The competition is coming primarily from dried and salted fish torn into smaller pieces and from frozen desalted bacalhau. The import of such products is increasing more than the increase of Norwegian bacalhau.
This has reduced the market share of Norwegian bacalhau over the last five years from 86 per cent to 61 per cent.
Norwegian companies export dried and salted fish of saithe, cod, ling and cusk to Brazil. Bacalhau of saithe and cod are the largest products measured in value.
The new products that have been introduced onto the Brazilian market have various advantages and are threatening various segments of the Norwegian bacalhau export.
Frozen rehydrated cod
The Portuguese are the largest producers of desalted bacalhau. This product is a convenient alternative to full salted bacalhau of cod. In 2011 Brazilian consumers purchased around 4500 tonnes of frozen desalted cod. That is equivalent to 10 per cent of the total bacalhau market. If you look exclusively at the category bacalhau of cod, frozen desalted products account for 20-25 per cent of the market.
Norwegian companies need to take this seriously. Convenience is the main explanation for this strong market change. Frozen desalted fish can be prepared after being thawed, meaning consumers dont have to plan the meal several days in advance, says Scientist Finn-Arne Egeness at the food research institute Nofima.
Egeness, along with other scientists from Nofima, has studied the Brazilian market over a period of several years.
The results of consumer surveys show that many people find desalting time-consuming. Using desalted fish makes it easier to cook a meal and explains the rapid market growth. The Brazilians like to invite their families and friends for a dinner of bacalhau. In order to have the best flavour, it is extra important that the bacalhau has the right salt content. Buying desalted fish increases the probability of a successful meal, says Egeness.
Frozen desalted cod is expensive in Brazil. At the supermarket chain Zona Sul in Rio de Janeiro, frozen rehydrated bacalhau loins costs NOK 195 (BRL 65) per kilo.
In comparison dried and salted cod loins cost NOK 150 (BRL 50) per kilo. If we take into account the fact that dried and salted fish increases in weight after desalting, the true price difference is actually a full NOK 80 (BRL 27).
Consequently, this product category is growing despite the higher price. This emphasizes the fact that the target market for frozen desalted products is the richest consumers, and that the willingness to pay is higher than for the traditional Norwegian dried and salted fish, says Egeness.
Chinese-produced salted Alaska pollock in smaller pieces has become a common sight in Brazilian supermarkets. The Brazilian supermarket chains that Nofima has spoken to say that Alaska pollock is an alternative to bacalhau of saithe. We often found saithe and Alaska pollock displayed side by side on the supermarket shelves.
A consumer study Nofima carried out in Brazil in 2008 implied that bacalhau of saithe has several limitations, primarily relating to dark colour, lack of thickness of the fish and a fibrous consistency of the meat.
As a result, the consumers believed that the saithe was better suited to bacalhau balls, known as bolinhos, and casseroles than portions. Skin and bones meant that bacalhau of saithe was regarded as time-consuming to prepare.
The advantages of the saithe were taste and price. The flavour was described as rich, while its low price meant the product was affordable to a greater proportion of the population.
Price is important for consumers of salted Alaska pollock. Price examples from Recife in Northeast Brazil showed that Alaska pollock sold in smaller pieces cost NOK 45 per kilo, while saithe cost NOK 51. The price difference was further strengthened by the fact that pollock was packaged in smaller packs.
The middle class eats bacalhau on festive and special occasions such as Christmas and Easter. Cheaper and more convenient alternatives give them the opportunity to eat dried and salted fish on a more regular basis. Many consumers think its hard to cut and tear bacalhau into smaller pieces so the Chinese products are easier to use, says Egeness.
Alaska pollock also has a lighter colour, which becomes extremely clear when they are placed alongside each other at the supermarket. Consequently, this fish has several advantages when compared with bacalhau of saithe.
The new products are here to stay and they have become a convenient alternative to dried and salted fish from Norway, says Egeness.
This means Norwegian companies need to have a conscious position in relation to positioning of existing products and assess whether they will produce frozen desalted products. They also need to work to ensure the consumers choose bacalhau of saithe in preference to Alaska pollock enough times in the space of a year.
This article is based on a research project financed by the Norwegian Seafood Research Fund, the Norwegian Fishermens Sales Organization, Nordea and the Norwegian Seafood Council.