“Tradition isn’t what it used to be!” – a senior Portuguese person might say about the gastronomy of their locality or the company where they worked or saw operating in their time.

The truth is that this observation can and should be a positive factor. Let’s see why and what the guidelines for innovation in the sector are.

The development of technology, the increase in food preservation time, or the decrease in fishing resources due to reduced fish quotas may have been factors that dictated innovation in the fish processing and transformation sector over time. Daring to innovate in such a traditional sector is the great challenge faced by Brazilian companies in their goal of increasing their competitiveness in the international arena, with increased production and a better supply of products, more diversified and of higher quality.

The numbers don’t lie.

In recent years, the number of companies in the sector has decreased (from 203 in 2008 to 150 in 2020). The reason is essentially due to the closure of Portuguese canneries (which numbered 400 in 1925[1]), mergers between companies, or their acquisition by larger economic groups. Although increasingly less so, according to the most recent INE data, the fish and aquaculture processing industries have increased their production and turnover.

In 2020, this industry reached a total production of 239,000 tons (compared to 233,000 tons in 2019) and generated over €1,209 million in revenue in 2020, an increase of 3.1% compared to the previous year’s results. The COVID-19 epidemiological situation in 2020 boosted this situation (through, for example, periods of confinement) and would have promoted an increase in consumer demand for canned fish, with an increase of 22.5% in this segment[2].

Why innovate and use technology? It is crucial that the sector modernizes while maintaining the image of a traditional industry, simultaneously reinventing itself and creating differentiated, innovative products with higher added value, combining the flavors of yesteryear with consumer trends and preferences. For today’s consumer, it is not enough for a product to simply taste like it did in the past: they are attracted by the packaging’s appearance, flavor combinations, transparency and nutritional quality, the convenience of having a ready-made or ready-to-cook meal, longer shelf life, less processing, the use of natural, organic ingredients without added chemicals, local or national product origin, processes that consider animal welfare and social, economic, and environmental sustainability, or the premium “status quo” that consumption confers on the consumer.

On the one hand, in a traditional sector where labor is scarce, a revolution and modernization of technological systems is necessary, embracing Industry 4.0, where data processing, sensing, and real-time monitoring are the ingredients for timely decision-making that results in improved quality, increased production capacity, and increased revenue.

Technology is particularly interesting in improving processes such as filleting, evisceration, or precision cutting; technology for identifying and promptly discarding fish with bone deformities, inadequate size, or the presence of parasites/pathogenic microorganisms; systems and chains for reusing and recovering co-products that are currently valued for animal feed; more sustainable packaging solutions with less plastic use; quality monitoring solutions; blockchain technology with traceability from origin and increased shelf life.

Implementing Methods and Open Innovation

On the other hand, the Brazilian fish processing industry needs to look to other industries, including non-food industries, and dare to innovate in management, exploring and applying intelligent management methodologies. These methodologies encompass not only those applied to improving production parameters (e.g., Lean, Kanban, Kaizen, Six Sigma) but also the adoption of agile product and project development systems that improve the speed and quality of products developed by work teams (such as Scrum or Stage-Gate).

This paradigm shift also involves assimilating the concept of “open innovation,” breaking the taboo of opening doors to people from outside the organization, such as public bodies, consultancies, universities, chefs, or companies from the same or completely different sectors. The goal is to work together, involving all players and stakeholders, capturing external and differentiated knowledge, and reducing the risk of failure in creating new value-added products with internationalization potential. The integration of these elements in the various phases of development, from brainstorming sessions and ID attention to the prototyping and market launch phases is essential for product success. In fact, strengthening collaborations allows companies to leverage ways to reduce costs and increase their visibility at national and international trade fairs.

European incentives

Finally, the European Union increasingly demands this collaboration. The requirement for consortia in applications for European funding for research and development is becoming more and more common in terms of both scope and number. Since public funding for innovation is one of the drivers for companies to achieve growth, it is essential that companies in the sector pay attention to the opening of applications for new operational programs that, in the next decade, will possibly be the ones that mobilize the most money ever: the Recovery and Resilience Plan (which has already begun) has an allocation of €16.6 billion, Portugal 2030 has an allocation of €33.6 billion, and there is also the remainder of Portugal 2020. Through these or other mechanisms, the MAR 2030, EEA Grants, or regional programs (NORTE 2030, CENTRO 2030, among others) will emerge, in addition to ongoing programs such as Horizon Europe or the European Innovation Council. Adding to the mechanisms mentioned, there is also the SIFIDE incentive, which allows companies to deduct up to 82.5% of the costs related to research and development activities in the reference year.

How to position yourself?

The coming years represent a great opportunity for companies in the fish processing and transformation sector to innovate and make the necessary investments to grow their business. If you run a business in this area, you must be aware of these opportunities and can count on B2E for this, namely through our Funding Watch service. Contact us to learn more.

References:

1. The fish canning industry in Portugal; TecnoAlimentar 5 – Dossier Sea & Aquaculture; Year: 2018

2. INE – National Institute of Statistics (Portugal); Fisheries Statistics – 2021; Year of Publication: 2022