Canned Tuna Market Analysis

Canned Tuna (Global, 2022)

Introduction

Tuna is a large market, in the context of the fishery industry, mainly because of the evolution of tastes in favour of ready-to-eat and healthy food. As life has become more and more hurried, the demand for ready-to-eat food has grown, which has made tuna a very popular food among those who want to eat healthy and eat in a healthy way. Tuna can be easily adapted to a large number of dishes, which makes it even more attractive for diverse cuisines. And the growing awareness of sustainable fishing practices has also influenced consumers' purchase decisions, which has led to the development of eco-friendly catching methods. Tuna is a very dynamic market, with a mixture of established and new players, which are fighting for market share through innovation and strategic marketing. And the tuna market will continue to develop. It is therefore important for the tuna industry to understand the underlying trends and the consumers' behavior to be able to make the most of the opportunities in the future.

PESTLE Analysis

Political

In 2022 the canned tuna market was faced with various political obstacles, especially with regard to fishing regulations and tariffs. In the first case, the European Union tightened its fishing regulations, reducing the quota for tuna by 15 per cent in order to safeguard the resource. The tuna population had been in decline for the past two decades, falling by 30 per cent due to overfishing. Meanwhile, the deteriorating relationship between the United States and the Pacific Islands meant that the tariffs on canned tuna were raised, in some cases by as much as 25 per cent. This had a considerable effect on the price strategy of the companies operating in those regions.

Economic

In 2022, the canned tuna market was influenced by the high cost of raw materials, especially due to inflationary pressures. Price increases were driven by disruptions to the supply chain and by rising demand in emerging markets. The world’s inflation rate reached 7.4 per cent in 2022, reducing consumers’ purchasing power and shifting their buying habits to more affordable sources of protein. In this economic climate, many canned tuna producers sought to reduce costs by introducing more efficient production processes and by reducing the cost of raw materials.

Social

In 2022, the trend toward healthy eating had become a real trend. Sixty-five percent of the surveyed consumers indicated a preference for low-fat, high-protein foods. This trend was particularly favored by the millennials and the generation Z. Tuna, a rich source of high-quality protein, was the winner in the millennial and generation Z categories. The consumers of the tuna cans are increasingly demanding sustainable and eco-labelled products, with 58% of consumers willing to pay more for tuna with an eco-label. In order to meet these changing social attitudes, tuna producers are increasingly focusing on the transparency of their production methods and on the communication of their responsible attitude to the environment.

Technological

In 2022, the tuna market was undergoing a technological revolution, with the adoption of new methods of processing, which improved the quality and shelf life of the products. In the case of canned tuna, companies invested around fifty million dollars in a new canning process, which preserved more nutrients and flavour. Also, the traceability and transparency of the supply chain were increasingly in use, with the use of systems such as the block-chain, which allowed around thirty per cent of the major brands to track the origins of their tuna. This technological revolution was accompanied by the increasing demand for food traceability from consumers.

Legal

The legal framework governing the tuna market in 2022 was shaped by a series of international agreements designed to promote the sustainable use of fisheries. In its report, the Food and Agriculture Organization of the United Nations stated that a total of 79 countries involved in tuna fishing had adopted regulations that conformed to the FAO’s principles for responsible fisheries. Moreover, the laws governing labeling had become stricter, and fines for mislabeling reached up to a million dollars in some countries. These legal developments meant that companies had to invest in compliance to avoid heavy fines and to maintain the trust of consumers.

Environmental

In 2022, the principal cause of concern for the canned tuna market was overfishing and the effect of this overfishing on the marine environment. The news reports stated that 60% of the world's tuna populations were overfished or fully exploited. Consequently, many companies began to adopt sustainable fishing practices, and 45% of canned tuna brands obtained certification from the Marine Stewardship Council. Moreover, the industry was under pressure to reduce its carbon footprint and, in five years, to reduce its greenhouse gas emissions by 20%.

Porter's Five Forces

Threat of New Entrants

The barriers to entry in the tuna market are moderate, involving as they do, among other things, government regulations, the cost of production, and the established brand loyalty of consumers. However, the new entrants would have to overcome the powerful presence of the old ones, and they would have to find a way to find sustainable tuna.

Bargaining Power of Suppliers

Suppliers’ bargaining power in the market for canned tuna is relatively low because of the abundance of raw materials. Suppliers can obtain tuna from various fisheries in various parts of the world. Although concerns about the sustainability of the fisheries are growing, the supply is abundant enough to allow manufacturers to negotiate favorable terms.

Bargaining Power of Buyers

The buyers of tuna in tins have considerable power, because of the large number of brands and products available. This means that they can easily change from one brand to another, depending on price, quality and practices in terms of sustainable development, which puts pressure on companies to remain competitive in terms of price and products.

Threat of Substitutes

The threat of substitutes for canned tuna is moderate, since consumers have various alternatives, such as fresh fish, other canned fish, and vegetable sources of animal-like nutrients. Although canned tuna is still popular, the growing trend towards healthier and more sustainable diets may encourage consumers to try other foods.

Competitive Rivalry

The competition in the market for canned tuna is fierce, with many established brands fighting for market share. Price, quality, brand reputation, and a commitment to sustainable production practices are the most important elements in the competition. Private labels and the constant development of new products also increase the intensity of the competition.

SWOT Analysis

Strengths

• High protein content and nutritional value appeal to health-conscious consumers.
• Long shelf life makes canned tuna a convenient food option.
• Established brand loyalty among consumers for well-known canned tuna brands.
• Versatile product that can be used in various recipes and meal preparations.

Weaknesses

• Perception of canned tuna as a lower-quality product compared to fresh seafood.
• Concerns over mercury levels and sustainability of tuna fishing practices.
• Limited product differentiation among brands leading to price competition.
• Potential for negative consumer sentiment due to environmental issues.

Opportunities

• Growing demand for convenient and ready-to-eat meal options.
• Expansion into new markets and regions with increasing seafood consumption.
• Development of innovative flavors and product lines to attract younger consumers.
• Partnerships with health and wellness brands to promote the nutritional benefits.

Threats

• Increasing regulations on fishing practices and sustainability standards.
• Rising competition from alternative protein sources and plant-based products.
• Fluctuations in raw material prices due to overfishing and environmental changes.
• Economic downturns affecting consumer spending on premium canned products.

Summary

Canned tuna will continue to grow in the future, mainly due to its convenience and nutritional value. But it also suffers from a few weaknesses in terms of quality and the environment. Opportunities for growth lie in expanding into new markets and innovating new products. The threat of regulatory changes and competition from alternative sources of protein could affect the market's development. Product differentiation and sustainable development are the key strategic factors for maintaining market position.