Friedrichs starts selling salmon via Amazon

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German salmon processor and smokehouse Gottlieb Friedrich has quite a heritage. Founded in 1908 at the Harbour of Hamburg, the company can look back on a long tradition of salmon smoking.

The company was owned by the Friedrichs family up to 2013, when it was bought by German businessman Horst-Otto Gerberding, says CEO Alexander von Reisswitz. “Gerberding is 100 percent owner, so we are still family owned. That gives us the chance to focus on long-term targets, instead of quarterly results.”

It’s a lucky development for the company, he believes. “We could also have been sold to a private equity fund. This is a tough business, with lots of pressure in the market. You need an owner that gives you the time to execute your business plan properly.”

Highest prices in retail
In 2003 Friedrichs built a new headquarter in a different part of Hamburg, and right now, Friedrichs has a processing factory in Waren, Eastern Germany , and in Doble, Poland. The company employs 400 people, 150 in both Poland and East Germany, and 100 at the head office and warehouse in Hamburg, from where the shipping takes place.

The factory in Waren is specialised in cold smoking, the one in Doble, hot smoking. “But both factories are flexible and the production interchangeable, so in case of high volumes both locations can be used,” says Von Reisswitz.”

Alexander von Reisswitz. credit: Friedrichs

At the moment, Poland and Waren are running at 100 percent, plus Saturdays, and hiring lots of extra workers. “Christmas is crucial for us. It’s the most important and most busy time of the year, at which we produce about20 to 25 percent of our total volume.”

Friedrichs is in an exceptional position in Germany, says Von Reisswitz. “We are the only German salmon brand that is growing at this time, both in volume and value. Our revenue for this year — our business year ends at the end of June — has increased by  73 million euro, a growth of 31 percent compared to last year.”

 

Volume growth for Friedrichs was 15.6 percent, compared to a German retail market decreasing overall by 8,4 percent in the first half of 2017. They’ve achieved an revenue growth of 8,6 percent  on higher salmon prices.

Business strategy
This is quite a new development, says Von Reisswitz. “In the past we really had tough times. In 2015 we realised we needed to make changes, to be able to survive. So we changed our internal processes and IT.”

salting. credit: Friedrichs

“We also did extensive market research, with a large group of frequent salmon buyers, asking them about key buying factors. We learned a lot from that. We knew a lot about fish, but we wanted to focus more on the consumers’ needs.”

It led to the relaunch of a new brand, a new packaging design and a different marketing strategy. “We learned that Friedrichs is seen as a premium brand, and that is how we position ourselves. We have the highest prices in retail, and are linked to high quality. That is also why we need our own factories. This wouldn’t be possible with production at third parties.”

German retail models
Friedrichs also changed the way it dealt with supermarkets. “We have a dedicated group of sales agents, and intensified the contact between sales agents and supermarkets. We also changed the contracts, to realize higher revenues.”

German supermarkets have two trade models, Von Reisswitz explains. “60 percent of German supermarkets are owned by big concerns, who decide about purchase and pricing. But 40 percent is owned by independent shop owners, who are entrepreneurs with their own staff. This is the case with for example Edeka and Rewe supermarkets. So it’s much more important to convince those owners, because they are decision makers . You need a story to convince them, and a strong sales team to visit them.”

Another important business tool for the company is buying purchase data from data research agency Nielsen. “Nielsen provides cash data from outlets. We can see exactly what our own sales developments are, and we see what the competition is doing. We are getting a nice feedback from that. As mentioned before, the overall market is losing volume, were as our company is growing in both volume and value. A clear sign that our new strategy is working.”

Smoking salmon at Friedrichs, credit: Andre Nikolaus/Fischmagazin

Do you have a lot of competition in Germany?

“Honestly, there is none. The only two premium brands in Germany are ours. Because we are our own niche, there are no competitors, really. The German market is divided in producers for the discounters and private label for supermarkets, like Laschinger and Krone, who produce on a large scale and therefore their products can be sold at prices like 200 grams for EUR4.29. For 100 grams of our salmon, you would have to pay around EUR4,99. We are not able to produce a price value product for Aldi or Lidl, because of our production process. And we don’t want to. The only two producers that are more or less in our niche are Wechsler and Abrahams, but they are a lot smaller then we are.”

Amazon.com
Recently, Friedrichs started selling salmon via Amazon.com. No risks involved there? “Actually we are selling our products to them, they then sell them and take the risk. It’s like shipping products to for example Edeka. We ship it to their chilled warehouse. They work very seriously with this, taking care of the right temperature, so there is no higher food safety risk involved.”

“We choose our partners with food safety in mind,” he continues. “Only if we are sure, the partner can handle our products the right way, do we step in.”

The future looks bright, for Friedrichs. “We will continue to sell fish, with a clear plan: we remain focussed on premium, and MSC certification of wild catch. We will not enter the (low-) price segment, but want to grow in the German and also foreign premium markets.”

“We now ship our salmon to about 30 foreign markets, mainly in continental Europe, with Austria and Switzerland as the most important countries, but we see a lot of potential in the Far and Middle East.”