Carey Bonnell
Chair
SVCRT Marketing Alliance Working Group
October, 2013
Mandate
 To develop a proposal for creation of a national
seafood marketing alliance for the SVCRT’s
consideration.
 The proposal will include:
 Proposed mandate
 Governance/structure
 Funding model options
 Value proposition to industry
 Challenges/impediments to overcome
 Other items as required
Will Joint Marketing Work?
 It depends …
 Can industry focus on commonalities of interest, rather than
differences, and speak with unity of purpose?
 Can a program be designed and implemented that industry will
support?

Does the industry see enough potential benefits to support program design and
development and give it enough time to show benefits?
 Sackton: Why Seafood Branding Matters
 “Consumer perceptions of seafood – both positive and negative –
depend heavily on the origin of the product”
 “In short, there is a premium that buyers pay for a consistent quality
seafood brand”
 “Few corporate brands have achieved the power of the geographic
brands”
 “This is because the particular fish stocks, management, and
harvesting and processing all depend on a geographic area”
Benchmarks
 Successful programs in Alaska, Norway
 Can we duplicate in Canada?
 Agricultural models in Canada
 Beef is most advanced
Alaska Seafood Marketing Institute (ASMI)
Mandate
 Increasing positive awareness
 Collaborative marketing
programs
 Championing the sustainability
of Alaska seafood
 Proactive marketing planning
 Quality assurance, technical
industry analysis, education,
advocacy and research
 Prudent, efficient fiscal
management
Structure
 Public-private partnership
between the State of Alaska and
the Alaska seafood industry
 7 member board appointed by
governor
 Levy of $0.5% based on landed
value of fish purchases
 Industry increased from 0.3 to .5 in
2004
 $25 million budget in 2013 secured
through industry, federal and state
funds
ASMI (Financial Information)
Norwegian Seafood Council (NSC)
Mandate
Structure
 Joint marketing
 Market information
 Communication and
 Public company owned by
reputational risk
management
gov.
 Two year board appointments
with 6 directors
 5 advisory marketing groups
 Norwegian Salmon and
 NSC leads 500 marketing projects
per year in 25 different countries
all aimed at increasing demand for
Norway Seafood
 Marketing is founded on its
competencies within consumer
analyses, international marketing,
brand establishment, new media
and PR




Norwegian Fjord Trout
Ground fish (Cod, Saithe,
Haddock etc.)
Prawns and shellfish
Conventional products (Salted
fish, Clip fish and Stock fish)
Pelagic products (Herring,
Mackerel and Capelin)
NSC Value
 Formed in 1991 to rationalize highly subsidized industry
 Financed by industry through fees levied on all exports of Norwegian
seafood

0.75% on all types of fish and 0.20% on processed products
 Sector investments include:
 Salmon / Trout – 58%
 Pelagic – 18%
 Whitefish – 11%
 Clip fish, salt fish, stock fish – 11%
 Prawns / Shellfish – 2%
 NSC had a total budget of NOK 414 million (approximately $72 million
CAN) in 2012 to invest in its strategic areas
 Export value increased from $15 billion NOK in 1991 to $53 billion ($9.2
billion CAN) in 2011
 Key improvements in strategic markets i.e. Singapore & Spain
ASMI & NSC Summary
 General feeling that ASMI & NSC are providing value for money
 Levy based system funded largely by industry


ASMI - $0.5% - $25 million budget
NSC - $0.75% ($0.25% processed) - $72 million budget
 Public funds leveraged by industry levy
 Neither body received initial support from industry but are now
highly valued
 Models focused around branding, promotion, intelligence,
awareness and communication (no direct sales!!)
 Both jurisdictions have strong brand recognition
Canada
 Fed/prov investment of $5-$5.5 million annually
 Add industry equity in range of 25%
 Initiatives are generally sector specific i.e. shell on shrimp,
Atlantic lobster, etc.
 Not always coordinated
 General sense that Canadian focus is on selling vs. marketing
 There are exceptions
 No one body structured to take on role similar to ASMI or NSC
 Sector bodies are generally underfunded to lead this
 Public funding limited compared to other sectors (i.e. agri-food)
and other jurisdictions (US, Norway, etc.)
Jurisdiction Comparisons (2010 data)
Jurisdiction
Landings
(mt)*
Export Value
($)**
Estimated
Marketing $’s
Canada
1,088,546
$3.9 billion
$7-8 million (TBC)
Norway
3,683,302
$9.4 billion
$72 million
Alaska
1,971,990
$2.5 billion
$25 million
• *Landings based on 2010 FAO statistics for CAN & NOR & NOAA statistics for
Alaska
• ** Export data based on 2010 statistics
• In terms of trends
• NOR seafood exports grown from about $2.5 billion in 1991 to $9.4
billion in 2010
• Alaska seafood exports grown from $1.2 billion in 1998 to $3.1 billion in
2011
• Canadian seafood export value has not increased substantially over the
past 10 years
Seafood Export Trends ($)
10,000,000,000
9,000,000,000
8,000,000,000
7,000,000,000
6,000,000,000
5,000,000,000
4,000,000,000
3,000,000,000
2,000,000,000
1,000,000,000
0
Canada
Norway
Alaska
Seafood Landings Trends (MT)
4,000,000
3,500,000
3,000,000
2,500,000
Norway
2,000,000
Canada
1,500,000
Alaska
1,000,000
500,000
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
0
Cranfield re Canadian Beef Levy
 Canadian cattle producers gain net economic benefits
from investment in marketing and research activities.
 … between 2005 and 2008 the BCR associated with the
investment of producer check‐off dollars in marketing
and research activities grew from 7:1 to 11:1, with an
average BCR of 9:1 over this time period.
 This means that on average from 2005 to 2008,
every check‐off dollar invested in marketing and
research activities earned $9 for Canadian cattle
producers.
MAWG: Key Questions
 Are there sufficient commonalities of interest to justify an

