A gutted sturgeon, Arctic char, large freshwater trout, and a large trout fillet all are locally produced by the members of Ecofarm and processed at the PO’s newly-established facility. A relatively young PO, Ecofarm was established to improve both the volumes and the sales of Estonian farmed fish.
Domestic production needs to replace imports
The Estonian aquaculture sector with a total production of 730 tonnes is relatively small something that both the Estonian and the European authorities would like to change. Modest volumes of several species (trout, carp, eel, crayfish, sturgeon, Arctic char) are produced, of which production of trout amounts to almost two thirds of the total. One of the main constraints the sector is facing is competition with marine farmed fish. If the freshwater aquaculture sector is to grow it has to fight back. Mounting a successful challenge to imported fish starts with understanding the consumer and finding out why he/she makes certain choices.
In Viljandi, a small town a couple of hours away from Tallinn, a fish-related event was held in February on the lake that was attended by a few thousand people. This was the ideal opportunity to learn about consumers’ preferences and also market some of Ecofarm’s products. Mr Epner made three significant discoveries during the course of the event, which he hopes to exploit to promote his members’ farmed fish. The first was that consumers are generally unaware of the existence of a freshwater fish farming sector in Estonia. This suggests the need to create awareness of the sector and the advantages it offers in terms of freshness of the product compared to fish that is imported. He also learned that people increasingly prefer products that have to be processed as little as possible. Instead of whole round fish, the fish should be gutted, and instead of whole fish, consumers prefer fillets.
Packaging, taste critical for product acceptance
Finally, Mr Epner also discovered that in the case of smoked fish the taste and the packaging could make a difference. The smoked sturgeon has a relatively low salt content of maximum 1.8%, which highlights the taste of the fish without drowning it. The salt content can be low because the fish does not need to have such a long shelf life compared with imported products. The packaging, a vacuum pack to keep the product fresh, seemed also to be popular amongst consumers. Ecofarm is a PO for fish farmers, but that is not preventing Mr Epner from developing agreements with other parts of the sector. Among his ideas is one to try and develop products based on Baltic herring. The supply of raw material should not be a problem as Ecofarm is located a few meters from Estofish, one of Estonia’s three pelagic PO’s. The herring is headed, tailed, and gutted and exported to customers in Ukraine and Belarus. Ecofarm is also contemplating going a step further and filleting this fish as there is a market for these too.
Currently Ecofarm has five members and the application from a sixth member is being assessed. These represent about a third of the 17-20 finfish farms in Estonia. The advantages of being part of a recognised PO are many, but it also involves a degree of cooperation and some loss of autonomy, which, according to Mr Epner, many fish farmers are reluctant to countenance. Membership of a PO is also more attractive for more recently established companies, as older ones typically have lower production costs, established markets, and have therefore less of an incentive to join a PO. A PO can take over the product development, production, sales and marketing of the fish, and because it can offer bigger and more consistent volumes than an individual fish farmer, a PO is more interesting as a partner, for example, for a retail chain. As Mr Epner says, a big buyer might need five tonnes of fish a day, while an individual fish farmer may be able to supply one tenth of that. POs can also negotiate on behalf of their members for feed or other inputs, again securing better prices because of the larger volumes, which also give better prices for the freight. A PO can get a higher proportion of support for building a processing facility than an individual processor, so the POs’s costs are usually lower. Another important reason to join a PO is the stability it offers. The PO makes a 1, 2, or 3 year production plant which defines how much fish it will take from each of its members. If the producer has a firm contract to sell a certain volume of fish, then he can concentrate on other issues, such as improving the technology or the management of the farm or expansion into new species.
Domestic fish could partly meet demand
While some EU countries are trying to develop their fish farming industries to the point where domestic farmed production can meet up to 75% of domestic demand, Mr Epner feels that for Estonia, the industry with the help of support programmes, the administration, and the implementing agencies 50% would be a more realistic target. More farms producing larger volumes is also in the interest of the PO as it has access to a wider range of raw material. If I want large trout fillets I need a producer of a fish that weighs perhaps 1,800 g, says Oleg Epner. Currently there is perhaps one such producer in Estonia and his prices are much higher than the PO can afford.
Ecofarm currently sells mainly on the domestic market, but the Russian counter sanctions which banned imports of EU agricultural products into Russia have had consequences for the fish market in Estonia. Prices of meat products that normally compete with fish are lower reducing the demand for fish. Ecofarm is working on developing export markets for its products and has in fact started exporting to Latvia, and Finland and hopes to enter the Swedish market soon. For the moment it is mainly fresh product that is being exported as those markets can then further process the fish, for example, by smoking it, in line with local tastes. Producing a taste that will appeal to the Estonian market is difficult enough, let alone creating one that will be popular abroad. Successful product development usually takes a large team of people, says Mr Epner, while at Ecofarm we have perhaps two to three. This group is now being challenged by one of the PO’s customers to come up with an exciting new product based on trout.
Tel: +372 5883 9011
|Director: Mr Oleg Epner
Species: Rainbow trout, Arctic char, sturgeon, Baltic herring
Product form farmed: Whole gutted, fillets, fresh or smoked
Product form wild: Headed and tailed and gutted, frozen
Markets: Estonia, Finland, Sweden (for farmed); Ukraine, Belarus (for wild)
Volumes: Up to 2400 tonnes per year
New project has multiple objectives
Mr Epner feels that greater public awareness of the domestic fish farming industry can lead to more fresh locally-farmed fish being consumed. He is currently working on a project, the goal of which is to get school students in an entire county to start eating 200 g of locally produced fresh fish a week, instead of imported frozen fish. While fish farmers support the project Mr Epner has also enlisted other companies dealing with whitefish. The point is not to make money, but to create awareness of the domestic farming sector, to offer some kind of product that uses off cuts from the industry and thereby reduce waste, as well as to provide students with nutritious food.
An aquaculture PO in name Ecofarm has an interesting business model that does not rule out cooperation with producers of wild fish. Whether this will contribute to the goal of increasing farmed fish production in Estonia, or distract from it, remains to be seen.