Monday, 29 March 2021 14:20

Creating an opportunity from crisis

EM2 21 DK caters to a variety of tastes in Denmark

This article was featured in EUROFISH Magazine 2 2021.

An entrepreneur established a fish processing and sales company intending to export his production. The spread of the coronavirus forced a hasty change of plans as markets shut down, so today he promotes his products on social media and sells directly to Danish consumers from his webshop.

The corona pandemic has left its mark on the seafood sector particularly the segments dealing with fresh products, not least by closing down restaurants, hotels, and catering establishments. Trends in retail are more mixed as supermarkets, at least in Europe, have remained fully stocked and consumers have continued shopping for food. According to the FAO, on the supply side there has been a contraction as vessels stay in port and crews at home following restrictions on travelling and gathering, measures that have also affected processing facilities.

Rays of light amidst the general gloom

Aquaculture harvests are being delayed and stocking volumes reduced in response to the lack of demand and to the precautionary measures introduced that also inhibit labour. As the most internationally traded food commodity in the world, seafood has been particularly affected by the closure of borders, cancellation of flights, and health inspection delays. While the impact of the coronavirus has been largely malign, there have been a few positive developments. Processed of canned and frozen seafood have noticed a hike in demand for these products as consumers have stocked up on non-perishables in response to concerns at the start of the pandemic that retailers would run out of food. The general uncertainty and the feeling of emergency that accompanied the spread of covid-19 no doubt also contributed to the popularity of these products. The restrictions on movement and assembling as well as the shutdown of large segments of their export markets also forced companies to develop the domestic market and explore new ways of selling. This has resulted in an explosion of sales over the internet as consumers confined to their homes used the internet not only to hold meetings and attend events, but increasingly also to purchase goods and services. Companies established full-fledged web shops and used social media to promote their products, and for many these steps made all the difference between surviving and going under.

Pandemic strikes just as business starts up

In Randbøl, a town in Jutland, Denmark, Ihor Velykopolskyy, an ichthyologist by training, experienced the full weight of the restrictions imposed by the pandemic. Having left his position with Troutex ApS, a company producing and exporting certified disease free trout eggs, where he had worked for three and a half very valuable years in terms of all he learned and the close relationship he established with Jørgen and Haakon Jøker Trachel the family behind Troutex, he had decided to set up a fish processing and trading company. Founding a company in a foreign country is not an easy task, but  Mr Velykopolskyy obtained vital support from his former employer, from Jesper Domino Isaksen, a food service consultant, and from Lene Lühdorf Nielsen, an accountant. Over the course of 2019 he found a site, organised the connections to water, electricity, and sewage, built and equipped the plant, set up freezers and a smokehouse, and identified suppliers and customers through his connections in eastern Europe, France and Austria. By February 2020 he was ready to go and was in fact processing an export order for trout caviar, when the pandemic struck. This prevented the buyer from picking up the order leaving Mr Velykopolskyy with a large volume of unsold caviar. This unfortunate experience was what triggered the sales and delivery direct to consumers which Mr Velykopolskyy has been engaged in ever since.

A long association with fish

Mr Velykopolskyy’s commitment to fish dates to the time when, as a four-year-old living on the campus of the college in Ukraine, where his parents taught, he decided to practice his father’s carp cleaning techniques on the family goldfish. The goldfish did not survive that encounter, but the experience engendered a lasting interest in all things fish. Although ichthyology was not his first choice (he wanted to be a veterinarian) he ended up both studying and working in this field. Among the assignments he was tasked with were breeding and restocking natural waters with endangered species, an area that gave him the chance to work with some of the foremost scientists in Ukraine, in particular, Prof. Antonina Mruk from the Ukrainian Institute of Fisheries under the National Academy of Agrarian Sciences. A chance encounter with a Danish trout farmer at a conference led to an opportunity to work in Denmark where he finally decided to strike out on his own.

