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10 Typescript Pages L.) No. 5246 Original Language ISSN 0704-3716 . Canadian Translation of Fisheries and Aquatic Sciences L.) No. 5246 Strategy for marketing Norwegian consumer herring O. Osland, R. Richardson, and T. Vassdal Original title: Strategi fo markedsforing av norsk konsumsild In: Fiskeriteknologisk Forskningsinstitutt Rapp. 674-7-1, 1985 (Table of contents and introduction only) Original language: Norwegian Available from: Canada Institute for Scientific and Technical Information National Research Council Ottawa, Ontario, Canada KlA 0S2 1986 10 typescript pages ‘ Secretary Secrétariat 40 of State d'État MULTILINGUAL SERVICES DIVISION — DIVISION DES SERVICES MULTILINGUES TRANSLATION BUREAU BUREAU DES TRADUCTIONS LIBRARY IDENTIFICATION — FICHE SIGNALÉTIQUE Translated from - Traduction de Into - En Norwegian English Author - Auteur Ove Osland, Roger Richardson, & Terje vassdal Title in English or French - Titre anglais ou français Strategy for marketing Norwegian Consumer herring Title in foreign language (Transliterate foreign characters) Titre en langue étrangère (Transcrire en caractères romains) Strategi fo markedsfering av norsk konsumsild Reference in foreign language (Name of book or publication) in full, transliterate foreign characters. Référence en langue étrangère (Nom du livre ou publication), au complet, transcrire en caractères romains. Reference in English or French - Référence en anglais ou français Publisher - Editeur Page Numbers in original DATE OF PUBLICATION Numéros des pages dans DATE DE PUBLICATION l'original 8 Year Issue No. Vol urne Place of Publication Année Numéro Number of typed pages Lieu de publication Nombre de pages dactylographiées 1985 10 Requesting Department Translation Bureau No. L SM 6 -0844 Ministère-Client DFO Notre dossier no Branch or Division IPB Translator (Initials) JMK Direction ou Division Traducteur (lnitiales) Person requesting Demandé par N. Johnson Your Number Votre dossier no Date of Request 86.09.03 Date de la demande Canaa' SEC 5-111 (84-10) Secretary Secrétariat of State d'État MULTILINGUAL SERVICES DIVISION — DIVISION DES SERVICES MULTILINGUES TRANSLATION BUREAU BUREAU DES TRADUCTIONS Client's No.—N° du client Department — Ministère Division/Branch — Division/Direction City — Ville 2537238 DFO IPB Ottawa Bureau No.—No du bureau Language — Langue Translator (Initials) — Traducteur (Initiales) LSM 6-00844 Norwegian JMK SEC 5-25 (Rev. 82/11) Canada TITLE OF REPORT: Strategy for Marketing Norwegian Consumer Herring. AUTHORS: Ove Osland, Roger Richardson and Terje Vassdal. REQUIRED BY: The Norwegian Industry Bank and The Districts' Development Fund EXTRACT: The report surveys today's industry structure and important limiting conditions for the Norwegian consumer herring industry. The situation of the industry in relation to important competing countries is discussed, to- gether with the relationship with existing and new markets. In conclusion, dangers and possibilities pertaining to different strategies for marketing Norwegian consumer herring are dis- cussed. In addition to the present main report, detailed source material will be available in the form of four supplemen- tary reports. This deals in the main with the structure and extent of the consumer herring industry, markets for herring in West and East Europe, and the cost factors pertaining to production and sale of herring products. INDEX PREFACE 1 1. INTRODUCTION 4 2. INDUSTRY STRUCTURE AND POSSIBILITIES FOR ACTION IN THE CONSUMER HERRING INDUSTRY 9 -2- 2.1. Conditions relating to concentration in the consumer herring industry 10 2.2. Product differentiation and market types in the consumer herring industry 19 2.3. Conditions for adjustment in the consumer herring industry 22 3. POTENTIAL NEW PRODUCERS 26 3.1. Norwegian spring spawning herring 26 3.2. Herring in the North Sea 29 3.3. Other stocks around the British Isles 32 3.4. Herring in Skagerak/Kattegat 33 3.5. Herring at Iceland 33 3.6. Herring in the Baltic 34 3.7. Canadian herring resources 35 3.8. American herring resources 36 4. THE INDUSTRY VIEWED IN RELATION TO THE RISK FACTORS 38 4.1. Organizing the initial enterprise 38 4.2. Raw material quality - equipment, form of the catch and technical problems 39 4.3. On-board production 42 4.4. Klondyking 43 4.5. Delivery directly abroad 44 • 4.6. Production costs 45 5. MARKET CONDITIONS 47 5.1. Markets for herring within EEC (European Economic Community) 47 5.1.1. General 47 5.1.2. Development of catches within EEC 48 -3- . 