Tassal: Tasmania's Premier Salmon Producer And Industry Leader

Tassal's History and Growth in the Salmon Industry

Question:

Discuss aboout the Tassal Salmon Farming In Australia.

Tassal is one of the world’s largest salmon producers, and Tasmania’s largest employer. The company embarked on Tassal faming in 1986, and has since grown to take a significant chunk of the international salmon market. Tassal is short for Tasmania Salmon, and its history is largely analogous to that of the Australian salmon industry. Since the first salmon were imported form Nova Scotia, Canada, Tassal has grown into one of the most reputable companies as far as fish farming is concerned. The company has enjoyed both organic and inorganic growth. Through its own funds, it has been able to expand and open offices across Australia and New Zealand, and acquire a loyal following across Asia. It has also acquired other related companies as it seeks to enter new markets and industries, an example of this being the De Costi Seafood, an acquisition which was completed in 2015 (Tassal, 2017).

Tassal has won acclaim over several of its functions, including marketing, quality assurance and environmental sustainability. In 2013 for instance, it was the recipient of the prestigious Marketing Excellence Award, which is given to companies which have been able to utilize marketing professionally and efficiently. It has been lauded for its environmental sustainability efforts. In 2014 for instance, it was benchmarked as the global leader in salmon farming, in the areas of corporate, social and environmental reporting. This is reporting which is not only focused on the financial sustainability of the company, but also its social and environmental fortunes, and how its activities bring a positive impact to the society.  Other awards have been given for sustainability in business, and more importantly, for innovation (Tassal, 2017).

Overfishing is one of the most important issues facing the fishing industry in the world. It has been established that though overfishing, particular species of fish have become endangered. The Atlantic salmon has featured in this list, especially due to the actions of giant fish trawlers in the North Atlantic, off the Canadian coast. However, the species have found a lifeline through the practice of commercial fish farms. The practice is prevalent not only in Australia, but also in Canada, the United States, and other countries within which the ideal rearing conditions exist r can be recreated. In this respect, companies such as Tassal play an extremely important role in environmental conversation. At the same time, pressure groups such as the Sustainable Seafood Movement have supported commercial farms activities since they ensure that dependence on wild species is minimized (Kotler & Keller, 2012; Saikia, 2014).

Over the years, Australia has established itself as the premier source of seafood for the wider Australasian region. This is driven on by high quality, and the availability of a unique type of salmon which is not found anywhere else in the region. Besides Tassal, other companies in Australia have also attained the globally accepted standards of high quality processing standards. The industry is very well positioned to lead the market both in the region and internationally. The Australian aquaculture industry is in for a good run due to international and domestic trends regarding seafood. The Food and Agriculture organization, FAO, has predicted that by 2021, more than half of all fish consumed globally will be produced in farms, as opposed to wild fishing. There is an increase in the appetite for seafood both locally and internationally too. It has been reported, for instance, that local demand for salmon outstrips supply, meaning that the industry is likely to be lucrative for a long time to come, as more people become more familiar with salmon and other products of aquaculture (DOA-AU, 2017).  

Accolades for Tassal: Marketing, Environmental Sustainability, and Innovation

The industry has in recent years come under scrutiny due to the feeding practices the industry has in place. Salmon is a carnivorous fish. The companies feed them by catching wild fish and processing it to food for the salmon, in the process meaning that the industry consumes more fish than it produces. Salmon producers may therefore contribute of overfishing, especially of other species that they have no intention of rearing in the farms. To control this, the industry and salmon food manufacturers have come up with initiatives which will still result in a high – protein diet for the fish, but using less wild fish as is currently the case. Fish farming also has its own social benefits as well. In Tasmania, it has been established that the popularity of recreational shopping is on the rise. This has correlated with the rise in salmon shipping on the island, as well as in the wider Australia (Tassal, Annual report, 2012).

Tassal has segmented its market alongside retail and wholesale markets. In Tasmania, salmon eating is as avid as in other parts of Australia, especially given its reputation as the premier salmon farming zone in Australia. Of the retail market that Tassal serves, individuals over 50 years old are the main market. These individuals understand the famous health benefits of the fish better than the young generation, and are therefore willing to include it more in their meals. The wholesale market is targeted by Tassal due to the amount of fish it produces, and due to the strength of this segment in distribution. As a company producing more than 10 million eggs annually (Tassal, 2017), Tassal has an enormous capacity to serve Australian salmon lovers wit enough fish (Leonidou, Katsikeas, & Morang, 2013).

