reLAKSation 478
Storytime: Speaking at the recent Westminster Food and Nutrition Forum, Peter Hajipieris of Bird’s Eye Iglo told delegates that whilst the commercial success of aquacultures has come a long way in recent years; no-one is telling aquaculture’s story and fielding questions from the consumer.
According to Seafood source.com, Mr Hajipieris said that it is time that aquaculture found its own voice. This is because whilst Europe has one of the most advanced consumer markets, many Europeans outside the seafood industry are in the dark when it comes to understanding the overall importance of the aquaculture industry. He added this lack of aquaculture insight even extends to many of those involved in the fisheries sector.
We, at Callander McDowell, are not surprised about this ignorance of the aquaculture industry, especially amongst consumers. However, it is not because they are deliberately kept in the dark; they are just not interested. Although many of those reading this comment will disagree, most consumers are simply interested in whether the fish is the right price; that it looks good; that it tastes good and that it will not cause them any adverse ill-health, i.e. that it is safe to eat. Generally, most consumers are willing to put their trust in their retailer to stock only the best fish that they can get. Whether it is farmed or wild-caught is largely irrelevant. Of course, even we know consumers who do care where the fish come from; and that they are produced in the best possible manner but these consumers do not represent the majority. In many cases, what the consumer says about such concerns simply vanish when they are actually faced with making a buying decision. What they say and what they do are often two very different things.
That aquaculture has changed the face of fish supply is simply of little interest to consumers. If it were, this interest would be reflected in the media. But it isn’t. The reason why the aquaculture industry has not found a voice is because no-one is listening. Certainly, the media are not interested in good news stories. This is why the Aquaculture Information Bureau, that we have mention several times previously, lasted only a few months and why ‘Salmon of Europe’ failed to even get off the ground. ‘Salmon of the Americas is still active but does not seem to have been so active recently, probably reflecting the lower availability of Chilean salmon in the US marketplace.
The Scottish Government is currently engaged in a project to solicit consumer views to try to understand what consumers think of the Scottish aquaculture industry. The answers are predictable. They will just reflect the negative imagery disseminated by the environmental lobby. Rather than try to spread a positive message, it would be much better if the aquaculture industry started to fight back against the spread of such misleading and negative information. We will discuss this further in the next issue of reLAKSation.
As we mentioned, Mr Hajipieris indicated that ignorance of the aquaculture sector spreads right into the fisheries sector. This is not really unexpected since the only common factor between fisheries and aquaculture is the fish. Aquaculture is considered the ‘new boy on the block’ and something of an interloper. There is still a long way to go before aquaculture is accepted, let alone understood.
However, even those who are enlightened seemingly don’t yet fully understand the aquaculture industry. Mr Hajipieris told the delegates at the Forum that he disagreed with the common belief that the strong growth of the aquaculture industry is the result of the failings of the wild fisheries sector. He said that instead, the rise of the supermarket as a main retail source of fish has encouraged the development of the aquaculture industry. This is because aquaculture can supply the predictable and consistent requirements for price, quality and supply as well as safety that supermarkets want. Whilst there is no doubt that the supermarkets, more than most, have capitalised on aquaculture’s ability to keep the supermarkets supplied with fish; Mr Hajipieris is wrong. The modern western aquaculture industry’s meteoric rise can be clearly attributed to the decline in the wild catch.
Back in the 1960’s when companies like Unilever were looking at fish farming they did so because they could see a future shortfall in fish supply. As a result, they decided to invest in aquaculture. They reviewed a whole range of fish as potential candidate species including the most obvious, cod. The reason cod was not chosen as the fish to farm was that there were abundant supplies of cod in the sea and as a result the price of cod was low. The fledgling farming industry would have to be able to produce farmed cod at a low enough price to be able to match or even uncut wild supplies to make cod farming viable. This was unrealistic. Instead, the pioneering farmers chose to farm salmon. This was because salmon had a high market price and were in relative short supply. They had the added benefit that the eggs were large enough that when the fry hatched they could take manufactured feed, unlike most of the true marine fish which were so small that they would need to be fed on live food from the outset.