5.1.3. Trend in import of herring by EEC 49 5.1.4. Market trends in EEC 51 5.1.5. Price developments 52 5.1.6. Import regulations for herring in EEC 53 5.2. Norway's position on the EEC markets 58 5.2.1. Fresh herring 58 5.2.2. Frozen herring 59 5.2.3. Salted herring 61 5.2.4. Herring preparations 62 5.2.5. Smoked herring 62 5.3. Sweden and Finland 62 5.3.1. Export and import 63 5.4. Market for herring in East Europe 66 5.4.1. Russia 67 5.4.2. Poland 76 5.4.3. Czechoslovakia 70 5.4.4. East Germany 71 5.4.5. Other East European countries 72 5.5. Japan 73 5.5.1. Japanese herring catches 73 5.5.2. Import of edible herring 75 5.5.3. Import of herring roe 77 5.5.4. Norwegian export potential 83 5.6. Other new markets for herring 84 6. DANGERS AND POSSIBILITIES PERTAINING TO DIFFERENT MARKET STRATEGIES 88 6.1. Co-operation as a strategy 88 6.2. Regional concentrations in the consumer herring industry 88 -.4-- 6.3. Possibilities of co-operation in sales and marketing 89 6.4. Transport factors 92 6.5. Downstream activities 93 6.6. Institutional barriers 95 7. CONCLUSIONS AND SUMMARY 98 7.1. Abundant supply - saturation of markets can be expected 98 7.2. Markets 98 7.3. East Europe 99 7.4. Japan and the remaining Asiatic markets 101 7.5. U.S.A. - North America 102 7.6. The Norwegian domestic market, Sweden and Finland 102 7.7. Little need for a general expansion of capacity 103 7.8. Greater need for cost reducing investments 104 7.9. Market conditions in the long term 105 -5- 1. Introduction The Norwegian spring spawning part of the Atlantic- Scandinavian herring stock was heavily overfished at the end of 1960s. From 1967 to 1968 the catches of winter herring were re- duced by more than 90%, and from 1971 there was a total ban against catching winter herring. For a long time, therefore, there has been a ban in Norway against catching winter herring. From the end of 1970s, limited fishing of fat herring has been permitted in North Norway. Fat-herring is of the same stock as the Norwegian spring spawning herring, but it carries the name "fat-herring" before it becomes sexually mature. Only in 1984 it was permitted_ to fish for winter herring again, but with a quota limited to 20,000 tonnes. One can assume that altogether about 40,000 tonnes of spring spawning herring will be caught each year now. The consequence of this is that Norway for a long time has been practically absent from the large herring markets, with the exception of a little fat-herring and some North Sea herring for consumer use. During this time, changes have taken place in the markets. For one thing, Canada has entered the European market with herring caught on its Atlantic coast. The fishing pattern in the North Sea has also changed, at the same time as the East European countries have largely based their consumption of herring on their own catches in the Baltic. The pattern of trade has changed, as have eating habits and prefer- ences for the different herring products. -6- Herring, to a certain extent, has been replaced by other types of fish, especially mackerel. It is unclear whether this is the result of a small supply of herring, or whether it is a reflection of a long term trend. It is obvious that there has also been a change in the demand curve for some herring pro- ducts, especially salt herring. The turnover of salt herring has fallen on several large markets, without an increase in price. The prices of fresh herring have fallen in real terms in the last few years. It could therefore cost considerable sums to establish ourselves as one of the dominant suppliers of consumable herring in the European market. In this situation, the Norwegian spring spawning herring stock is clearly growing, and in about 1987 - 88 we shall have a marked increase in the spawning stock. This provides the basis for a considerably greater harvest than is now the case. At the same time, there is a wish that the anticipated increase in the catch shall, as far as feasible, be reserved for the use of consumers. Whether the herring shall be used for fish meal or consumption is in the final analysis an economic question. But before an answer can be given to such a question, one must have considerable information concerning the nature of the market. We must know what kind of products can be sold and on which markets. We must know how our competitors plan, the basis for their calculations, and the development of the resources they can harvest. Informatiori concerning the fish products herring com- petes with must be obtained, both as regards price and taste, and how herring competes with other food stuffs. The distribution -7 - • routes must be clarified, so that we know whether we are export- ing to our own competitors or selling to the final consumers. Concentration on the purchasing side will deter- mine how Norwegian exporters ought to organize themselves and so on. Also, the situation relating to Norwegian producers ought to be clarified. Can we produce at the same production costs as our competitors, or is the size of our companies and the distance to the markets a disadvantage? In the build-up of the Norwegian consumer section for herring, there are many unanswered questions.
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