Assignment 1. The value added seafood industry includes any type of packaged food item with seafood as an ingredient. Value added seafood products are sold in restaurants, supermarkets, and other types of food retailers. Value added seafood is considered a specialty food product. There are more than 15,000 companies that provide specialty products to the U.S. food service industry. The food service industry includes restaurants, specialty food retailers, supermarkets and other retail outlets as well as food distributors or wholesalers.
The biggest change in the competitive arena for value added seafood industry involves competition from large, multi-national food companies including Kraft Foods, NestlT and Unilever. These large food companies continue to acquire smaller companies in order to fill what these companies see as gaps in their product lines. Seafood is becoming a more popular and more important part of the American diet. This is partly because of taste, and partly because seafood is considered to be healthier than red meat and other sources of protein because of its low fat content. As a result, companies such as Kraft Foods are beginning to look more seriously at opportunities to penetrate the specialty seafood business. These food manufacturing giants want to increase market share in order to gain additional economies of scale when manufacturing products for distribution to supermarket distribution centers and food wholesalers.
One of the factors influencing competition in the value added seafood industry are barriers to entry. Since companies are manufacturing food products, they are subject to regulatory oversight by the Food and Drug Administration. Since seafood can spoil if not cooked and stored properly, a substantial investment in food processing and storage equipment is required to become a manufacturer. Therefore, small companies are at a serious disadvantage when considering entering the special...