Rules of the Game Change in Spanish Seafood Sector

28th September 2020

Roisin O´Sullivan, Market Specialist Spain, Bord Bia - The Irish Food Board

The Spanish seafood sector had been performing well over the last couple of years as discussed in an Alimarket report on the frozen seafood sector published this June, but in March of this year the “rules of the game changed”. The state of alarm enforced due to the pandemic caused the closure of the horeca canal which is of vital importance to the frozen seafood market. Most operators have 50% of their business or more in supplying horeca, directly or indirectly (via wholesalers). As a result, prices fell, demand fell and as the channel barely started to recover over the summer months - financial buffers were needed to help many companies withstand the loss.

Faced with this new and unexpected scenario, the report states that the most used words by the industry over the past couple of months are: uncertainty and retail. According to some of the key industry players the original strategy for the last couple of years for many companies was to strengthen and enhance activity in foodservice, a channel where you could defend better margins, with potential to grow and where there is no pressure on the prices set by retail chains. However - Post Covid almost all Spanish operators have agreed that they will try to boost their lines for hypermarkets and supermarkets in some way to match demand for more retail focused product

Pescanova, the leading seafood player in Spain, aware of the economic uncertainty due to Covid,

is adapting to this new reality and innovating their ranges with the aim of continuing to facilitate the consumption of healthy seafood products. They have added a new range of seafood ready meals and also added new reduced and more affordable formats to its existing product range. Under the slogan "We are in the same boat", with this initiative the company aims to reinforce its commitment to the Spanish population to facilitate access to nutritious, healthy, innovative and responsibly produced seafood.

The management in Nueva Pescanova noted that Post Covid "we are facing a consumer who will probably have less money, who has discovered the online shopping format and who remains concerned about health". Consumers are looking for more convenient meal options. The focus will be on value added product. Manufacturers should start to think about how to add value to their core products – filleted, further processed, ready to eat, pre-packed product, offering higher added value and differentiation.