Market and Product Development Study for the Salt Fish Industry in Nova Scotia (May 2007)
Background: Industry Review, 2004
The saltfish industry has an important economic impact in many areas of Nova Scotia, but the industry is in crisis. In 2003, saltfish production totaled $90,000,000, employing 500 persons. Although this is substantial, it represents a tremendous decline from 1990 when production was $160,000,000, with 1,400 people employed in the industry. Nova Scotia holds less than 10% of the global saltfish market, down from about 25% in 1990.
The Gardner Pinfold report, "The Nova Scotia Saltfish Industry: Situation and Prospects 2004", summarizes the industry situation as follows:
- The groundfish collapse has resulted in a loss of markets in Europe, and the lack of recovery presents an on-going challenge to the industry.
- Nova Scotia producers have substituted Norwegian, Russian, Icelandic and Alaskan raw product, but higher cost have limited production levels.
- Nova Scotia saltfish production has dropped 65% between 1990 - 2003.
- Production has shifted from mainly cod to 50:50 cod and pollack.
- 70-80 Nova Scotia producers have stopped producing, and others have downsized due to loss of market share.
- China entered the saltfish market in the mid 1990's taking increasing market share from Nova Scotia.
- Rising raw material costs and price pressures are squeezing margins.
- A 25% drop in the U.S. dollar has put additional pressure on margins.
- Several Nova Scotia producers have turned to China for lower cost product in order to broaden product offerings and maintain competitiveness.
- The Nova Scotia market share has dropped from 75% in 1990 to 45% in 2003.
- Consensus on industry's future direction is still evolving.
To address the current situation, the Nova Scotia government is investing $250,000 to assist in industry development initiatives, which may lay the groundwork for a longer term plan for industry's future.
The Nova Scotia government proposes a four component initiative to assist industry:
- Market Development Initiative - $50,000
- generic marketing materials
- development of market development plan for in-market promotion with buyers and other end-users, in partnership with industry
Market Research & Business Analysis - $50,000
Industry Development Program $150,000
- Complete commissioned research focused on:
- identifying new markets
- identifying new products
- profiling successful saltfish infrastructure and market development models from other areas
- identifying industry organizational models
Industry/Product Development Initiative (currently unfunded)
- As detailed in the attached operational guidelines
- Implement a product development initiative having strong industry application and co-ordination. The project would require a strategic alliance between multiple companies working co-operatively in the product development process
Industry will need to organize the sector and take leadership in addressing the market pressures. The generic marketing materials, market research, product development opportunities and the industry development program will provide the groundwork necessary to guide future direction and industry planning from a strategic perspective.
The cumulative negative impact of these issues has resulted in an industry which is in crisis. If you have any questions regarding the Gardner Pinfold report, "The Nova Scotia Saltfish Industry: Situation and Prospects 2004", please contact:
Nova Scotia Fish Packers Association
Please note: Applications for this program closed on December 1, 2005. The program is in progress.
38-B John Street
P: (902) 742-6168