Disruption in the supply chain has made codfish price soar

The increase in raw materials and transport costs have caused an unavoidable rise of price of codfish. However, the increase of these costs is not yet being reflected, in the same proportion, in the selling price for some companies.

After several years of stagnation of inflation, prices are on the rise. And they continue to go up and up. Regarding the codfish category, the increase in raw material costs, as well as their transport, energy and packaging costs are among the reasons for the rise of the product price.
Fátima Macedo, Brasmar Brand Manager, acknowledges the impact the costs caused by the disruption in the supply chain are having on the industry. “However, in the case of Brasmar, they are not yet being reflected, in the same proportion, in our selling price and in the retail price”, assures Fátima Macedo. Nevertheless, this context is not yet being felt in company sales. “This is not so evident as we are experiencing the Christmas season, when the consumption of codfish is higher”, she adds.
Considering that Brasmar is also reflecting the cost increase in the price of its products, the company admits that they may still increase as well. “There was an actual need of intermediate adjustment and if the market trend continues, a new adjustment will be necessary by the end of the year or early next year”, adds Fátima Macedo.

COMPLEX NEGOTIATION WITH DISTRIBUTION EXPECTED

On this matter, Brasmar’s position is somewhat more sceptical. “These negotiations are traditionally complex, but due to the market uncertainty and the high price volatility, they appear to be even more difficult in 2022”, believes Fátima Macedo. In what concerns the margin of the company, she adds that Brasmar has proceeded with an intermediate price increase to allow market adjustment regarding recommended retail prices. “Brasmar has not yet reflected all the increases in raw materials and logistic costs in order to allow distribution companies to gradually adjust prices for the consumer”, adds the Brand Manager.

RECOVERY OF SALES

After a difficult 2020, due to the closure of the HORECA sector, companies producing codfish are gradually recovering their sales. The same happened to Brasmar, which saw an increase in its turnover in 2020, either due to the restaurants being open for a longer period of time or the possibility of take-away service”, says Fátima Macedo. “However, the most positive impact was felt as of September, when some restrictions were eased such as the number of people allowed and the requirement of a digital certificate or negative test at restaurants and hotels”, she details. By the end of the year, even with the new restrictions imposed by the Government that is still in office, it is “naturally expected to close the financial year with an improvement compared to the previous year”, “essentially due to the sales increase in volume, but also to the rise of the unit value of the articles”, adds the Brasmar Brand Manager.

POSITIVE PERFORMANCE IN DISTRIBUTION

In the case of Brasmar, when comparing the same period in 2020, sales saw a two-digit increase, especially IN soaked codfish. Codfish loins are now the growth engine of the company’s sales. “Traditionally, there is a greater demand for this product over others. Another factor that has greatly contributed to this increase is the quality recognition by the consumer. Brasmar has been awarded the ‘Sabor do Ano’ (Flavour of the Year) label for the second consecutive year in soaked codfish loins and steaks”, recalls Fátima Macedo. On the other hand, the Brand Manager ensures that this award is doing a lot for the sales of the product. “This distinction has reinforced its position as an expert in the industry. This award has an impact on sales, because it is directly awarded by the consumers, who evaluate in a blind tasting the flavour, aspect, aroma, texture and overall satisfaction with the product”, she explains.

COMPANIES INVEST IN NEW PRODUCTS

Brasmar is investing in products that meet the current consumption trends. “In what concerns codfish, the trend is moving towards having more and more easy-to-prepare products, such as boneless loins. It is also worth mentioning the choice of easy-to-prepare convenience food, for individual consumption, in minimally processed and pre-cooked product categories”, adds Fátima Macedo.

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