New Zealand King Salmon North American Vice President Michael Fabbro, has been instrumental in building appreciation and demand for our Salmon in North America for the past decade. He is currently at ground zero of one of the world’s COVID-19 hotspots, New York, and witnessing the market disruption it’s caused, and the remarkable innovations businesses are using to survive it.
Q) You’ve been in marketing for New Zealand King Salmon for the past 10 years, can you tell us about your role?
A) I’m responsible for our business in North America. We represent about a third of the company’s sales and North America is by far the biggest export market. We currently sell into both the foodservice and retail channels and are in the process of entering the pet category as well.
Our more established brand is Ora King, which we launched in 2012. We’ve been able to carve out a really great niche and reputation for super-premium quality among the best chefs in the country. We have an in-market sales team that works with all three tiers of our supply chain to really promote product education and knowledge with our customers. They get out into the market and develop strong relationships with distributors and individual chefs from Honolulu to New York and from Calgary all the way down to Tulum, Mexico. We have a marketing team back in NZ that does a fantastic job of supporting the brand and managing social media, which is really essential to our communications with customers up and down the supply chain.
Regal is our retail-channel brand which we launched in the US in 2018. We have a line of cold and hot smoked King salmon in retail packs that are off to a great start. We’re in major supermarket chains like Safeway-Albertson’s and small, upscale markets like Citarella in New York City. We’re still new and young, so there’s a way to go in broadening our distribution and brand awareness with consumers. But we’re on a great trajectory. We expect this category to be a big growth driver for us over the next couple of years. We have a US-based sales team that gets out into the field and makes it all happen. Same as Ora King, we have a very strong marketing team back in NZ that gives us great tools to work with.
We’re also in the process of launching our pet brand, Omega Plus, into the US market. We’re doing focus groups this month to help ensure sure we’re on target with our products and messaging for the American consumer. Our goal is to launch in early 2021.
Q) So how do people there see NZ Salmon?
A) NZ King Salmon is the best. Consistent quality is really the foundation of our reputation. But our credentials on sustainability are a major factor too. The season for wild King salmon just opened, and NZ King salmon is currently at a higher price point. This would have been unthinkable 10 years ago.
Q) How has the American appetite for NZ Salmon changed during your time?
A) Ten years ago, there was so much resistance to farmed salmon in the US market, the team back in New Zealand had a hard time understanding what I was talking about when I would relay some of the comments back to them. It was so frustrating, because the media messaging had been strongly against it for many years and the negative perception was really entrenched. But the arguments that consumers and chefs had read and heard about didn’t really apply to what we were doing in New Zealand. So a big part of my initial job was just telling the story about how things are done at NZ King Salmon. Our best tool was a photo book we used to walk someone through our whole process from hatchery to harvest. It was the next best thing to a farm visit!
The tide really started to turn after we got our Monterey Bay Aquarium Seafood Watch “Best Choice” rating. That helped give us “legitimacy” and we were able to point to an objective source who validated what we were doing. The chef community has now totally come around and we very, very rarely hear someone who instinctively pushes back on New Zealand farmed salmon. The consumer perception has changed a lot too, but there’s definitely still some work to do there.
We like to say “know your farmer”. Whether you’re buying salmon, pork, tomatoes or apples. Know who and where you’re sourcing from. Because not all farmers and not all practices are the same.
Q) USA is the biggest export market for NZ salmon – where does it all go?
A) Pre-Covid, the majority of our sales were fresh Ora King and went to the restaurant channel. Mostly high-end, but not exclusively so. Our core customer is a chef who wants to source the best ingredients and is concerned about sustainability. So that includes high-end Michelin-starred restaurants such as L’Appart and Daniel in New York City. But it also includes neighbourhood restaurants in small towns like the Mint Café & Bar in Belgrade, Montana.
Q) What is the dining culture like in the US?
A) Dining out is definitely common in the US. Pre-Covid, more than 54% of all food expenditures were at restaurants, cafes and cafeterias. And the “Food Away from Home” share was continuing to grow. This is one reason the supply chain was so disrupted when restaurants started closing down. Retail food expenditures went from less than half to probably 90%+ in a matter of days.
Q) So how has the Covid-19 pandemic affected demand for seafood?
A) The fresh seafood industry was caught right in the cross-hairs. About two-thirds of fresh salmon in the US was sold through the foodservice channel. And all of the fresh seafood out of New Zealand relies on international passenger flights for the supply chain. So when the restaurant and airline industries came to a screeching halt, it certainly created some very sudden and significant challenges for us.
Q) How is the industry adjusting to the disruption?
A) The speed at which everyone in the entire industry found new channels and opportunities has been just amazing. This is everything from finding creative solutions to supply chain and logistics, to Michelin-starred restaurants doing take-away and delivery. One great example is a leading speciality food distributor in New York City, Baldor Foods. They have a fleet of trucks that normally deliver to all the great restaurants in the city. But when that came to a complete standstill, they did a quick pivot and set up an order and direct delivery system for consumers. They partnered with a local seafood distributor to cut and pack seafood in home chef friendly sizes and packages. It really took off and the sales numbers have been amazing. Home chefs and consumers are so eager to source interesting, high quality products. The same products, such as Ora King Salmon, that they loved having when they were dining out in New York.
Q) So, Covid-19 might actually have some positive effects in the long run?
A) My guess is that companies like Baldor, mentioned above, are not going to walk away from the direct delivery program. And we’ve seen a lot of growth in speciality markets and seafood shops. Our retail smoked line is also trending up very sharply. So we’ve been able to re-establish a very strong sales base in a short amount of time. If foodservice has a modest rebound over the next 12 months, we could actually find ourselves in a stronger position.
Q) You live in New York city, the epicentre of one of the world’s largest Covid-19 crisis – what is daily life like at ground zero?
A) Well, I think this is now week 10 of working from home and being in a bubble… I’ve lost count. The daily case/hospitalisation/death counts are definitely showing continued improvement which we are all grateful to see. But back in late March and early April when things were really at the worst, the atmosphere was very dark. The streets and sidewalks were nearly empty of people and traffic, ambulances were continually rushing back and forth through the city, a field hospital was pitched in the middle of Central Park, and of course we had all the mobile morgue trailers parked outside the hospitals. We are hoping that those days are behind us for good.
Q) Can you look into your crystal ball and tell us how the next year looks in market?
A) Hah! I am sceptical of anyone who makes predictions about the future of the industry! I think we all need to get used to living with uncertainty. And whatever your business model was in February, you can forget about it. You better come up with a new plan and you better be flexible!