ty seafood market. Ironically, one of the barriers to entry for larger companies such as Kraft Foods involves the fragmentary nature of the specialty seafood industry and the difficulty in justifying the addition of any new product that cannot generate a relatively high minimum annual sales volume.
Specialty seafood manufacturers are often in cutthroat competition with each other for placement in supermarkets and other retail establishments. Retail outlets have only a limited amount of shelf space meaning they will stock only a limited number of items. Equally important, only certain locations within a store are considered to be prime locations for display of packaged seafood products. Not only are companies like Azelea Seafood Gumbo Shoppe competing to be on the shelves, these companies are competing for this prime shelf space. Thus, one of the barriers to entry for specialty food manufacturers is attracting the interest of retailers and distributors in a new product.
2. The packaged foods industry is changing in a number of ways. The biggest change can broadly described as consolidation. Major food producers such as Kraft Foods are buying up smaller competitors in order to expand their range of products, and to enjoy the additional benefits of economies of scale in their manufacturing, marketing, storage and distribution processes. At the same time, a consolidation is occurring in the number of retail outlets that carry specialty packaged food including seafood products. This is not to suggest that there are significantly fewer retail outlets. Instead, smaller supermarket chains are being acquired by larger chains, just as smaller restaurant chains are being acquired by larger chains. Local so-called 'mom and pop' corner grocery stores are disappearing as a result of price competition from larger supermarket chains able to capitalize on their buying power to extract price concessions from suppliers while at the same ...