The Salamanca seafood Company is a division of Tassal enterprises, which operates in mainland Australia and is focused exclusively on wholesale business. The wholesale market in Australia fits the description of an ideal target market perfectly. It is one of the most lucrative segments of the market, being able to absorb must of Tassal’s group stock. In the financial reports released in 2012, Tassal Limited reported that its attempts to export salmon to other countries had produced highly unfavorable and unpredictable results, meaning that its economic viability is deeply in question. This has required it to redouble its efforts on the local market, where it understands that to successfully meet its growth targets in the future; it needs to focus much more strongly on the mainland wholesale market, and partly explains the decision to deploy Salamanca for this task (Leonidou, Katsikeas, & Morang, 2013; Praksis, 2014).

In terms of positioning, there are both industry and organizational aspects to Tassal’s approach. The Australian salmon industry, as has been mentioned before, has been renowned in the region for its attention to high quality. Tassal is no exception, with its business being highly dependent on its reputation for providing the highest quality Atlantic and Norwegian salmon, and even winning numerous awards for it. Another positioning element of Tassal is on sustainable agricultural practices which do not harm the environment. This is an increasingly important issue to many Australians and others around the globe. By showing that fish presented for sale have been reared in the most environmental – friendly conditions possible, Tassal shows that it is not merely focused on profits, but for the long-term wellbeing of the community within which it operates (Tassal, Annual report, 2012).

The Importance of Commercial Fish Farming in Environmental Conservation

Product

The product that Tassal produces for the market is of high quality, and has been the reason behind its growth over the years. The company has been able to improve its production methods, leading to the annual hatching of more than 11 million new salmon every year. The quality of salmon nutritionally is well documented, with the fish containing the vital amino acids. For this reason, it is highly popular among the older generation (Leonidou, Katsikeas, & Morang, 2013) (Ackman, 1996).

There are several offerings of salmon which are offered. The fish is offered fresh, smoked, canned, or frozen. Each of these specifications is geared towards specific needs of the people, as well as their distance to the main supply chains. Fresh salmon is typically used for barbeques and specific dishes. It can however only be reliably sold to consumers in or around Tasmania, since it does not have long shelf life. Sliced and smoked salmon on the other hand is an important offering especially to the wholesale market, of which Salamanca is the company’s main driver. Canned salmon is targeted at those looking for convenience, such as busy professionals who still love the fish. Lastly, there is frozen, which is still focused on this group, and is designed to be extremely easy to prepare (Ackman, 1996).

Due to the different packaging and differentiation of the product, different distribution channels are necessary. Besides the wholesale market, the company is also involved in export and retail. The packaging, and warehousing o the salmon takes place in Tasmania, and the product is either directly shipped to customers for resale, or to local stores which are able to sell the product while it is still fresh. Other considerations include environmental sustainability, quality assurance, and government regulations regarding the safety of food (Folke, Kausky, & Troell, 1994).

In the whole chain, sustainability is highly regarded. The company has ensured that its production methods are sustainable to the environment, by consistently reducing the amount of wild fish needed to feed the salmon. It has also enabled the decrease in reliance on wild salmon, by rearing the fish n controlled environments. Tassal is also a champion of sustainable aquaculture through the packaging of its fish, which comes with strong advice to dispose of the product wisely (Sprague, Dick, & Tocher, 2016).

Price

Tassal’s price is meant to reflect its quality and application of state of the art farming practices in its farms, The price is also reflective of the firm’s target to increase the consumption of salmon in Tasmania and elsewhere, both in and beyond Australia. The pricing strategy adopted by Tassal is a beneficiary of the sustainable and innovative practices it has undertaken in the past. The company has been able to over time, reduce the price it charges for its products, due to increased economies of scale and cost savings generated by innovative methods of production – cheaper feed, for instance (Folke, Kausky, & Troell, 1994).

Tassal appreciated the environmental and health impact of encouraging people to feed more on salmon, and in the process shunning less healthy foods. Feeding more on salmon will mean that the demand for wild fish, salmon or otherwise should decrease. At the same time, the increased appetite for salmon will lead to more revenues, but also a healthier population which eats highly nutritious food at an affordable price (Leonidou, Katsikeas, & Morang, 2013; Naylor, 2000).

