Howard M. Johnson. Howard M. Johnson. Shellfish Marketing Agenda The view from 30,000 feet. Market Opportunities For Shellfish Aquaculture

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1 Market Opportunities For Shellfish Aquaculture Shellfish Aquaculture Conference Anchorage, Alaska December 3, 24 Howard M. Johnson H.M. Johnson & Associates Howard M. Johnson years in the seafood industry 15+ years in seafood consulting and market research Shellfish Marketing Agenda The view from 3, feet World seafood supply demand trends Forecast world demand Japan China Europe United States World cultured shellfish production U.S. shellfish culture issues/opportunities Marketing opportunities for Alaska 1

2 Forecast World Seafood Demand Million Tons 32 Million Tons Source: Int l Food Policy Research Inst. Japan Million Metric Tons Japanese Seafood Supply Trending Lower 4 2 Imports Aquaculture Fisheries e 2

3 Japan: Supply/Demand Trends Japanese population approaching zero growth will then shrink Per capita seafood consumption declining Household seafood spending declining Still a major shellfish importer 18,77 MT of clams in 23 8,192 MT of oysters Japan 22 A Shrinking Market Million Tons Round Weight 2 22 China 3

4 Million Metric Tons China Seafood Supply Imports Aquaculture Fisheries e China 22 Strong Future Demand Million Tons 18 Million Tons Total Additional Tons Required 22 Source: International Food Policy Research Institute China s s urban households consume less staple food and more poultry, seafood, oils and dairy products Food Item Grain Vegetables Red Meat Poultry and Eggs Fish and Shrimp Vegetable Oil Dairy Products Refrigerators owned per 1 households Pound Per Capita Number Source: China Statistical Yearbook 4

5 China s s rural households still rely on staples Food Item Grain Vegetables Red Meat Poultry and Eggs Fish and Shrimp Vegetable Oil Dairy Products Refrigerators owned per 1 households Source: China Statistical Yearbook Rural Residents Pounds Per Capita (21) Number (21) Urban Residents China: Supply Trends Zero growth policy for coastal fishing Aquaculture production will continue to increase sharply, primarily in fresh fish species China will need to import more seafood to sustain demand Entry into WTO will end tariffs by 27 China: Demand Trends Urban consumer market increasing Growth (and consolidation) of retail Growth in middle class (with disposable income) Demand for upscale seafoods Shrimp Lobster Live fish 5

6 Europe European* Seafood Supply Million Metric Tons Net Imports Aquaculture Fisheries p *EU 15 + Iceland and Norway (Trade + product weight) Forecast European Demand Million Tons Round Weight 1.3 Million Tons EU15 + Norway & Iceland EU+1 6

7 World Shellfish Culture World Cultured Oyster Production Metric Tons Live Weight 4,5, 4,, 3,5, 3,, 2,5, 2,, 1,5, 1,, 5, Source: FAO FishStat World Cultured Clam Production Metric Tons Live Weight 4,, 3,5, 3,, 2,5, 2,, 1,5, 1,, 5, Source: FAO FishStat 7

8 World Cultured Mussel Production Metric Tons Live Weight 1,6, 1,4, 1,2, 1,, 8, 6, 4, 2, Source: FAO FishStat World Cultured Scallop Production Metric Tons 1,4, 1,2, 1,, 8, 6, 4, 2, Source: FAO FishStat U.S. Shellfish Market 8

9 U.S. Cultured Shellfish Production Metric Tons Live Weight Oysters Blue mussel Clams Source: FAO U.S. Molluscan Aquaculture Strengths Farmed mollusks are ocean friendly Farmed Mollusks Rate High with Environmental Groups Blue Ocean Institute Farmed clams, mussels, oysters and bay scallops top choice. Monterey Bay Aquarium Farmed clams, oysters and mussels best choice. Environmental Defense Farmed abalone, clams, mussels and oysters best choices. 9

10 U.S. Molluscan Aquaculture Strengths Farmed mollusks are ocean friendly Mollusks have good nutritional profiles Mollusk prices are generally stable U.S. Molluscan Aquaculture Weaknesses Negative publicity regarding toxins Strong reliance on ethnic markets Some growing areas anti-aquaculture or polluted Some products not consumer friendly Production data not readily available U.S. Molluscan Aquaculture Opportunities U.S. Seafood market is growing 1

