Tassal – an amalgamation of “Tasmanian” and “salmon” – is Australia’s largest salmon business, holding over 65 per cent of the local market.
The company employs some 700 people at its two hatcheries, six marine farms, and three processing facilities, which are predominantly located in the south east of Tasmania.
Despite a global oversupply of salmon causing export prices to drop by over 20 per cent, Tassal has continued to experience strong growth having turned its focus to the local market. In the six months to 31 December 2012, it increased its net profit after tax to $15.83 million.
While revenue in Tassal’s core retail and wholesale markets were up 22.1 per cent and 17.4 per cent respectively, export sales declined by 94.2 per cent and contract growing sales were down 69.7 per cent due to Tassal’s strategic decision to exit these lower-return market segments.
Tassal’s managing director and CEO Mark Ryan said the H1 results were a clear indication that the company’s infrastructure investment and focus on growing domestic market per capita consumption are the right strategies to deliver sustainable growth.
“As a result of the company’s successful marketing campaign, Tassal has been able to grow domestic volumes through increasing per capita consumption,” said Ryan. “Importantly, the growth in domestic volumes has allowed us to strategically exit the lower margin export and contract growing markets.”
Increasing per capita consumption
In Australia, the average salmon consumption rate per person sits at around 1.6kg per year. Tassal aims to raise it to over three kilograms per year, bringing it in line with the European average, through retail stimulus programmes and increases in new product development (NPD) and brand awareness.
Market research revealed that the three main barriers to salmon consumption are that salmon is not ‘top of mind’ for consumers as a meal choice; that it is not in consumers’ regular recipe repertoire; and that its versatility as a protein option is not understood.
“In researching our consumers and their purchasing habits in salmon, we discovered that salmon as a protein option was well behind that of the standard proteins such as chicken, beef and pork,” says Caroline Hounsell, senior marketing manager for Tassal.
“We want to increase the amount of salmon consumers eat and also to raise its profile as a protein option in households in Australia.”
In September last year, the company launched a three-year strategic marketing plan, incorporating its first TV ad campaign and aiming to address these barriers.
Showing a range of simple salmon dishes being prepared for different meals and eating occasions, the ad highlights the freshness, versatility and healthiness of its salmon, proclaiming “There are so many beautiful ways to get hooked on Tassal pure Tasmanian salmon – that’s the beauty of Tassal”.
The campaign also includes print ads in lifestyle magazines; PR and social media activity; and advertising and recipes on Australia’s leading recipe website Taste.com.
The result to date has been a whopping 60 per cent growth in brand awareness. In the coming year, Hounsell says the company will continue to invest significantly in print and TV advertising and will launch the next phase of TV ads in time for Easter.
To stimulate retail sales, Tassal has been working with both its retail and wholesale customers running price promotions and supplying branded recipe cards to ensure its marketing message is being effectively communicated and to help raise the brand’s profile.
“We’re in the fresh, tinned, smoked and frozen [segments], but there’s often a lack of branding in fresh, especially if the salmon is behind glass on a fish counter or in fishmongers,” says Hounsell. “But this is something we’ve really been working on, and we’ve developed a whole suite of point-of-sale materials that talk about the Tassal brand and says that the salmon is from Tasmania.”
Tassal has also upped its new product development, with health and convenience as key drivers. Probably the most significant launches in 2012 were its Easy Bake range of frozen salmon that take three minutes to cook in the microwave, and its Salt-Reduced Smoked Salmon, which contains 60 per cent less salt than standard smoked salmon while maintaining the same shelf life.
Both innovations have helped increase sales, but Hounsell says the latter in particular has really helped grow the category.
“It hasn’t cannibalised any of our other products, it’s opened the category up to consumers that may not have eaten [smoked] salmon in the past because of salt restrictions, such as people with high blood pressure."
Tasmania has great research capacity relative to its size, and Tassal works with both CSIRO and the University of Tasmania on R&D and innovation.
While salmon will remain its primary focus, the company is currently looking to diversify into other types of sustainable seafood to sell under the Tassal brand. Nothing has been finalised at this stage, but it could involve working with other aquaculture companies in Australia.
Sustainable systems
Over the last six years, Tassal has spent over $230 million on capital infrastructure underpinning its production in both farming and processing to ensure that it maximises production efficiencies and growth, and minimises risk.
In terms of processing, the company is increasing automation and streamlining technology, allowing it to increase its volumes and value-adding processes while lowering its operating costs and maintaining staff numbers.
While recognising that sustainability is not the main purchasing driver for salmon, and therefore not central to its marketing message, Tassal is pioneering environmental standards for salmon farming in Australia.
The company appointed Linda Sams as its head of sustainability in 2009. She overseas a team of two veterinarians, four environmental biologists, a community engagement officer and a certification specialist which provides her with the resources to embed sustainable practices into every level of Tassal’s operations.
A major recent initiative has been the development of a new hatchery facility that recirculates up to 98 per cent of all its water. Any waste water is used to irrigate nearby agricultural land, while sludge from the water is used as fertiliser. This will achieve hundreds of megalitres of water savings each year.
On its farms, the company has spent millions of dollars upgrading its nets to keep out seals and has implemented in-situ net washing technology, which allows it to manually vacuum off bio-fouling and stop using copper nets, which have caused concern about copper accumulation in sediment. The company aims to be free of copper nets across all of its operations by the end of next year.
“[My team] is looking for opportunities that improve the bottom line while improving our environmental performance, which makes the actual initiative sustainable also,” say Sams. “We don’t want to be a cost, we want to be a profit centre.
In early 2012, Tassal signed a partnership with WWF and released its first sustainability report to ensure transparency in its journey to become more environmentally friendly. It is one of the first food companies in Australia to release a sustainability report, and the first aquaculture company.
“This level of engagement and transparency is relatively new for Tassal,” said CEO Mark Ryan. “But we believe it is an essential part of our business operations going forward as it will help us to continue to be an accountable and sustainable aquaculture company.”
Last year, Tassal also become the first Australian salmon producer to achieve Best Aquaculture Practices (BAP) certification at farm level from the Global Aquaculture Alliance. The certification recognises and measures Tassal’s efforts in food safety, social welfare, animal welfare, and environmental and traceability aspects of the operations.
And
while the standard is more prominent in North America, it is becoming
more widely recognised in the local market.
The company is also
piloting new international performance standards initiated by the
Aquaculture Stewardship Council (ASC) at its Macquarie Harbour farms
on the north west coast of Tasmania.
The standard has been developed in conjunction with Northern Hemisphere and European farms, which face different conditions and challenges to salmon farms in Australia. Sams says Tassal is looking at the standard through a “Tasmanian or Australian lens” and feeding that information to the ASC organisation to help it develop the standard.
“There’s a number of specific details with this standard such as our impact on sediment health and water quality, any chemicals or antibiotics used on the farm, oil spills, noise, light – it’s the gamut, it’s quite a comprehensive standard,” says Sams. “Meeting some of the requirements will really challenge us, but we’re definitely addressing all of those aspects on some level already. We’re working with the ASC to make the standard regional without losing its key objectives.”
Tassal’s second sustainability report has just been released and contains the company’s first life-cycle assessment for its products.
With its current focus on product innovation and marketing driving the company forward, and its investments in infrastructure and sustainability ensuring it remains in good shape in the future, Tassal’s aim of almost doubling local salmon consumption levels certainly seems attainable.
