Potential for Seafood Product Development:

An Overview

by

Tom Rippen
Director
Virginia Polytechnic Institute and State University
Seafood Extension Unit
Hampton, VA

Since the early 1980s, government, aca- the many issues related to developing and success-
demic and industry trade organizations have gen- fully marketing a new product, Food industry
erally de-emphasized their involvement in classical leaders shared their experiences with seafood
product development. Previous studies tradition- processors, often with graphic accounts of product
al y produced items from a new or underutilized successes and failures. Major topics included
raw material, sensory attributes were then refined, trends and market evaluation, cost analysis, con-
and acceptability assessed through market trials. cepts of product formulation, regulatory consider-
Too often these efforts proved unsuccessful due to ations, and public and private support services.
failure to accurately identify the customer or to Significant conclusions from this meeting and
fully coordinate the projects with industry partners more recent market and regulatory developments
directly involved in all the production, distribution are discussed in this article,
and marketing channels. As the marketplace and
processing technologies become more complex, Trends
however, seafood companies are again requesting
assistance with the product development process. The fish business has undergone many
A comprehensive approach is ,warranted since changes during the past decade. Buyer specifica-
most seafood processing firms are small, currently tions, consumer preferences, raw product avail-
produce unprocessed products or products receiv- ability, international market competition and regu-
ing only primary processing (e.g. shucked oysters, latory intervention (food safety and waste manage-
dressed fish), and have no formal product devel- ment) are issues placing a unique set of pressures
opment program. on seafood processors. Companies are becoming
fewer, larger and more sophisticated. To succeed
During April 15-17, 1989 a New Product in the 1990s, these firms will increasingly need to
Development Conference was held in Newport recognize opportunities and adjust their operations
News, Virginia for seafood processors and food according y.
industry suppliers. Thirty participants discussed

Journal of Food Distribution Research February 911page 53

Table 1

Sample Selection of Product Attributes for New Product

.
iwe~ies m- form second. form lmeQ,mthd. ~kgl~ k

cod whole plainhaw std. oven tray-pack gen. retail

pollock pandressed breaded microwave IQF bulk govt. feeding
salmon skin’d filet baked snack dual oven canned health retail
mshi boned loin soup stir fry shatr-pk. fast food
flounder mince portion deep-fry pWd. tub mail order
shrimp flakes/pcs. extruded r.t.e. block wht. table
scallops peeled refilg. meal Iange top pasteur. speclty. ret.
oysters Steaked smoked convection pouch further proc.

Commercial buyers have traditionally pur- research and the many possible factors that add
chased seafood ftom the supplier quoting the value; including package type, size or convenience
lowest price. More experienced buyers usually feature, consistency of grading, minimum defects
develop a preferred list of suppliers. In the future (e.g. bone or parasite specifications), portion con-
the current trend toward pre-approval of suppliers trol, a variety of edibility characteristics, and
based on a set of minimum product or processing marketing efforts highlighting quality and value.
standards is likely to become a widespread indus-
try practice. The list of product possibilities is usually
limited by operating constraints. Product options
Product attributes may be dictated by equipment limitations, labor
availability or skill requirements, a buyer’s vol-
Major accounts are now often available only ume needs, waste discharge constraints, and raw
to processors who are U.S. Department of product or ingredient availability. Other consider-
Commerce inspected, consistently meet microbio- ations include, whether margins at targeted mar-
logical targets or use certain processing or packag- kets will support the custs of production and
ing systems. Examples include, crabmeat specifi- distribution, whether the product is adaptable to
cally processed to eliminate - markets and distribution systems currently used or
~, fresh ftsh fillets possessing a will require an innovative marketing effort, and
guaranteed minimum shelf life, and scallops whether the product possesses adequate storage
frozen IQF rather than in blocks. Any new prod- stability.
uct introductions will be far better positioned if
they possess the necessary attributes. Product brainstorming:

Similarly, food service institutions are likely At the conference, Jim Daniels, Senior
to only consider products that fit their existing Director of Purchasing for Mrs. Paul’s Klchens,
facilities, serving schedules and store concept. described a technique sometimes used to identi~
Fast food items must prepare quickly with cur- potential products worthy of development. Char-
rently installed equipment, retain desirable eating acteristics are categorized and tabulated by team
qualities under heat lamps and fit trays and drive- members to permit assemblage of various attribute
up windows. combinations. A simple example is shown in
Table 1.
Conference participants gained an itpprecia-
tion for product development as more than com- The tabulated product characteristics are not
bining food ingredients. It encompasses market prioritized. Features can be combined by select-

