Great Day for Food Innovation 19.03.2015

Seafood & Sustainability A survey of seafood buyers’ views on CSR and sustainability

Conducted by Royal Greenland and Deloitte Sustainability

Hanne Kvist, Director Market Development

Royal Greenland in brief

History & Legacy100% owned by Greenlandic Home Rule government

Established in 1774 as part of the Royal Greenlandic Trade Department

Largest employer in Greenland

World’s largest processor of cold-water prawns and Greenland halibut

1.900 employees located in 17 countries

Performance

2008/092009/102010/112011/122012/132013/143000

3500

4000

4500

5000

5500

-250-200-150-100-50050100150200

Turnover Profit after tax

Mill

ion D

KK

Turnover Profit after tax

Heritage and ownership

• Greenland is 2.1 million km² (about the same size as Western Europe)

• 57.000 inhabitants, predominantly Inuit

• Part of the Kingdom of Denmark, but with Selfrule Government since June 2009

• Fishing is the predominant trade and accounts for more than 93% of the total export of goods

• More than 1.000 independent fishermen deliver raw material to Royal Greenland’s factories along the west coast of Greenland

• Royal Greenland is present in all European markets and in Japan and China with owns sales subs.

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CSR survey Content

1. Purpose and background

2. Buyers' sustainability demands towards suppliers.

3. Customers’ sustainability demands towards companies

4. The influence of NGOs on seafood buying behaviour.

5. Outlook

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1. Purpose and background

The seafood value chain is the subject of both environmental and social concerns, including:

- the sustainable management of fish stocks, - health and safety on board fishing vessels,- working conditions and - environmental management.

What actually matters to a seafood buyer when purchasing seafood ?

Who actually influences buying decisions?

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2. Buyers' sustainability demands towards suppliers- Sustainability is also working conditions and sustainable packaging

• Although sustainable fishing is very important to seafood buyers, this has to be seen in a broader perspective than just MSC certification (especially Asia with low MSC penetration).

• Rated highly in Northern Europe, Central Europe and Asia is also the emphasis on good working conditions. In China special focus on foreign customers

• Bias in Southern Europe on packaging, maybe due to governmental campaigning

• No expectations of formal co-op with NGOs, even though this is common among i.e. retailers in Europe

• Un-formal co-op should not be underestimated

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3. Customer sustainability demands Demand for MSC certification

• Almost 70% of retailers and foodservice buyers believe that consumers and customers place a high emphasis on MSC-certified products – in industry only 35%

• In foodservice, many public kitchens may operate under national governmental guidelines for the use of certified food, organic food etc.

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3. Customer sustainability demands Willingness to pay for sustainability

• 50% of the retail respondents believe that consumers are not just looking for the cheapest products.

• In foodservice, sustainable products do not hold the same ability to generate a price premium as seafood products in retail, even though many public kitchens demand MSC.

• In the private FS sector, e.g. among restaurants and hotels, they choose their own market positioning and supply base, and may thus be less willing to pay for certified products.

• In retail the correlation between demand for MSC and willingness to pay exists, while it seems to be weaker in foodservice and certainly in industry

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4. The influence of NGOs on seafood buying behaviour depends on region

• Customer demands is the most important influential stakeholder and, secondly, the company’s own CSR or procurement policy.

• Also public opinion is an important driver for purchasing behavior

• Among NGOs the WWF is perceived as the most influential

• The various lists, i.e. WWFs “the safe to eat” list, are continuously important for purchaser navigation.

• Only respondents from Southern Europe viewed Greenpeace as being more influential than the WWF.

• Many respondents did not see NGOs as influencing their purchasing decision

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5. Outlook

• There is a predominant focus on sustainable fishing within CSR.

• All respondents, except in Southern Europe, also placed a great deal of emphasis on working conditions.

• Key stakeholders who influence buyers’ purchasing behaviour were identified as customers and internal CSR departments.

• NGO influence is paramount on an aggregated scale, as their visibility in the public domain influences the formulation of the CSR policies and purchasing guidelines to which purchasers adhere.

• WWF is the most influential NGO.

• Sustainability as a whole, including wider social and environmental issues, is a highly relevant issue to buyers.