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Exploring the Potential of Norwegian Salmon Exports to South Africa

Salmonids Sustainability Economics +5 more

In a new research project Nofima will investigate the possibilities for increased export of salmon to South Africa, write Morten Heide, Finn-Arne Egeness, Geir Sogn-Grundvg and Pirjo Honkanen, Nofima.

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Africa south of the Sahara is one of the regions of the world that is experiencing rapid economic growth. The economic development means that a growing number of consumers have the purchasing power required to choose Norwegian seafood.

For this reason, Nofima has been commissioned by the Norwegian Seafood Research Fund (FHF) to examine the possibilities for increased export of Norwegian salmon to South Africa.


The objective of the project is to obtain reliable and industry-relevant knowledge about the South African seafood market. The project is to provide the aquaculture industry with knowledge that can contribute to Norwegian salmon continuing to increase its share of the South African market, while at the same time establishing and maintaining a favourable situation for industrial competition.

This is to be achieved by analysing international trade statistics, mapping and analysing central value chains for fresh and frozen salmon in South Africa, and identifying important marketing criteria and differentiation opportunities in these value chains.

This knowledge will lead to strategic recommendations for Norwegian stake-holders who act in the market or who are considering establishing themselves in South Africa.

Norwegian export to South Africa

The ambition of the Norwegian salmon industry is to grow. The development of new and established markets is vital to increase the demand for Norwegian salmon and to ensure that the price remains high.

Markets with high purchasing power are particularly interesting in this context. South Africa is one such market, in which the demand for Norwegian salmon has increased dramatically in line with the positive economic development in the country.

Norwegian companies exported 3,000 tonnes of fresh Norwegian salmon to South Africa in 2012, which was twice the figure for 2011 and six times the figure for 2006. A further 1,000 tonnes of frozen salmon was exported to South Africa in 2012, considerably higher than previous years.

The import of fresh salmon from Norway increased rapidly until 2007 (Norwegian Seafood Council, 2008).

The Norwegian Seafood Council has shown that most of the fresh salmon was destined for restaurants in 2007 (1,100 tonnes of fresh salmon). South Africa experienced also a pronounced trend for sushi, but there is evidence that this declined after a peak in 2007/2008, following the establishment of several disreputable operators in the market. This will be investigated in the proposed project.

The development of GNP per inhabitant in South Africa has been positive during the most recent decade, and amounted to USD 7,500 in 2012. The GNP per inhabitant of South Africa is high when compared with those of other countries in Africa. Thus, the country appears to be an extremely attractive market for Norwegian salmon.

The average disposable income increased in South Africa by 60% between 2009 and 2012. This has led to an increase in general consumption. One example is the “black middle class”, in which consumption has more than doubled during the past 10 years.

Even so, the purchasing power of the average South African is relatively low, when compared with European consumers. In 2012, for example, each South African used an average of only USD 872 for food, which constitutes 20% of total consumer expenditure (René and Balde, 2013).

Each Frenchman, for comparison, used USD 3,037 on food. France is the largest market for Norwegian salmon, where only 13% of the consumer expenditure is used for food (USDA, 2013).

Fresh salmon is transported by air to South Africa, due to its long distance from Norway. Air freight is expensive (NOK 13-14 per kilo), and this causes the market price to be high. This means that some segments of the South African market have a considerable ability and willingness to pay for Norwegian salmon.

The consumption of seafood in South Africa is, however, low. Experience from other markets has shown that it is a general trend that consumption of seafood increases as income increases. This appears to be the case also in South Africa (Norwegian Seafood Council, 2008): the Gauteng province (Johannesburg/Pretoria) is the area of South Africa that has both the highest purchasing power and the highest consumption of seafood. The Gauteng province and Cape Town are probably the areas of South Africa with the greatest potential for Norwegian salmon.

Earlier marketing reports from South Africa suggest that the consumption of seafood [I added “of seafood”] is seasonal, where the consumption is highest during the summer (November and December.) There is thus a potential to develop the market not only in terms of quantity, but also in terms of lengthening the season.


Norwegian fresh salmon appears to dominate the South African market, and had 82% of imports by volume in 2007 (Norwegian Seafood Council, 2008). The largest competitors are Great Britain and Chile. These two countries achieved approximately the same prices as Norwegian salmon in 2007. The price for Norwegian frozen salmon was considerably higher than that achieved by the same competitors.

How has the situation developed after 2007? A market that is growing should be attractive to exporters in other salmon-producing countries such as Scotland, Denmark (processing), the Faroe Islands and Chile.

There are little knowledge about how the competition from various supplier countries has developed since 2007 in terms of such parameters as volume, price, and types of product. Another central question that the project is to examine concerns the price sensitivity of the market and its relationship to an increase in volume. Such knowledge is important since the air freight contributes to fresh salmon having a relatively high market price.

Other purchasing criteria than price will also be analysed during the project.


South Africa has a well-developed infrastructure with several large supermarket chains. However, there is currently little known about whether fresh salmon still goes to restaurants after the import has more than tripled. There is also a need for more knowledge about how fresh salmon is presented in restaurants and stores. Which attributes (origin, quality, environmental issues, health, etc.) of the products should be emphasised?

Another important question concerns the development of the sushi market – has its growth stopped, or has it developed in such a way that it can absorb more Norwegian salmon?

Uses of salmon

Consultation with Norwegian exporters has suggested that salmon is popular for barbecuing, and that salmon can probably be used in many of the same areas as tuna.

An interesting question in this context is the extent to which salmon products are available and suitable for barbecuing. Another question is whether attempts have been made to convey how suitable salmon is for barbecuing.

Norwegian exporters have informed us that frozen whole salmon is primarily used in local smokehouses. The segments that pay the highest prices, however, purchase smoked salmon directly from Europe, since it is reputed to have higher quality.

It should be investigated whether there are other distribution channels for frozen salmon in South Africa. There are also very limited knowledge about the degree to which frozen salmon products are presented in the supermarkets, nor do we know the product attributes that are emphasised, or pricing. Market surveys will provide the answers to these questions.

The strong growth in the import of fresh Norwegian salmon at high prices, combined with strong economic growth in South Africa, mean that increased knowledge of this market will be highly important for Norwegian actors on the market, including salmon producers, salmon exporters, and the Norwegian Seafood Council.

The project will provide increased market knowledge that will be important in understanding the opportunities for both fresh and frozen salmon products, such that it will be possible for Norwegian salmon to grow further on the South African market. This knowledge will also be important in understanding how Norwegian salmon can and should be positioned and differentiated in order to achieve a sustainable competitative position.

The project will be led by Nofima. The University of Stavanger and the University of the Western Cape in South Africa are also involved.

A reference group has been established with representatives from Norwegian industry. The Norwegian Seafood Council and the Norwegian Seafood Research Fund (FHF) are observers in the steering group, while the Norwegian Seafood Council is also contributing international trade statistics to the project.

February 2014