Seafood brand replaces heritage range following comprehensive market and business model review
Review complete value chain
The UK arm of a multinational seafood group was built on the back of sales of wild salmon, but revenue from the species had been declining for several years and profits were volatile. Even though most sales were now of other species, the brand was still synonymous with wild salmon, so management was reluctant to withdraw the range.
We were asked to review the complete value chain from harvest to consumer, and to propose alternative business models.
Understand supply and demand drivers
After thoroughly debriefing management and analysing the historical performance of the range, we focused on understanding consumer demand. This included meeting the category buyer at each major UK retailer and an in-depth review of the product category and substitute categories.
Next, we focused on the supply chain, meeting with each of the primary processors to discuss price drivers and the potential to align their interests more closely with our client’s. Noting the power of the processors and the volatility of raw material pricing, we researched price drivers in more detail as well as alternative supply chain solutions.
Introduce higher margin range, but protect shelf space in the meantime
We identified a number of alternative business models for the heritage range. Unfortunately, each model had issues as well as economic benefits. Therefore, our recommendation to the client was to gradually replace the existing range with more differentiated, higher margin products.
Since the substitute products were still in development, it was imperative that the client protected the shelf space in the meantime. So, we also recommended that the client continued to invest in the heritage range in the near term.
Today, the heritage range is only stocked in a limited number of outlets but category sales per square foot are up.