Sector Trend Analysis – Fish and seafood trends in the United Kingdom

Production and consumer trends

Total aquaculture production in the UK reached 222,249 tonnes in 2017 (Eurostat, 2019). Raising greater awareness and leading healthier lives helps drive growth in the production & increased consumer consumption for fresh food. In addition, desire for transparency drives demand for the availability of ethically-sourced food. E-commerce in the UK is gaining ground but supermarkets remain the main distribution channel of food. Uncertainty around the Brexit referendum, remains the major challenge facing the fresh food market in the UK (Euromonitor, 2020)

In recent years, there has been a shift towards more meat-free diets or vegetarianism and veganism. These consumer trends are driven by its perceived health benefits, as well as, by ethical and animal welfare concerns.

Even though salmon remains the most popular fish in the UK, consumption is falling. Instead, there has been a rise in the volume of sales of shrimp, which is seen as a lower-priced alternative source of protein.

Despite the grim outlook regarding increasing prices, fish and seafood production and sales in the UK, do benefit from the growing demand for protein-rich diets. European consumers in the UK have become more familiar with the health benefits associated with eating fresh fish and seafood, especially oily fish such as sardines, mackerel and salmon.

Trade overview and Canadian performance

The UK is a net importer of fish and fish products, importing US$4.7 billion in 2019. In the same year, total exports of fish and fish products were worth US$2.7 billion. UK per capita consumption of live fish and seafood was 22.9 kg in 2017 (The EU Fish Market, 2019).

The UK was the tenth-largest fish and seafood import market in the world (3.1% market share) and the 6th largest fish and seafood importer among the E.U. UK imports grew at a CAGR of 2.2% from 2015 to 2019. Canada ranked as the 15th largest import market from the UK and grew at a CAGR of 4.3% with a market share of 2.1%. The top three countries were the U.S., China, and Japan, accounting for a combined total of 37.3% of the global market share (value) in 2019.

In terms of volume, in 2019, the UK ranked as the 12th largest market in the world (2.4% market share) with a CAGR of 2.3% (2015-2019). Canada ranked 20th in the world (1.5% market share) with a CAGR of 1.6% from 2015 to 2019. The top three countries were China, the U.S., and Japan, which accounted for 30.9% of the global market share (volume) in 2019.

In terms of value, from 2015 to 2019, Iceland and China were the top suppliers of fish and seafood to the UK with a market share of 8.9% and 7.8%, respectively. Canada was the 15th largest supplier with US$101.1 million, at a market share of 2.1%. Despite, the Canada-EU Comprehensive Economic and Trade Agreement (CETA) enforced in 2017, the value of Canadian fish and seafood exports to the EU has decreased continuously since 2016. Nevertheless, CETA was expected to help fill key EU opportunitiesand consequently most of the tariffs will be eliminated gradually within three, five, or seven years (Chapter Summaries). UK's fish and seafood imports from Canada have declined by 19.2% from 2015 to 2019.

Local competition from northern European suppliers continue to affect Canadian supply. Another key factor for the higher import prices and tight supplies within the UK, is due to the result of the "British exit" (Brexit) referendum. The decision made by the UK on June 23, 2016 to leave the EU led to a 20% devaluation of the Great Britain Pound (£GBP), thereby affecting the exchange rate and making imports more expensive.

In addition, Canada's department of fisheries and oceans (DFO) announcement to introduce a quota for the 2017/18 fishing season of coldwater shrimp, one of the country's key exports to the UK, has also impacted the industry. The introduction of this total allowable catch (TAC) quota for northern shrimp fishing, is said to result in a dramatic fall in biomass by 25%, cutting the TAC quota in key fishing area six by 62% year-on-year, to 10,400 metric tons (DFO Announces).

In terms of volume, from 2015 to 2019, Norway and China were the top suppliers of fish and seafood to the UK, growing at a CAGR of 22.2% and 3.8%, respectively (market share of 10.5% and 8.8% in 2019). Canada was the 26th largest supplier with 7,939 tonnes, at a market share of 0.9%. UK's imports from Canada declined by 19.6% from 2015 to 2019.

Frozen fillets of cod and fresh/chilled Atlantic salmon and Danube salmon were the top two products that UK imported from the world. These two products grew at a CAGR of 7.1% and 15.2%, respectively from 2015 to 2019. Canada either did not produce some of the top 10 products or had smaller exports in five of the top ten products.

Canada also exported some other products besides the five exports above. In 2019, top two Canada's fish and seafood exports to UK were prepared or preserved shrimps and prawns and lobsters, live, fresh or chilled. Total fish and seafood exports to UK decreased at a CAGR of 19.2% from 2015 to 2019.

In 2019, Canada exported US$101.3 million of fish and seafood to the UK. British Columbia was the largest Canadian province, accounting for US$38.8 million, followed by Nova Scotia at US$32.0 million. The UK market is very important for Canada's fish and seafood exports, particularly for salmon, lobsters, shrimp and prawns. However, due to COVID-19, total Canadian exports declined from US$18.7 (January to April, 2019) to US$11.7 (January to April, 2020), adding to the negative CAGR growth of −9.2% between 2015 and 2019.

Canadian provinces' fish and seafood exports to the United Kingdom

British Columbia exported mainly salmon to the UK, accounting for 88.3% of its total fish and seafood exports to the UK in 2019. All top four fish and seafood exports listed in the below table have been growing positively for the past five years.

Nearly half of Nova Scotia's fish and seafood exports to UK are lobsters, which accounted for 45.9% of its total fish and seafood exports in 2019. Its top four exports have been declining for the past five years.