Febmary 911page54 Journal of Food Distribution Research

ing any feasible descriptor fkom each appropriate
column. For example, an item may be a cod
sandwich portion that is breaded for reheating in Along with opportunities, many snares are
a convection oven and individually quick frozen set, even for seasoned entrepreneurs. Perhaps 80
for bulk sale to government feeding programs. A percent of new products fail and usually within a
less conventional consideration could be a baked year of introduction. Success brings risks also
snack made from extruded pollock mince for sale since product life spans are typically short (2-4
in foil pouches to health food stores and specialty years), requiring rapid scale-up of processing and
departments. distribution capacity. Firms may become heavily
capitalized only to see demand for their products
Finding a niche decline as competition or market requirements
change.
Jim and other industry leaders emphasized
the opportunities that exist for small to medium- Jim Daniels, Gil Wheeler (Golden West
sized companies, Frequently they are faster than Foods) and Ron Grulich (East Coast Fish and
large firms to introduce new product concepts and Scallop Company) described in detail some of the
may be better suited to serving certain markets difficulties. Retail markets are very crowded and
such as small chains, speciaky stores, mail order present significant challenges. Slotting allowances
and some export markets. Hot marketing con- and subsequent reslotting fees for new or modified
cepts will continue to be ethnic and gourmet, products contribute significantly to the costs of
convenience and flavor, microwave and prepared placing a product on grocery shelves: perhaps
foods, health and food safety. Often new prod- $70 million for a national roll-out.
ucts are merely extensions or new versions of
existing products, such as finger food forms of Careful market research is the hinge pin for
dinner entrees. A product can be “re-invented” any product development effort and, in large
about every five years. firms, properly precedes product conception,
Smaller seafood companies seldom have separate
Jim pointed out that a large sales growth marketing and product development departments
potential is represented by the many Americans and are more likely to neglect the critical market
who are currently eating little or no seafood. As assessment steps. Other risks include, 1) failure
the population ages and eating habits increasingly to fully meet product specifications, 2) failure to
become associated with health issues, a significant innovate, 3) risk of moving too fast, 4) risk of
proportion of these consumers are likely to pur- moving too slow, 5) unforeseen technical difficul-
chase seafood on the advice of health care profes- ties, 6) missing best time windows to introduce a
sionals. Sales improve when labels contain health product (often autumn leading to Lent), and
and food exchange information. 7) failure to thoroughly research brand name and
labelling issues.
Raw product availability has become a
determining factor for many product development Regulatory Considerations
efforts, especially for national companies. Most
of the increased production capacity is now com- The regulatory climate for seafood proces-
ing from aquiculture. The explosion in cultured sors has become complex and has contributed to
shrimp and salmon supplies during the 1980s has the closing of many plants. The Environmental
generated optimism that a wide variety of compet- Protection Agency in cooperation with state
itively priced products will be formulated from enforcement programs has issued strict waste
these sources through the ‘90s. Items composed discharge guidelines for coastal companies that
of high profile, widely accepted species should formerly had littt’difficulty in attaining the neces-
require less promotional effort than those made sary permits. Ih’ some cases, construction of
from underutilized stocks; and product perfor- treatment facilities required for compliance may
mance is generally more predictable. conflict with, wetland management legislation.
Processing ~tites may exceed 90 percent of live

Journal of Food Distribution Research February 911page 55

animal weight in some seafood operations. Land- for HACCP plans. Time and cost constraints may
fills and other traditional means of solid waste be especially discouraging to small firms.
disposal are becoming more expensive and less
available. And companies connected to municipal On a positive note, HACCP will create a
waste treatment facilities frequently pay hefty significant opportunity for companies that can
surcharges for high organics loading of those supply new, safety assured products. Conve-
systems. These issues are major concerns of nience-minded institutional buyers will select from
managers responsible for new product develop- a limited number of competitors for their ready-to-
ment since most food processing procedures alter eat processed seafoods. Another niche will open
waste discharge quality or volume and increase for companies that can supply further processors
associated costs. with HACCP produced intermediate products that,
in turn, comply with standards written into their
Conference participants heard industry HACCP plans.
accounts of how corporate policy is often shaped
by environmental concerns. To minimize waste Also at the conference, regulatory and
problems, some companies that formerly per- industry representatives discussed product label-
formed all processing steps now purchase pre-cut ling considerations. Mary Snyder, FDA,
raw materials or otherwise limit the scope of their described her agency’s requirements for ingredient
operations. Even normal cooking odors were and nutrition labelling, species identification and
shown to influence plant site selection for a fhr- print formats. She illustrated examples of proper
ther processing operation. As the coastal U.S. and improper labels and offered assistance to
population expands, conflicts with traditional managers wishing to have their packaging
seafood processing centers will heighten. reviewed before products are introduced.

Similarly, food safety and quality issues Several participants requested more flexibil-
frequently determine the feasibility of producing ity in the species name requirement to permit use
a new product. U,S. FDA and National Marine of approved generic terms. They felt that certain
Fisheries Service (NMFS) programs have recently value-added products could best utilize a variety
expanded to address an increased interest in sea- of species blends and substitutions that are cur-
food safety assurance. The seafood industry rentl y unfamiliar to most consumers, and therefore
through ita trade organization, the National Fish- of limited marketability. Another industry partici-
eries Institute, has requested legislation mandating pant cautioned the group to thoroughly research
a national seafood inspection plan, and passage of brand names since even remote similarities to
a bill is expected this year, They endorse the major brands may be challenged.
recommendations of several academic and govern-
ment studies calling for a program based on the As pending legislative issues are addressed
principles of HACCP (Hazard Analysis Critical by national and state governments, product label-
Control Point). Among other features, such a ling, safety, economic fraud and environmental
program requires identification of critical opera- issues will become more regulated. Those firms
tions and appropriate monitoring to mitigate risks. who get a head start and successfully meet these
challenges as they arise will be presentetl with
The number and types of critical control many marketing advantages through the 19!0s.
points and the complexity of related monitoring
schemes should now be integrated into all product
development planning. Producing a relatively
hazardous product, such as a minimally processed,
vacuum packaged, refrigerated entree is likely to
require more strict controls and more detailed
reporting than will a conventional fish block oper-
ation. Attempts to innovate may, at times, be
tlustrated by a new regulatory approval process

February 911page 56 Journal of Food Distribution Research