LATVIA
Karavela’s new line of products is aimed at western tastes
Successfully catering to markets in both west and east One of Latvia’s largest fish canning companies, Karavela, decided a couple of years ago to invest in production installations for canned fish intended for western markets. The move to diversify markets although questioned by many at the time has since proved to be prescient as developments in the Ukraine have shown.
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atvia has a long history of catching fish thanks to its 500 km long coast along the Baltic Sea. Since the end of the nineteenth century catches of pelagic fish, herring and sprats, from the Baltic Sea and the Gulf of Riga have been processed into canned fish. In fact, Gulf of Riga sprats smoked first on alder wood and then canned have a long standing international reputation. Over the years the canning industry in Latvia has consolidated as companies have closed down or have merged with others. More recently, concerns about quality have led to the formation of an association of canned sprat manufacturers, who are committed to maintaining certain minimum standards for the product. Only the handful of companies that fulfil the requirements of the association can use the coveted “Riga Sprats in Oil” logo on their products. However, canned sprats under different logos and brands are also produced by companies that are not members of the association, including by one of the biggest producers of canned products, the company Karavela.
Well-known brand stems from Danish start-up Karavela is best known for its Kaija brand of canned products. The word Kaija means seagull and the 32
Eurofish Magazine 3 / 2014
brand was acquired when Karavela in 2002 bought a 120 year old canning company that had been started in Riga by a Dane, Arnold Sørensen. Kaija had been producing not only canned fish, but also canned meats, vegetables, and fruits, and by the mid-80s was exporting its production to all around the former Soviet Union. During the political and economic changes in the 90s the company was privatised and finally taken over by Karavela. Andris Bite and Janis Endele, the directors of Karavela recognised that Kaija was a valuable brand for their markets in the CIS countries and that the name Arnold Sørensen could provide a foothold into markets in Scandinavia. Over 2011 and 2012 Karavela went through a series of upgrades as two new lines were installed, one to process mackerel products for sale on the Scandinavian market and the other to smoke sprats and herring (kippers). Although smoked sprats is a traditional product from Latvia, for Karavela it is only a small part of the production and we make them mainly to be able to offer clients a complete assortment, says Sanita Legajeva, the private label manager. With the new lines the company has succeeded in entering the
The brand Arnold Sørensen, the name of the Danish founder of a canning factory in Riga, is being used to sell canned mackerel in Danish supermarkets.
Scandinavian market and is now a player of some significance there.
Major differences between western and eastern markets Producing for markets in the west has been a steep learning experience, says Ms Legajeva, as the difference between eastern Europe, where we have been selling our products for years, and western Europe, are so marked. Tastes, business cultures, branding strategies, consumer attitudes to canned products, everything she found was quite different in the two markets. For example, in Scandinavia the range of canned fish products
is fairly limited, whereas in the east one can get a huge variety of fish products in cans. When Karavela ships a truck load of product to the east there might be 60 different products in the truck, while if the truck’s destination was in the west, there would probably be two products. In the east consumers are prepared to pay more for a brand that they know and trust, while this is not necessary the case in the west. Although efforts to diversify into western markets started only a couple of years ago, today about half the total production is intended for these markets. Latvian fish canneries have been selling their products to Russia, the www.eurofishmagazine.com