The Russian government is working with seafood retailers and producers to find a way to increase domestic demand for seafood caught in Russia.
Russia has faced an oversupply of seafood since late 2020, when the COVID-19 pandemic led China to drastically reduce its imports of Russian seafood. Prior to this decision, China accounted for 60% of the Russian pollock market.
The closure of the Chinese market has had a dramatic effect on Russian seafood exports. China has been overtaken by South Korea as Russia’s main seafood export destination, and authorities and Russian fishing companies have launched a global pollock marketing campaign called “The Russian Fish”.
Russia’s domestic consumption of pollock is low — usually no more than 130,000 metric tons — and consumption has been falling for years, Fisheries Union chairman Alexander Panin told the Regnum news agency. Russia’s per capita seafood consumption was 20 kilograms in 2020, but Panin said the calculation was based on the volume of raw materials sold, not sales. Panin said he estimated per capita consumption to be just 13 kilograms and that figure had fallen by 27% over the past seven years.
The results for 2021 will likely be even less promising, according to Panin. While the value of seafood sales in Russia increased, the volume decreased in the first half of 2021 compared to 2020, according to a survey by GfK Rus. Seafood prices increased by 8.9% in the first half of 2021 compared to 2020, reaching 313 RUB (4.21 USD, 3.74 EUR) per kilogram, but the volume of sales per customer fell by 3 .2% and total sales of 2.5%.
In the first half of 2021, Russian seafood started to issue warnings that wholesale prices would likely increase by 15% in the second half of 2021 due to rising raw material, packaging and logistics costs. Norebo Deputy Director of International Affairs and Public Relations Sergey Sennikov said that the cost of fishing and vessel maintenance have also become expensive, according to Kommersant.
The Russian Federal Fisheries Agency has attempted to increase domestic consumption and relieve the glut of pollock through the purchase of thousands of metric tons by the state government. However, the Russian Fishery Company’s first deputy general manager, Savely Karpukhin, said government purchases will cover less than a third of the surplus. He said state purchasing programs would be more effective if they regularly purchased larger volumes of up to 100,000 MT.
Sennikov proposed that the state buy more fish for schools across the country, which would both help offset the large supply and encourage seafood consumption at an early age. Chairman of the Primorye Fisheries Association, Georgiy Martynov, in an interview with Fishnews, estimated that the eventual needs of state institutions could reach 700,000 MT – if the government pushes for larger domestic purchases of fruit of sea.
Cost has long been a barrier to growing Russian seafood consumption, hampering past efforts to increase domestic consumption. However, cost increases across all food categories in 2021 appear to be hurting the cause even more. Until November 20, consumer prices rose overall by 8% in Russia. According to government statistics, the main driver of this inflation was food. Food cost increased 10.58% year-on-year, with staples like cabbage up 87% year-on-year, potatoes 74%, cucumbers 60% and 58% tomatoes.
Seafood has so far avoided dramatic price increases, but the rising cost of other staples may keep customers from splurging on seafood.
Russians also seem to prefer red meat and chicken over seafood. In 2021, research firm Platform conducted a survey of urban Russians regarding their seafood consumption. Of those surveyed, only 37% said eat fish at least once a week, with most preferring chicken and meat as a source of protein. However, the survey also revealed that 80% of respondents believed that eating fish was good for health and that children should eat fish to lead a healthy life.
“There are many more people who would like to buy fish than now,” the platform’s managing director, Mariya Makusheva, told the Fishnews news agency. However, she says, the biggest stumbling block is price, which was mentioned as an inhibiting factor by more than 70% of respondents.
Retailers are also trying to sell more seafood. Sergey Ermolaev, fresh food category manager at retail chain Magnit, said in a speech at WorldFood Moscow 2021 that his company wants to increase sales in the segment. offering more high-quality products and selling seafood under the chain’s private label – a move that will require direct contracts with processors.
“This will allow us to control prices and mitigate seasonal cost increases,” he told the Retail.ru news agency. Magnit has also focused on selling semi-finished or ready-to-eat products to save consumers time.
Yulia Galieva, fresh food category manager at Russian retailer Komandor, told Retail.ru that the company has also started making semi-finished seafood products in its stores. The category’s sales increased by 14% in 2021, and the best sellers were store-grilled mackerel, herring and perch.
Panin said he expects the industry to shift to more prepared products, to serve consumers who prefer convenience and avoid having to handle raw fish.
“In a few years, consumers won’t want to waste time even on the net. They want semi-finished or ready-to-eat products, with sauces, special additions and flavors,” he said. However, Panin said value-added production capabilities are currently limited in Russia.
Seeking to meet the growing demand for prepared fish products, Russian Fishery Company and others are working to increase their value-added processing capabilities. The supertrawlers planned by RFC are intended to be more modern, with greater production capacity for processed products such as surimi and fillets.
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