The Australian Aquaculture Industry: Trends and Prospects

Promotion

Tassal has been aggressive in its marketing campaigns. It has sponsored events, and also sought to package its products attractively, drawing attention chiefly to the importance of its health benefits and Tasmanian heritage. Tassal has been successful as well in its online presence. The company has a huge following on social media, where it interacts with its customers, as well as a website which is well updated and lay out. For its efforts, he firm won the marketing excellence award in 2010 (Goi, 2009).

In all its advertisements, three things are always clear on the management of Tassal – focus on quality of the product, its health benefits, and the environmental impact of its activities. The company has sought, in different promotional avenues, to showcase the importance that Tassal attaches to the environment, and the adoption of sustainable practices in production. These efforts have not gone unnoticed, with the firm being credited for its performance in ensuring that the environment it relies on is not in any way harmed by its activities, which in other cases would be devastating for the environment.

Place

Tassal has a couple of distribution channels which it mainly uses to get its products to the final consumer. The first of these is Salamanca, which is primarily focused on getting smoked salmon, among other products, to the Australian market. This channel l is both economically and environmentally viable since Salamanca is a wholly owned subsidiary, and is therefore managed along the same sustainability procedures that Tassal is known for. At the same time, The Company distributes its wares locally. This is done so as to ensure fresh fish gets to the dinner plate. This also involves less transportation expenses and requirements, thereby further contributing to sustainability (Shi, Zhang, & Qu, 2010; Finch, 1998).

Comparisons

Due to the important environmental aspects which are in present in salmon farming, however, many companies are mostly focused on the production of salmon. They ensure that is sustainable, and that the best practices are employed. However, unlike Tassal, which has integrated sustainability into all its Ps of the marketing mix, others, such as Huon, have not. In this aspect therefore, the company possesses a clear competitive advantage (Tassal, History, 2017; Huon, 2017).

Despite the achievements that the company has met sustainability, there still is a great need to ensure that it is fully environmentally sustainable. This will mean that issues such as distribution, and especially, production, are further streamlined. The issue of feeds in particular requires more research to ensure that the company becomes a net producer of protein in the long term.

References

Ackman, R. (1996). DHA: Can It Benefit Salmon Marketing? Journal of Aquatic Food Product Technology , 5 (4), 7.26.

DOA-AU. (2017). Aquaculture in Australia. Retrieved 04 26, 2017, from agriculture.gov.au: https://www.agriculture.gov.au/fisheries/aquaculture/aquaculture-industry-in-australia

Finch, J. (1998). An option?based approach for pricing perishable services assets. Journal of Services Marketing , 12 (6), 473-483.

Folke, C., Kausky, N., & Troell, M. (1994). DHA: Can It Benefit Salmon Marketing? Journal of Environmental Managmeent , 40 (2), 173-182.

Goi, C. (2009). A revioew of marketing mix: 4 Ps or more? INternational Journal of Marketing Studies , 1 (1), 2-15.

Huon. (2017). Home page. Retrieved 04 27, 2017, from www.huonaqua.com.au/: https://www.huonaqua.com.au/

Kotler, P., & Keller, K. (2012). Marketing Management. London: Pearson.

Leonidou, C., Katsikeas, C., & Morang, N. (2013). “Greening” the marketing mix: do firms do it and does it pay off? Journal of the Academy of marketing Science , 41 (2), 151-170.

Naylor, R. (2000). Effect of aquaculture on world fish supplies. International Weekly Journal of Science , 405, 1017-1024.

Praksis, E. (2014). Looking for Sustainable Solutions in salmon aquaculture. Nordic Journal of Applied Ethics , 8 (1), 22-40.

Saikia, S. (2014). Sustainable aquaculture: agro-ecological role of periphyton in ricefish farming. Reviews in Aquaculture , 7 (3), 172–186.

Shi, J., Zhang, J., & Qu, X. (2010). Optimizing distribution strategy for perishable foods using RFiD and sensor technologies. Journal of Business & Industrial Marketing , 25 (8), 596-606.

Sprague, M., Dick, J., & Tocher, D. (2016). Impact of sustainable feeds on omega-3 long-chain fatty acid levels in farmed Atlantic salmon, 2006–2015. Scientific Reports , published online.

Tassal. (2012). Annual report. Tasmania: Tassal Group Limited.

Tassal. (2017). History. Retrieved 04 26, 2017, from tassal.com.au: https://www.tassal.com.au/our-history/