The Role of Alaska s Seafood Industry in the Global Food Marketing System Quentin S.W. Fong Fishery Industrial Technology Center University of Alaska Fairbanks Kodiak
The Profit Triangle Benefit Creation Profit Competitive Advantage Internal Operations
Background: State of Alaska and Global Fisheries
MT (Millions) World Seafood Imports Source: FAO ROW Imports US Imports 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 Year
MT (Millions) World Fisheries Production by Method Source: FAO 180 Aquaculture Capture Total 160 140 120 100 80 60 40 20 0 Year
Billion USD U.S. Seafood Import, Export and Trade Balance Source: USDOC Import Export Deficit 30.00 25.00 20.00 15.00 10.00 5.00 0.00 Year
MT (Million) Alaska Share of U.S. Landings in Volume Source: USDOC U.S. Total AK 5.00 4.50 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00 Year
USD (Million) Alaska Share of U.S. Landings in Value Source: USDOC U.S. Total AK 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 Year
Alaska Commercial Species Landings by Percent Volume 2010 Total: 1.97 Million MT Source: USDOC Rockfishes Cod Pacific Sablefish Pollock Walleye Herring Flatfish Halibut Crab Salmon Other Groundfish 3% 2% 12% 17% 1% 2% 1% 13% 2% 45%
Alaska Commercial Landings by Percent Value 2010 Total: 1.6 Billion USD Source: USDOC Flatfish Other Groundfish Cod Pacific Pollock Walleye Other Shellfish Halibut Rockfishes Sablefish Crab Herring Salmon 32% 5% 2% 9% 18% 1% 1% 12% 6% 1% 13%
2007 U.S. Landings by Port (Top 20) Dutch Harbor-Unalaska, AK Reedville, VA Em pire-venice, LA Kodiak, AK Intracoastal City, LA Pascagoula-Moss Point, MS Cameron, LA Astoria, OR New Bedford, MA Los Angeles, CA Naknek-King Salm on, AK Cordova, AK Westport, WA Moss Landing, CA Gloucester, MA Port Huenem e-oxnard-ventura, CA Ketchikan, AK Petersburg, AK Sew ard, AK New port, OR 0 100 200 300 400 500 600 700 800 900 Pounds (Millions)
2007 US Landings by Port (Top 20) New Bedford, MA Dutch Harbor-Unalaska, AK Kodiak, AK Em pire-venice, LA Hampton Roads Area, VA Honolulu, HI Naknek-King Salm on, AK Cape May-Wildw ood, NJ Sew ard, AK Sitka, AK Cordova, AK Brow nsville-port Isabel, TX Homer, AK Gloucester, MA Intracoastal City, LA Petersburg, AK Key West, FL Galveston, TX Bayou La Batre, AL Port Arthur, TX 0 50 100 150 200 250 300 Dollars (Millions)
Estimated Workforce in the Alaska Seafood Industry 2006 Total: 56,606 Shore-based Harvesting Workforce At-Sea Harvesting Workforce Shore-based Processing Workforce At-Sea Processing Workforce 11% 3% 46% 40%
Seafood Industry Workforce Relative to Selected Industries, Alaska Statewide 2005 Category No. of Workers Percent Fish Harvesting 27,826 24% Seafood Processing 22,479 20% Other Manufacturing 7,338 6% Construction 38,556 34% Natural Resources 18,554 16% Total 114,753 100%
Marketing System Input and Facilitating Industries Retailer Grower And/or Harvester Primary Processor Further Processor And Manufacturer Wholesaler Consumer Regulatory Institutions Food Service Imports Exports
Marketing System Input and Facilitating Industries Retailer Grower And/or Harvester Primary Processor Further Processor And Manufacturer Wholesaler Consumer Regulatory Institutions Food Service Imports Exports
2010 Top 5 Food Marketing Companies in U.S. in Billions USD: Manufacturing Pepsico Inc. (36) Nestle (30) Kraft Foods Inc. (29) Tyson Foods (27) Anheuser-Busch (15)
Top Seafood Suppliers in North America 2010 Source: Seafood Business Rank Company Name HQ Sales ($Mil.) 1 Trident Seafoods Corp. Seattle 1,250 2 Bumble Bee Foods San Diego 960 3 Tri-Marine International Bellevue, WA 900 4 Thai Union International San Diego 825 5 Nippon Suisan USA Redmond, WA 740 6 Starkist Pittsburg 640 7 Highliner Foods Lunenburg, NS 602 8 Marine Harvest USA Miami 529 9 Beaver Street Fisheries Jacksonville 443 10 American Seafoods Group Seattle 431 Other with Significant Alaskan Presence 12 Icicle Seafoods Seattle 400 13 Ocean Beauty Seafoods Seattle 398 14 Aqua Star Seattle 390
Ocean Beauty Source: www.oceanbeauty.com Vertically Integrated: importing, manufacturing and distribution Species: Alaskan species plus imported such as yellowfin and albacore tuna, mahi-mahi, swordfish Distribution in Oregon, Washington, Utah and Texas Value Added Products e.g. hot and cold smoke salmon, salmon burgers, crab cakes, stuffed salmon, seafood sausages
Trident Seafoods Inc. Source: www.tridentseafoods.com Vertically Integrated: importing, manufacturing and harvesting Species: Alaskan species plus imported such as yellowfin tuna, mahi-mahi, swordfish, and tilapia Harvesting: 3 freighters, 10 tenders, 3 crabbers, 11 trawlers, 7 processing vessels, and 3 factory trawlers Value Added Products e.g. tempura shrimp, salmon burgers, shrimp wraps, oven-ready battered pollock etc.
