Tinplate + Money Factor = A Competitive Advantage ?

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Tinplate + Money Factor = A Competitive Advantage ?
By Henk Brus (August 24, 01)

I am a great fan of Spanish canned tuna. Every year when I spend my two weeks vacation in Spain, I enjoy eating "Atun Blanco en aceite de oliva". This is probably the greatest tasting canned tuna product in the world. This product has it all, great taste and texture, with some help from the smooth olive oil ! But we usually get problems in the family when my tuna-loving wife and kids also want a bite... the tins are SO small ! In Spain canned tuna processors nowadays can the majority of their tuna in very small tins of 120, 100 or 80 grams. When you drain a solid packed tin of "Atuna Claro" of 80g (RO 80) , you get 52 grams of very firm yellowfin meat. When you compare that with a tin of imported solid pack tuna in German or French supermarkets of 150 gram drained weight, indeed the quantity of tuna in those tins is more fit to share with the family !

I have always been fascinated by the phenomenon that all over the world people tend to consume canned tuna from 6,5oz or 185grams tins. But in Spain, with the worlds highest consumption of canned tuna per capita, they have the smallest, tiniest tins. Why would heavy users like the Spanish consumers prefer to buy tins with only 52 grams, and open up 3 or 4 tins to eat some tuna with the family, instead of opening one larger tin. That seem to be much cheaper to them, so why does Spain stick to these baby tins, which are mostly sold in 3-packs ? Strolling through Spanish hypermarkets it becomes an even greater mystery when you see the huge amount of shelf space for canned tuna. In Spain unlike some other European countries, the local industry actively promotes its product, and demands the interest of the consumer. But why then do these people only want 80 grams net weight tins, filled only with 52 grams of tuna, when probably 60 grams would still easily fit in the same tin ?

When checking the origin of the product in the shelves, you do another unique discovery. Unlike any other European country, in Spain almost all tuna offered on the shelves is produced domestically. While all other European countries import from all over the world, Spain has been able to keep its doors shut ! Spanish processors rule the market, and you will not find a single 80gram tin from Ivory Coast, Senegal, Ecuador or Seychelles. As a tuna business man, you wonder : How do these packers do it, what is their secret ? Sure, they promote their tuna brands a lot, and they have the best processing technology. But then they have to import all their raw tuna or loins from elsewhere and their labor costs are much higher. How do they do it ? I needed to provide myself a satisfactory answer to that question.

When one day I spotted a 33,5oz !!!! tuna tin from Ecuador !!! it finally all fell in place. Since then I call it the "Tinplate + Money factor". It provides me finally with a logical explanation on why these cans are so tiny, and why consumers do not get bigger ones. At the same time I understood why no low cost tuna producers from Africa were able to break in the Spanish consumer market....

By keeping the tins so small, and the drained weight so low, the Spanish industry has created the "Tinplate factor". When you fill tuna in a tin of 225g of gross- /185g net weight, and pack on 150 grams drained weight, tuna is 67% of total weight, and the tinplate almost 18%. But when you analyze 80 grams net weight tin with 108 grams gross weight and 52 grams drained weight, you get totally different numbers. Tinplate is 26% of the total weight and the tuna meat only 48%, the rest is oil ! That's why big tins come from Ecuador ! It looks like the Spanish canning industry has created a significant competitive advantage this way. That advantage comes from the fact that tinplate is something most tuna canning nations around the world have to import. First they have to ship the steelplate in sheets from Europe or Japan, make tins, and ship the tins back filled with tuna to Europe. This round-trip for the tinplate, is very expensive in shipping costs. It becomes even more expensive when the final product has a low "tuna ratio". Those costs are saved mostly by the Spanish canners who have a large European/ French steel industry close by. By putting less tuna meat in the tins, the tinplate becomes an even more important cost factor, and competitive advantage.

If you combine this theory with the "Money factor", it makes even more sense. By buying pre-cooked frozen tuna loins, the high labor cots due to the intensive cleaning process within the cannery are brought back to the minimum. This way you save a lot of high labor costs, and when your suppliers provide the industry 60 days of financing, you can have the canned loins in the supermarket before you have to pay them. In Spain the road to the supermarkets is short. The time span between the actual canning and supermarket delivery can be maximum 2 weeks, which cuts the time for financing the ready product drastically. If you then take into account that many canners sell to the retailers directly, cutting out middlemen, extra storage and trucking costs, the picture is becoming quite complete. This is also why Spanish canners are able to provide 60 days ( or more) financing to their customers, and keep all other tuna exporters out-of the-door !!

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