11 Top 1 Seafoods Consumed Aquaculture now driving consumption Canned Tuna 3.5 Lbs Shrimp 2.4 Cod 1.71 Alaska Pollock 1.18 Flatfish.619 Clams.612 Catfish.6 Salmon.433 Crab Lbs Scallops.314 Shrimp 4. Lbs Canned Tuna 3.4 Salmon 2.22 Alaska Pollock 1.71 Catfish 1.14 Cod.64 Crab.61 Tilapia.54 Clams.53 Scallops.33 Source: National Fisheries Institute from NMFS data Lbs % Change +66.7% -2.8% % +44.9% +9.% % +86.5% n -13.4% +5.1% U.S. Population 195 Versus Million Americans Over Age 6 by 22 % of Population Age Group Protein Consumption 2 vs 22 Per Capita Beef, Pork Consumption Drop Seafood Increases by 6.58 Percent Source: USDA ERS 11

12 Future U.S. Seafood Demand Population growth and changing demographics alone will require an additional 3.3 billion pounds (round wt.) by 22. Greater supply and low prices could push demand even higher Billion Pounds Round Weight Total Population Demographics U.S. Seafood Demand in 22 How much more supply needed? 2 Base Case + 22 Population + 22 Demographics + 22 Unlimited Supply 15 pounds per capita 15 pounds per capita 16 pounds per capita 2 pounds per capita 1.8 Billion Pound Increase 3.3 Billion Pound Increase 9 Billion Pound Increase Billion Pounds Round Weight U.S. Molluscan Aquaculture Opportunities U.S. Seafood market is growing Away-from-home seafood growth will outpace other proteins 12

13 Future U.S. Seafood Demand Growth in both Retail and Foodservice Seafood Poultry Pork Beef Away from home At home Source: USDA ERS Growth % 2 vs 22 U.S. Molluscan Aquaculture Opportunities U.S. Seafood market is growing Away-from-home seafood growth will outpace other proteins Good export markets U.S. Mollusk Exports 23 Clams 4565 $26,766 Oysters 2643 $12,99 Mussels $1, Metric Tons $' Abalone 192 $6,

14 U.S. Molluscan Aquaculture Opportunities U.S. Seafood market is growing Away-from-home seafood growth will outpace other proteins Good export markets Processing/packaging technology will provide added safety U.S. Oyster Consumption Pounds Per Capita (Edible Wt.) U.S. Oyster Market Reported U.S. per capita consumption.2 lbs 22 ex-farm value of $53.5 million Consumption likely under-reported 15% of consumers eat 85% of total* Average consumer male in coastal area* 1% drop in price raised demand by 25%* *University of Florida consumer survey 21 14

15 U.S. Clam Consumption Pounds Per Capita (Edible Weight) U.S. Clam Market Total U.S. consumption of 156 million pounds (edible weight) in reported cultured production of 1 million pounds (meat weight) Reported ex-farm value of $1 million Cultured geoduck a high-value export U.S. Scallop Consumption Pounds Per Capita Edible Wt Source: NMFS 15

16 Some Fearless Forecasts for Shellfish Growers Demand for oysters, mussels, clams and scallops will grow Technology applied to shellfish safety will mitigate trade/consumer fears Retail products will need to be case ready Central processing facilities need to achieve economies of scale Contract growers Co-op processing/marketing Conclusions Strong demand for seafood in general should help mollusks Mollusks are undermarketed Need new trial among younger population Niche markets, niche products (value- added) needed Alaska Shellfish Aquaculture Advantages/Opportunities Greater siting opportunities than lower 48 Unpolluted Fewer view issues Utilization of processing infrastructure Sales synergy with established companies Capitalize on Alaska and local branding 16

17 Alaska Shellfish Aquaculture Advantages/Opportunities Development of contract growing, co-op or integrated models Small-scale family businesses Become world leader in red crab culture Proximity to Asia via air cargo Alaska Shellfish Marketing Opportunities Local markets National markets Niche markets Export markets Take market share from Canada 17

18 Market Studies on the Net New Brunswick Oyster Aquaculture Industry Market Study Marketing Opportunities for Pacific Oysters PCSGA Study Clams Market Research Focus Group Report Thank you 18