Marketing System Input and Facilitating Industries Retailer Grower And/or Harvester Primary Processor Further Processor And Manufacturer Wholesaler Consumer Regulatory Institutions Food Service Imports Exports
Top 5 Food Marketing Companies in U.S. in Billions USD: Wholesalers Grocery (2008) Foodservice (2010) Supervalue ($41) Sysco Co. ($37.9) C&S Wholesale Grocers ($19.4) Wakefern Food Corp (9.9) Associated Wholesale Grocers ($5.7) Nash Finch ($4.2) U.S. Foodservice ($19.8) Performance Food Group ($10.2) Gordon Food Service ($6.8) Reinhart Foodservice ($3.6) Source: www.supermarketnews.com;
Marketing System Input and Facilitating Industries Retailer Grower And/or Harvester Primary Processor Further Processor And Manufacturer Wholesaler Consumer Regulatory Institutions Food Service Imports Exports
Number of Grocery Wholesale Companies and Establishments Source: USDOC No. of Establishments Grocery Wholesalers 1992 3,740 2009 2,627 % Change -29.76% No. of Companies 1992 3,133 2009 2,212 % Change -29.39%
Food Retailer s Profit Source: Food Marketing Institute A. Retailers Gross Margin Total Net Company Sales 100% Cost of Goods Sold 72.30% Gross Margin 27.70% B. Retailers Operating Cost Total Payroll 12.00% Employee Benefits 3.80% Property Rental 1.70% Depreciation and amortization 1.20% Utilities 1.30% Supplies 1.10% Maintenance and Repair 0.80% Taxes and licenses 0.30% Insurance 0.30% Other Operating Expenses 3.30% Total Operating Costs 25.90% Retailers Net Profit (A-B) 1.46%
Net Profit (% of Sales) 2 Food Retailer s Profit - Trend Source: Food Marketing Institute 1.8 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 Year
Percent Share of Food-at-Home Expenditure by Type of Grocery Outlet Source: USDA Traditional 1994 2005 Supermarket 59.2 58.2 Convenience 3.1 2.9 Other 16.6 3.6 Specialty Food 2.8 2.7 Total 81.7 67.4
Percent Share of Food-at-Home Expenditure by Type of Grocery Outlet Source: USDA Nontraditional 1994 2005 Supercenters & Warehouse Clubs 3.9 17.1 Mass Merchandisers 1.8 1.8 Other 9 8.7 Home Delivered & Mail Order 2.4 4 Total 17.1 31.6
Seafood Sales Breakdown by Product Form Source: Seafood Business 6% 2% 8% 40% 19% 25% Fresh never frozen Frozen Previously Frozen Value-added Live Other
2010 Top 5 Food Marketing Companies in U.S. in Billions USD: Retail Grocery Retailers Foodservice Wal-Mart Stores ($302) McDonald s Corp ($30.9) Kroger ($76.2) Subway ($10.0) Costco ($69.9) Burger King ($8.9) Safeway ($40.9) Wendy s ($8.4) Supervalue ($40.6) Starbuck s ($8.3) Source: Supermarket News
U.S. Restaurants
Restaurants
Restaurant - Malaysia
Restaurant - Chinese
Restaurants - Japan
U.S. Retail Pike s Market
U.S. Retail Pike s Market
U.S. Retail Wholefoods
U.S. Retail Wholefoods
U.S. Retail Wholefoods
Retail - China
Marketing System Input and Facilitating Industries Retailer Grower And/or Harvester Primary Processor Further Processor And Manufacturer Wholesaler Consumer Regulatory Institutions Food Service Imports Exports
Product Benefit Services Benefit Personnel Benefit Image Benefit Monetary Cost Time Cost Energy Cost Total Customer Benefit Total Customer Cost Determinants of Customer Benefit Customer Delivered Benefit Psychic Cost
Salmon Easy to Open Ease of Storage Information Aesthetic Easy to Handle and Prepare
Value-Added Sea Urchin Roe Japan
Frozen Geoduck Trunk China
Uni - Sea Urchin Roe Global
Frozen Half-Shell Oysters World
Baby Food Asia