Azalea Seafood Gumbo Shoppe

Essay by jackback277A+, March 2004

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1.What is competition like in the value added seafood industry? Companies use either their own staff to market and sell products to grocers and restaurants. Producers also use a variety of independent contractors to sell their products for them (15%-20%). A lot of consolidation has taken place reducing food brokers from 2,500 to 200 in ten years. Most of the consolidations include food producers and food retailers merging together. Small brokers can deliver promising results in limited regions but with great focus. Large brokers and retailers have better control over inventory and retail data.

a. What competitive forces seem to have the greatest effect of the industry attractiveness (from the standpoint of the packaged seafood producers)? The ability to produce large quantities of a product. The need to comply with the FDA, USDA, and to comply with other health standards. If a product is bad, then not only will the reputation of Azalea's be at stake, but also the reputation of the retailer.

2.How is the packaged foods industry changing? There is a large amount of consolidation taking place, and with the consolidation the large food manufacturers and distributors are able to control food brokers better. Food brokers must provide more services than they used to in the past.

a.What are the underlying drivers of change? Consolidation of global food companies.

b.How might those driving forces individually and collectively change the competition in the industry? The food companies have more control over the distribution and sale of their products. Large food companies will carry more weight than smaller companies.

3. What key factors determine the success of a packaged food producer? The ability to create a product that sells over large food producer products. The ability to market and/or find a good food broker that caters...