SeafoodSeafoodMarkets & TrendsMarkets & Trends

John PollockDirector of Merchandising - Seafood

SYSCO CorporationHouston, Texas, USA

U.S. EconomyU.S. Economy% change vs. prior year% change vs. prior year

-0.50%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

CPI - All Goods CPI - Food at Home CPI - Food Away from

Home

Aug

Sep

Oct

Nov

Source: Technomic

Meals PreparedMeals PreparedAway From HomeAway From Home

35

40

45

50

55

60

65

72

73

74

75

76

77

78

79

80

81

82

83

84

85

86

87

88

89

90

91

92

93

94

95

96

97

98

99

00

01

02

*

% of each food dollar to Retail% of each food dollar to Foodservice

50.2%

49.8%

Source: Technomic* Projected

CY02Projection

2002 2003

• Restaurants and Bars 3.4% 3.7%• Retails Hosts 2.5% 2.5%• Travel & Leisure -4.0% -0.7%• Business & Industry -2.0% 0.0%• Education 2.8% 2.5%• Healthcare 0.3% 0.4%• All Other 2.4% 2.5%

• Total Foodservice 2.4% 3.0%

Segment Growth ForecastSegment Growth Forecast% nominal growth% nominal growth

33%Increase

!

• Thinking out of the box

Practical ExercisePractical Exercise

Is the glass half full or half empty?

Maybe it is simply the wrong size!

• Customers are looking for true Value- Added benefits– Labor savings

• Peeled, cooked, deveined, etc.

– Waste / shrink control• IQF, portion control, re-sealable containers, etc.

– Unique recipe ideas• Flavors, breading/batter, presentation, etc.

Current Situation and TrendsCurrent Situation and Trends

• Still significant sub-standard product sold– Mislabeled– Short-weight– Count not in range– Poor quality

• Toughest competition is not seafood– Poultry & Pork prices are lowest in 10 years– Beef prices are significantly lower over past 18 months– Politicians attempting to protect their constituents

through political rather than scientific trade restraints

Current Situation and TrendsCurrent Situation and Trends

• Questionable application of regulations– California Prop 65

– State imposed trade restraints different than FDA (Louisiana chloramphenicol statute)

“Nearly all fish and seafood contain some amount of mercury and related compounds . . .”

Current Situation and TrendsCurrent Situation and Trends

• Abuse of trade laws with no true industry benefit– Crawfish– Atlantic Salmon– Blue Crab– Domestic Catfish– Domestic Shrimp

Current Situation and TrendsCurrent Situation and Trends

• Press sends mixed / confusing messages

Current Situation and TrendsCurrent Situation and Trends

PeTA.com

E Magazine

BusinessWeek January 27, 2003

TIME Mother Jones EPA February 2003

Current Situation and TrendsCurrent Situation and Trends

• Proliferation of third party regulators

• Encourage responsible fishing practices – Promote sustainable & renewable resources– Conduct business with reputable companies– Resist the temptation of short-term economic gain

• Vigorously extol the benefits of all seafood– Do not promote one sector as better than another– Consumers look at the industry as a whole, any

defamation implicates all of us

• Promote free and open trade

• Listen to your customers

Bringing Seafood to MarketBringing Seafood to Market

QuestionsQuestions??