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industry-wide initiative?
What does the industry need to achieve that can best be
done through a joint initiative?
How can an industry-wide initiative create value for
individual participants?
What value proposition will attract industry support?
How can a joint marketing initiative be designed,
organized, and implemented?
How should a levy on industry to fund the effort be
calculated and collected?
Commonalities
 Both the capture fishery and aquaculture are
underperforming relative to their potential
 Seafood exports have not increased over past 10 years
 Substantial change is needed for both industries to
achieve their potential
 Gislason: “Canada will never be a low-cost producer of
seafood on the world stage … Our potential advantage
lies in high quality, high value niche seafood products
 Opportunities and needs differ by sector but there are
areas of overlap
Commonalities
 Opportunities
 Global demand for seafood is growing; Canadian production is not
 We are a small player in the global seafood market; we need to identify
market niches in which we have advantages
 The pending free-trade agreement with EU should open up new
opportunities
 Developing countries are seeing significant growth in their middle
classes, willing and able to pay more for higher quality products
 Canada as country of origin



Good international image linked to product quality but more associated with
maple syrup than seafood, unlike AK, NO – need to generate awareness
International buyers don’t recognize individual provinces
Canada brand can provide umbrella effect for company brands
 Canada has extensive coastlines, freshwater lakes and rivers that
provide opportunities to increase output
 Climate change is changing abundance and distribution of species,
threatening existing activity but offering new potential
Commonalities
 Threats
 Competition is increasing faster than consumption in
our traditional markets and we are losing share
 Competitors are focused outwardly on opportunities
and better coordinate their effort
 We are focused inwardly on problems and our industry
is highly fragmented, making cooperation difficult – we
need to change the conversation
 We have challenges entering new markets
Commonalities
 Challenges
 Capture fisheries – changing market requirements, excess
capacity, dysfunctional value chains, poor financial returns
 Aquaculture – inability to expand production, attacks from
ENGOs, inadequate regulatory framework
 Neither sector well-positioned to take advantage of
opportunities
 Government looking to industry for leadership, solutions
 Little/no progress in addressing issues, due to conflict among
factions
Rationale for A Joint Initiative
 Sackton: geographic brands are more powerful than corporate brands
 Canada brand can provide an umbrella for corporate brands
 Many qualities that can be levered
 More recognized than provinces
 Enforcement of regulations a distinguishing feature
 In marketing, mass is important; more money = more mass
 When there is a problem, all seafood products are affected – capture,
aquaculture, imports, exports
 Common issues, often complex – e.g. seal hunt, disease, trawling


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Difficult for individual companies to deal with
FCC, CAIA resources are limited
Now depend heavily on NFI for crisis management
Companies now spending a lot of money on these issues in other ways
 Need to find ways to work together on issues – progress here may help
with others
What would Canadian Levy System
look Like
Norway Model
Alaska Model
 Using NSC model of levy
 Using ASMI model of levy
against export value:
against landed value:
 0.5% levy = $20.5 million
 0.5% levy = $15 million
 0.3% levy = $12.3 million
 0.3% levy = $9 million
 0.75% levy = $30.8 million
 0.75% levy = $22.5 million
 Canadian Seafood exports in
2012 = $4.1 billion
 Canadian Seafood Landed
Value in 2011 = $3 billion
• Additional leverage from federal & provincial sources
• Would have to be government legislated & industry driven
• Would be ‘revolutionary’ change for Canadian seafood industry
Notional Mandate for Canadian
Seafood Council (CSC)
 Collaborative Marketing with emphasis on improved



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coordination leading to increased efficiency, awareness
and demand
Market Intelligence to ensure proactive planning,
research & analysis
Communication & Image Management of Canadian
seafood
Promoting Sustainable Seafood in Canada
Facilitating improvements throughout Seafood Value
Chain to improve market performance
 Quality, traceability, sustainability, etc.
Question – Despite all of the challenges identified
is there still value in creating an organization focused on the above?
Potential for Value Creation
 Improve market intelligence
 Develop new markets, niches
 Differentiate Canada as seafood supplier
 Canada brand helps everyone
 Umbrella for company marketing
 Common issues companies can’t deal with
 Crisis management
 Economies of scale through joint effort
 Sustained effort over time
Value Proposition for Industry
 Focus on marketing and competitiveness
 Greater marketing “presence” through increased spending,

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sustained effort
Show better value from joint spending than company spending
Leverage from government support
Consumers must see value – sustainability, quality, traceability
Differentiate Canada as source of high-quality seafood
 Reputational risk management
 Common issues companies can’t deal with
 Umbrella for company brands
 Different components to reflect industry diversity – species focus
or market focus?
 Fairness – who benefits, who pays?
 Menu of services to choose from?
Where Do We Go From Here?