Growth and competitiveness in the aquaculture value chain – case studies from the EU and the UK

Abstract

The European Commission considers aquaculture a strategic industry and provides guidance and financial support to Member States to increase production. However, despite that, targets have not been achieved, not least due to low competitiveness against imports from third countries. The aim of this thesis was to assist with sectoral strategy development and coordination across member states, as well as with firm-level competitive strategy formulation by, first, developing a prototype dynamic benchmarking platform of competitiveness indicators, based on adding value to publicly available quantitative data from multiple sources and covering the most important commercial aquaculture species in the EU. By analysing the heterogeneity in performance between sectors and countries, it provides insight on how to achieve a more nuanced and targeted approach to the development of aquaculture policy. Second, using mixed-methods case study approach, the research investigates the determinants of competitive success and growth at the industry, company and product level. The findings suggest that differences in performance, are primarily the outcome of variability in the production systems used and linked natural resources, in turn leading to differences in intrinsic product attributes subject to different demand characteristics. Understanding the potential that natural resources hold across the EU that have for producing products that can enter markets with high demand, needs to be a key element of coordination and targeting. In light of the expected change in industry structure associated with growing industries and the need for companies to adapt their competitive strategies to remain profitable, the research examines the challenges and opportunities to SMEs in a mature industry by looking at company-level case studies from the salmonid value chain in the UK. The results have pointed to concentration of bargaining power in farming and retail as a result of consolidation in those industries, as the main sources of pressure on the profitability of SMEs and the need for successful differentiation from commodity products in order to stay competitive. Finally, the factors underlying the outcome of product-level innovation are investigated by comparing case studies of new product launches by seafood companies across the EU, where the findings point to market orientation as an important element of successful projects. However, the overall analysis has also indicated that the key policy of all-encompassing growth in aquaculture needs to be reconsidered and priorities established according to the diversity of growth potential between industries. Where growth is not likely, focus on differentiation and value addition might be more applicable.