Re-think can give competitive edge
Over the last five to six years, Irish salmon have achieved significantly higher average export prices than Norwegian salmon.
In 2006-2007 the Irish salmon farmers experienced price increases, while their counterparts in Norway, Scotland and the Faroe Islands all experienced a price reduction.
During the same period, Irish salmon farmers struggled with diseases, high production costs and reduced exports.
What have the Irish salmon farmers done to achieve such high prices for their products?
To answer this question, scientists from Nofima and FaroeIsland’s Havsbrún have tried to uncover any strategies and product attributes the Irish salmon producers have concentrated on.
Irish salmon fetches higher prices
Until 2001, there were only slight price differences between the major salmon-producing nations, but since then, Ireland, in contrast to the other countries, has managed to achieve both higher and rising prices.
Senior Scientist Geir Sogn-Grundvåg at Nofima Market explains.
"Problems with diseases and higher production costs have forced the Irish to go in new directions otherwise the majority would now be bankrupt," says Sogn-Grundvåg.
"They have had a strong focus on organic production and branding strategies. The Irish were quick to find markets where organic food is appreciated by customer groups. Being the first to enter a market provides advantages because it generates more attention and is perceived as more positive than others who follow," explains Sogn-Grundvåg.
A loyal domestic market and strong brands to customers in Great Britain and Germany in particular have enabled the Irish producers to maintain relatively stable sales.
The conditions for salmon farming are not as favourable in Ireland as, for example, in Norway, something which results in leaner fish being slaughtered at a smaller size than is common in Norway.
Even though this means higher production costs, it looks like the Irish have managed to take advantage of this in their marketing by creating a niche market that is willing to pay a higher price for a unique product.
Concentrating on organic salmon is probably the main reason Irish farmers have achieved good prices.
The Irish sales organisation ISGA, which sells half the total Irish farmed salmon, says that by 2009 all producers selling through the organisation must supply organic salmon.
Irish salmon is the first in the world to be marked with the "ECO-label".
Organic certification relies on the fish being raised in specific conditions, which places demands on the production process rather than the actual product.
Consumers want to know increasingly more about the product’s origins and growth conditions so producers can to an increasing degree profit by telling the story about the product’s origins and creation.
…but are they earning money?
The study says little about whether high prices in the market translate into any higher profits.
The scientists have not had access to information about production costs and other expenses connected with the change in production.
"The remaining Irish salmon producers are alive and seemingly doing well, which indicates what they are doing pays off in the long term," says Sogn-Grundvåg.