Shortly after starting, however, the coronavirus struck, lockdowns were imposed, and Mr Velykopolskyy had to rethink his business model. Corona brought complications he says, but on the other hand it also created an opportunity—to develop new channels to sell to customers. The restrictions that kept people at home were also favourable to creating ways of selling directly to consumers, to exploiting the time they spent surfing the internet or on social media. News about the shop spread rapidly after it started a Facebook group where consumers would, for example, put up pictures or videos of dishes they had created using fish from Fishmasterbutik. Each time a delivery was made consumers would post pictures and recipes which generated interest in the shop and its service. The feedback generated by consumers was also useful for the shop as it would indicate individuals’ preferences and offer suggestions as to new products the shop should make or carry in its assortment. Because the company is delivering itself, Mr Velykopolskyy has got to know many of his customers personally which is useful when trying to divine trends. He also often collects the raw material himself from his suppliers establishing a close relationship with them too. In some ways he feels this contact, both physical and virtual, makes the whole enterprise, suppliers and customers with the shop in the centre, like an extended family.

Products for traditional and contemporary tastes

Demand has been brisk and he would now like to hire another person to work in the processing plant and perhaps start using a delivery company for some of the orders, while investing in an additional refrigerated delivery van. Supplies come from different sources and the assortment on offer follows a plan. Firstly, local fish, species and cuts and processed products that are traditionally eaten by the local population, for example, salmon, trout, cod, plaice, and eel. All these products come from ­Denmark, including the salmon which is farmed on land. This production method isolates the fish from nature and prevents exposure to pathogens, which means they do not have to be treated with medicines or other chemicals in any way. The feed the fish are given is organic which makes the product a little more expensive, but that is outweighed by the fact that it is local, very fresh, and of very high quality. Secondly, the assortment reflects the traditional tastes of the many customers who come from eastern Europe, who are no doubt partly drawn by the fact that Mr Velykopolskyy himself is originally from Ukraine. Common carp, for example, was a big hit among these customers just before Christmas, when it is eaten in many eastern European countries. The fresh carp is sourced in Poland and then at the Fishmaster processing facility it is gutted, washed, vacuum-packed, and frozen. In addition to carp, Mr Velykopolskyy also buys pike, and catfish from his award-winning Polish supplier, while sturgeon he buys from a German company from which he also obtains caviar.

Listening to customers and adding to the assortment is critical

Fishmaster also sells mackerel and herring as part of the ­assortment aimed at eastern European customers. Smoking, for which Mr Velykopolskyy is personally responsible, is an area where he experiments with different recipes, temperatures, and techniques. Salmon, for example, is cold smoked as fillets or steaks. Trout and eel are hot smoked whole, mackerel is hot and cold smoked, sturgeon is hot smoked whole, and he has also discovered how to smoke octopus. Customers have expressed an interest in a typical eastern European dumpling (pelmeni), so Mr Velykopolskyy plans to make and fill them with smoked sturgeon meat. Regular additions or changes to the assortment are necessary to maintain customers’ interest in the shop and to ensure that they return regularly to check for and to buy new products. Interest increases still further, when new products are inspired by the customers themselves. Each time we have something new it results in more orders, says Mr Velykopolskyy, not only of the new product, but also of other items. He therefore makes it a point to go through all the social media posts to see if somebody has mentioned a product they would like to have. As a result, he is currently looking for a supplier of seaweed.

For now, while the business is generally running smoothly, delivery is something of an issue. The shop offers to send products all over Denmark, and when there are a lot of orders it becomes logistically complex to deliver to the agreed schedule. This is not good for the reputation of the company, which is why Mr Velykopolskyy is considering a delivery company. However, this issue is a growing pain. When he started sales amounted to some 500-700 kg a month and now, a year later, they have reached 2.5 tonnes. The number of visits to the company’s Facebook page has grown similarly from 1,500 to 5,500 and the orders per delivery trip have increased from 50 to 150. If you treat your customers well, listen and respond to what they say then it is possible to grow the business. In other words, keep your customers happy and they will keep you happy!