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US supply and demand for North American aquaculture products

US supply and demand for North American aquaculture products

BY Joe Sabbagh September 14, 2016

(Excerpts)
The world has a growing demand for animal protein that many investors and inventors are looking to satisfy through aquaculture.

Seafood per capita in the US peaked at 16.6 lbs in 2004 and has trended down to 14.6 lbs in 2014 since then. This is due to a few factors, one of which is the consumers’ negative perception of aquaculture. Thankfully over the last seven years perception of aquaculture has improved as the industry made progress in addressing product quality and sustainability. But while perception has improved over the last few years, high-end educated consumers that can afford high quality aquaculture products will, too often, still prefer wild catch. Many investors overestimate the number of people that are willing to pay for sustainable aquaculture. A large percentage of younger consumers are moving to a plant-based diet, a trend that hurts all animalprotein sales. Data on high-end, all-natural grocery industry show there are only certain markets that will pay high premiums for food and those consumers are well served.


Quantitative and qualitative considerations

Just because you can grow a fish sustainably does not mean you can sell it at prices and volumes to sustain your business.

My comments are focused on selling the production from a farm. If your project is based on growing fish or shellfish to sell as opposed to ancillary sectors  such as feed, pharmaceuticals, equipment or technology, you must understand you are now in the seafood industry and subject to the issues inherent in that sector. Unlike these ancillary services, your profit will be made dollar by dollar every day and there will be little chance of sustaining the business, and little chance of overnight windfall profits or finding investors if there is no documented history of profits.
The selling of fish and seafood has been and will continue to be a high-risk low-margin business that is subject to the laws of supply and demand. Well-funded stakeholder passion for offering sustainable local, all-natural product will not be enough if you fail to accept and address the nature of the business.

 

Imports are not the enemy

One must objectively analyze the effect imports have on your species. In general, outside of salmon, imports have only a minimal impact on farmers of US and Canadian species. If the US banned all frozen imported farmed catfish and swai, I believe the US catfish growers would see only a minimal increase in sales volume because those buying cheaper imports may not be able to afford the higher priced domestic fish. They may switch to other frozen fish or chose the cheaper poultry or pork. I will provide more information by species in later articles.

 

Price: the main driver

To be successful, an aquaculture company must look at all protein alternatives to understand its true position in the minds of customers. Assessing the market can be as simple as reading the grocery ads in your mail box or online, scrutinizing restaurant menus, or looking at a seafood distributor’s price list. Major players in the grocery and food service industry toss the terms “local” and “sustainable” in their ads. Often, assurances made at a customer’s HQ that does not equate to purchase orders or filter down to those that are being held accountable for a profit and loss at the store or kitchen level.

 

Aquaculture offers opportunities for many

Those interested in profit or philanthropy have many opportunities to reach their goals if they consider the aforementioned market realities.

Full Article at ANA

 

 

  .: More Other Aquaculture Articles :.  
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