltd (Nissui). It reported a net profit after tax of $29.3m in FY20. 

 

 


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