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EuroEuropean Opportunities in an Expanding Global Lobster Market

John SacktonPublisher SeafoodNewsBergen, NorwayMarch 3, 2016

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World Lobster Species

Homarus (NorthAmerica)

Panulirus spp (Brazil, Australia)

Jasus spp(S. Africa, Australia

Homarus (Europe)

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North American Lobster Landings Double Since 2008

0

20000

40000

60000

80000

100000

120000

140000

160000

180000

ME

TR

IC T

ON

S

US / Canadian Landings Set New Record in 2015

US CANADA

Source: US and Canadian Gov’t data; 2015 Industry estimate

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Growth has been in North American Homarus Lobster

American Lobster increased from 38% to 50% of Global Supply

2008 2013

Source: FAO

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In US Total Supply Increased 76% Since 2008

0

50000

100000

150000

200000

250000

300000

350000

400000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2,014 2015

US Lobster Supply (Live Weight)

Live Imports Frozen Processed Landings

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China Official Imports of Homarus increased nearly 1000% since 2008

0

1000000

2000000

3000000

4000000

5000000

6000000

7000000

8000000

9000000

10000000

2008 2009 2010 2011 2012 2013 2014 2015

KGChina Imports of Live Homarus Vs Live Spiny Lobster

Homarus Live Spiny Live

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European Imports have remained flat

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

2010 2011 2012 2013 2014

European Lobster Imports (EU-28)

Rock/Spiny Fzn Homarus Fzn Rock Live Homarus Live Norway Prepared

Source: Eurostat

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Only the UK has Seen an Increase

Source: Eurostat

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

ITALY SPAIN FRANCE BELGIUM (and LUXBG -> 1998)

UNITED KINGDOM Others

Imports by Major Country

2010 2011 2012 2013 2014

Traditional SouthernEuropean Markets -Spain, Italy, France-Are all Declining

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Live Demand Drives Price

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Yield is key to understanding Lobster pricing and why live lobster

demand sets prices

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Live Lobster 100% Brine Frozen Raw 103-105% Whole Cooked 86-90% Tail only 20-24% Claw, Knuckle, Leg Meat 9% to 13%

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Processors very sensitive to raw material price changes

• A 20 cent change in dock price is equal to

– $1.43 to $2.00 change in meat cost

– $.83 to $1.00 change in fzn tail price

– A $0.22 to $0.24 cent change in whole cooked price

Processors Can Only Buy Lobsters During Times ofSeasonally Low Pricing

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Lobster Pricing

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Lobster meat is becoming more valuable

$0.00

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

$14.00

$16.00

Jan-08

Apr-08

Jul-08

Oct-08

Jan-09

Apr-09

Jul-09

Oct-09

Jan-10

Apr-10

Jul-10

Oct-10

Jan-11

Apr-11

Jul-11

Oct-11

Jan-12

Apr-12

Jul-12

Oct-12

Jan-13

Apr-13

Jul-13

Oct-13

Jan-14

Apr-14

Jul-14

Oct-14

Jan-15

Apr-15

Jul-15

Oct-15

Us Dollar Values: Live Exports to China, EU vs Meat Imports to US

Live Exports Meat Imports

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US Market Absorbed New Supply

$-

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

$9.00

0

20000000

40000000

60000000

80000000

100000000

120000000

140000000

160000000

180000000

2008 2009 2010 2011 2012 2013 2014 2015 (Est)

Pou

nds

US Lobster Price and Total Supply

Volume Price

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Retail Sells Live Lobster more Than Frozen

$0.00

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

$14.00

$16.00

$18.00

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,000

50,000,000

2011 2012 2013 2014 2015 52 Wk Nov

Po

un

ds S

old

Lobster Volume and Price at Retail

Fresh / Live Fzn Price Fresh Price Fzn

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Retail Sales highly Concentrated in Northeast and Mid-Atlantic

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Menu expansion in Food Service

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Menu expansion

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Menu expansion

Source: Food Genius

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Export Growth Has been to China

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

2010 2011 2012 2013 2014 2015

Poun

ds

All Growth in US Exports of Live Lobster Has Been to China

Italy Spain France Other Europe China All

China Purchases

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Future of Lobster in Europe

• Southern Europe will continue to buy live lobster

• N. American Lobster is a Relatively New Product for Northern Europe/UK

• Weak currency will make lobster expensive

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Lobster Growth Will be Gradual• CETA will help increase supply from

Canada

• Catering will have to promote lobster at restaurants

• Food show promotion also important

• Need to go beyond cooking live lobster:

– European chefs face same problem as US of limits on live lobster

– Have to move beyond the popsicle lobster

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Can we learn from Salmon to Raise the Value of Lobster?

Fine Dining

Everyday Meals

Penetration of Supermarkets

New Product Development, Innovation

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An Everyday Meal: Smash Hit in London

BurgerLobster RollSteamed LobsterGrilled Lobster

£ 20

4 Items on Menu

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Past and Future

Frozen popsicle lobster with spaghetti

Curried Leek with Lobster

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Thank You