While 2020 presented no shortage of challenges for the seafood sector, increased at-home consumption coupled with consumer demand for healthier options leaves it optimistic for the future.
That's certainly the case at seafood giant Thai Union, the owner of the John West, Chicken of the Sea, and Petit Navire brands among others, which reported a 4.9% increase in sales last year, along with an EBITDA gain of 27.4%.
Ambient seafood sales were a key growth driver, the company said, increasing by 8.8% in the final quarter of the year alone, which offset declines in its frozen and chilled seafood business. The company's pet care/other products business was another strong performer, with sales up 8% in Q4.
Looking ahead, the company sees sustainability as a key pillar of its success, with its global sustainability strategy, SeaChange, setting high standards for the seafood industry, while it has also branched out into novel food tech innovations, including converting tuna bones into a food additive for pet nutrition and a number of developments in alternative proteins.
ESM caught up with Thiraphong Chansiri, Thai Union's president and CEO, to discuss the year just gone, and what the business has in store for the coming 12 months.
ESM: What challenges did Thai Union face as a result of the pandemic?
Thiraphong Chansiri: Obviously, the global pandemic brought unprecedented challenges for every business. However, Thai Union was able to take prompt action at our sites around the world to ensure operations remain uninterrupted.
In Thailand, for example, we are not only focused on maintaining stringent health and safety standards, but have also put in place facilities at our main manufacturing site for employees to acquire essential goods. This has meant our workers can access everything they need for their everyday lives while safely complying with local coronavirus measures.
In the Seychelles, where much of our tuna is processed, we have almost completed the first round of vaccinations for our workers, with the second round ongoing.
Throughout the pandemic, we have continued to support our local communities, recognising that thriving communities are vital for our business and the welfare of our employees. In France, for example, our brands Petit Navire and MerAlliance donated almost 70,000 pieces of PPE to local hospitals.
Meanwhile, across Europe, our brands provided over 100,000 cans of seafood to support those in need during the pandemic.
In our manufacturing bases in Thailand, we were also proud to play an important role in the pandemic response, donating more than 280,000 servings of seafood to local organisations, delivering PPE for 38 schools and providing monetary support for the creation of a COVID-19 field hospital in Samut Sakhon and four hospitals in Songkhla.
Whilst we have naturally been focused on ensuring stability during this unprecedented period, we have also maintained our longer-term growth trajectory, continuing to pursue sustainability goals and expand our investments in innovation.
Thanks to this resilient strategy, the continued commitment of everyone at the business, and the trust consumers around the world have shown in our products; our sales increased by 4.9% year-on-year for 2020.
Has the pandemic given rise to any interesting trends in recent months– for example, are sales of a particular fish or seafood variant growing fast?
We have seen a surge in consumer demand for ambient seafood products as people cooked more at home and pivoted towards healthier, more nutritious diets. Overall, our sales of ambient tuna rose by 14% in 2020.
What was interesting to see was the particularly strong demand for our branded products during the pandemic. This reflects the movement by consumers towards trusted brands at a time of uncertainty. We know this trust takes decades to establish and hope to continue building on this with consumers in the years to come.
We have also experienced a sharp increase in demand for our PetCare products over the past 12 months.
To what degree do you think sustainability will become even more important for consumers once the pandemic subsides?
Obviously, there was a huge focus on ocean health before COVID-19. However, the pandemic has laid bare the full range of fragilities affecting our world, not least the climate crisis and threats to vital ecosystems.
There is a widespread acceptance that the world should not return to old habits of waste, pollution and over-exploitation, and I would expect this to be reflected in continued demand for products with robust sustainability credentials.
At the same time, disruption in what people are able to buy on their supermarket shelves has brought to the fore the supply chains behind everyday products. I believe consumers will be more attentive to where their products come from going forwards and it will be vital for businesses to match this expectation with a comprehensive approach to traceability.
Sustainability is not new for the seafood industry. We rely on a shared resource and without healthy oceans we would not have a business.
At the same time, by restoring marine habitats and ensuring they are responsibly managed, global catches could sustainably increase by 15%, helping the seafood industry meet the world’s growing demand for nutritious food.
Thai Union had already made sustainability a key pillar of our strategy. We have invested in expanding the traceability of our seafood, so we can ensure suppliers meet environmental and labour standards, while giving consumers the ability to track their fish from sea to supermarket shelf.
We have also been working for many years to help bring together stakeholders in key fisheries around the world to identify environmental challenges, develop detailed effective action plans and collaborate on implementation.
It was the combined need to ensure the health of oceans is supported and the increased demand from consumers that motivated us to agree our first sustainability linked loan earlier this year.
Under the agreement, interest rates are tied to our performance on the Dow Jones Sustainability Index, our ability to meet our emissions reduction targets and our efforts to increase electronic monitoring or human observers on vessels in our supply chain.
What role can technology play in enabling Thai Union and other seafood businesses to improve their sustainability credentials?
Technology is a key enabler of traceability, which sits at the heart of all our efforts to improve environmental sustainability and labour practices throughout our supply chain.
Two technologies can be marked out as having significant importance. The first is blockchain technology, which we are already using to support the traceability of our products for retailers in Europe and North America. The immutable record created through blockchain provides an effective way for suppliers to input data and for retailers and consumers alike to verify the origins of a product.
Electronic monitoring or eObservers are another important technology we have been working to expand in our supply chain. Traditionally, a way of assuring compliance with environmental and labour standards on vessels was to have a qualified human observer on board.
However, there are only so many of these observers available and quarantine restrictions have made it even harder for them to join fishing trips. eObserver systems are an alternative. These consist of technical equipment, including video cameras to record on deck activity, sensors on fishing gear to indicate when it is in use and tracking units that record the location of the vessel.
The data we collect from these systems not only helps ensure vessels are complying with our codes of conduct, but can also be used by local authorities to more effectively develop sustainable management plans for the fishery
What do you see as the outlook for the seafood sector over the coming 12 months?
COVID-19 has given rise to greater consumer appetite for healthier foods with the importance of a nutritious and balanced diet brought into focus by the pandemic. This is set to continue long after we return to some level of normality and fish, a source of natural protein and omega-3, will become a top choice for health conscious consumers.
Thai Union recognises the importance of healthy eating, as encapsulated by our commitment to ‘Healthy Living, Healthy Oceans’, which brings together strategies for healthy diets and all elements of sustainability.
Another trend set to shape the sector is the rise of plant-based food. This has been steadily gaining momentum over the past few years, and the demand for plant-based and other alternative proteins is only set to accelerate globally.
In line with changing consumer trends, Thai Union has already introduced a full line of plant-based seafood and meat products—from crab meat to chicken nuggets—and plan for further expansion in the coming year.
Through a combination of our involvement in the Space-F food tech accelerator and our own corporate venture fund, we are also building an ecosystem to nurture innovation in the food industry, including developments in alternative proteins.
We have invested in the likes of Flying Spark, a start-up focused on insect protein, as well as BlueNalu the world’s leading cell-based seafood company.
© 2021 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