Prepared or preserved shrimps and prawns come from Newfoundland and Labrador and are their main exports to the UK, accounting for 67.5% of its total fish and seafood exports to UK. Frozen scallops and prepared/preserved lobsters grew positively, while frozen cold-water shrimps & prawns, prepared/ preserved shrimps & prawns, and frozen fish meat exports declined over the past five years.

Over 91.5% of New Brunswick's fish and seafood exports to the UK were prepared/preserved, frozen, and live/fresh or chilled lobsters at a value of US$5.1 million in 2019. Prepared and preserved lobster was the top export commodity and grew at a CAGR of 64.7% from 2015 to 2019. However, from January to April, 2020, the only fish and seafood commodities that New Brunswick exported to the UK were shrimps and prawns at US$0.3 million.

Over 99.5% of Prince Edward Island's fish and seafood exports to the UK were live/fresh/chilled and frozen lobsters at US$1.8 million in 2019. Notably, from January to April, 2020, no fish and seafood products were exported to the UK.

About 78.8% of Quebec's fish and seafood exports to the UK were prepared/preserved, frozen or live/fresh or chilled lobsters at a total value of US$318,194 in 2019.. However from January to April, 2020, Quebec only exported flours, meals and pellets of fish or crustaceans, molluscs and agar-agar to the UK.

Opportunities

The UK market is still a very important market for Canada, despite the challenges during COVID-19. One example of a major marketing initiative in the UK that was developed from the International Cold Water Prawn Forum and is a collaborative initiative from the Royal Greenland and the Association of Seafood Producers within Newfoundland, which includes the Wild Atlantic Prawns interactive Chef Education programme. The founding members have been joined by the Norwegian Seafood Council, Icelandic Export Centre Ltd. and Holmadrangur ehf. It is designed to provide chefs, trainee chefs and those studying hospitality management subjects to an introduction on how to best prepare dishes using wild Atlantic prawns. Further details can be found at wild Atlantic prawns. Additionally more recently, an Atlantic Canada event was held at the seafood school at Billingsgate, which promoted Canadian seafood, to chefs, food writers, bloggers and food journalists.

British Government appointed experts within the fish and seafood industry have formed a working group to aim at doubling fish and seafood consumption by 2040. All officials involved in the 2040 project have recognised that the seafood value chain is on the brink of enormous opportunity and are trying to quantify and know how to measure, just how big this opportunity could become. In essence, they are asking questions like is it possible to achieve Public Health England's advice for each of us to eat at least two portions of seafood a week and whether we can sustain such a demand if possible? Or answer questions like what would be the positive impacts on our health and how can the supply chain evolve to meet this possible growing demand? Their vision is to describe what a thriving industry might look like while fuelling the economic growth within the sector, by doubling the consumption of fish and seafood per person, per week and in return be able to measure the substantial health gains and associated cost savings for the UK, accordingly. To read more see the Seafood 2040 report: A strategic framework for England.

Supporting the United Kingdom's fishing and seafood industry through COVID-19 and beyond

The UK's fishing industry is facing colossal challenges. Three-quarters of seafood caught by the UK's fishing fleet is exported and most of the seafood consumed is imported. With fish markets and the restaurant trade now closed across the country and overseas due to COVID-19, it is vital that fishermen gain help to find local markets, so that they can keep working and to ensure that the British public maintains a vital fresh food supply.

To support the seafood supply chain in the face of widespread COVID-19 disruption, the Fishmongers' Company have introduced two rapid response initiatives.

COVID-19 Rapid Response Grant Programme (RRPG)

The Fishmongers' Company's Fisheries Charitable Trust and Seafarers UK, with a group of trusted partners, have developed a £500,000 COVID-19 Rapid Response Grant Programme (RRGP).

The Rapid Response fund seeks to assist fishing and seafood businesses and food charities by:

• Seeking diversification opportunities for seafood and fisheries businesses
• Promoting the consumption or sale of local seafood
• Providing community meals using seafood

Recognising the need for cooperation among fish merchants, fishers and buyers. Many initiatives are developed to demonstrate collaborative working among stakeholders.

Choosing to eat local seafood helps to build resilience in coastal communities and supports the livelihoods of fishermen and the many people who work across the supply chain, not just during these challenging times, but in the long term (The Fishmongers Company).

Government grant

England's fishermen have been thrown "a lifeline" by the government, with £10 million in cash grants to help them stay afloat amid the coronavirus crisis, as the export markets they rely on have collapsed.

About 1,000 fishing and fish-farming businesses are expected to benefit, with vessels up to 24 metres in length - small to medium-sized boats - which recorded catches worth at least £10,000 last year being eligible for a slice of the main £9 million fund. A further, £1 million will be for schemes to help fishermen sell their catch in their communities.

With the closure of restaurants and with few means of exporting fish, small boats in particular have been stricken financially. The price of fish has also fallen, by as much as 80% in some cases, meaning fishermen struggle to turn a profit even when they can make a sale (The Guardian).

For more information

The Canadian Trade Commissioner Service:

International Trade Commissioners can provide Canadian industry with on-the-ground expertise regarding market potential, current conditions and local business contacts, and are an excellent point of contact for export advice.

• Overviewv of Trade Commissioner Services in the United Kingdom
• Find a Trade Commissioner

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For additional information on the Seafood Expo Global (SEG) 2020 (postponed to 2021 due to COVID-19), please contact:

Ben Berry, Deputy Director
Trade Show Strategy and Delivery
Agriculture and agri-food Canada
ben.berry@canada.ca

More on Canada's agriculture and agri-food sectors:

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Sector Trend Analysis – Fish and seafood trends in the United Kingdom
Global Analysis Report

Prepared by: Hongli Wang, Market Analyst

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