Salmon farming was a success because there was a consumer demand for the fish. Salmon had a luxury image and there were plenty of consumers willing to buy into this image. As production increased, the price of salmon also fell, however farmers were able to reduce the cost of production maintaining profitability.
We, at Callander McDowell have often heard it said that farming a luxury species such as salmon is not a panacea for diminishing catches of marine fish. Unfortunately, such critics have missed the point. Farmed salmon can be produced cheaply and in volume and the luxury image has continued to stimulate demand. As supplies of marine fish such as cod have fallen, consumers have continued to eat fish but opted to buy salmon instead. Thus farmed salmon have helped reduce the fishing pressure on wild stocks of marine fish. If salmon was unavailable, the market would have much less fish to sell. Aquaculture has certainly responded positively to the reduced availability of marine fish but if such marine fish were still widely available, then aquaculture would have not as grown the way it has. Wild stocks and aquaculture are inextricably linked as long as producers farm what the consumers and the markets want.
Aquaculture is no different to any other area of food supply. Most consumers are not particularly interested in how their beef, pork or poultry are produced. It is no different for fish. Consumers are much more interested in whether they can buy the products that they want, than how it arrived on the supermarket shelf.
Voice of despair: Although cod is popular in many parts of Europe, the potential of farming cod has never been fulfilled. This is simply because there has been plenty of wild caught cod available in the marketplace at prices that make farming uneconomic. This situation remained unchanged for many years, until the arrival of the new millennium. Suddenly, there was real concern about the state of wild caught cod stocks and as a result, the environmental lobby were mobilised. They issue dire warnings of an imminent stock collapse and they advised that consumers forewent cod in favour of other species.
Although consumers were fixed in their ways, the processors of frozen cod products quickly substituted other species, especially Alaskan pollock, in cod’s place and actually consumers found it was little different so accepted the change.
At the same time, cod farming became a real possibility. Cod would become scarce in the marketplace opening up the opportunities for farmed cod. Unfortunately, before the cod farming industry really became viable, the environmentalist warnings were found to be too pessimistic. Whilst North Sea cod was in decline, stocks elsewhere were relatively healthy. Wild caught cod continued to find its way to the marketplace but because demand was low, prices fell, hurting the cod farming companies.
Farms were unable to compete with cheap wild caught cod and so went to the wall. According to IntraFish, there are just 15 companies remaining in Norway.
Speaking at a recent conference, senior researcher, Atle Mortensen said that there was still hope for the cod farming industry, suggesting that the groundwork has now been laid for a profitable future. He blamed the problems on the financial crisis forcing consumers to buy cheap species such as pangasius and tilapia instead. Whilst pangasius has taken market share from all white fish, the presence of this fish in the marketplace cannot be blamed on the problems of the cod industry. Cod prices have not only remained at similar levels throughout the past few years, they have been regularly discounted and continue to be so. Cod is largely competitive with the rest of the choice on the fish counters.
The problem for cod farming is that the cost of production has remained high making it difficult to be profitable. The only option has been to present a high quality product different to the traditional wild caught cod and hope that there are sufficient consumers willing to pay a little more for something a little different. Although there is an expectation that production costs can be reduced as happened in salmon farming, the two are very different and cod farming companies might find a very different road ahead in terms of cost reduction.
For the retail sector, farmed cod has advantages. Like other farmed fish, cod can be offered at a predictable and consistent price, quality and supply. Cod farming companies do have another problem and that is whether consumers have fallen out of favour with traditional white fish, but this is a very different challenge.
Mr Mortensen said he hoped that the battle with wild fish is over but this is unlikely to be ever the case. He said that they are not necessarily competitors and that there is room to work together with farmed cod filling in the gaps when there is a shortage of wild fish. Yet, if this is the business model to which the cod farming industry should look to, then any hope for cod farming will soon vanish.
Sloppiness: This week an article in Norway's Dagens Naeringsliv accused the American FDA of adopting a sloppy approach during their assessment of genetic modified salmon. A study by Frank Asche and Atle Guttormsen in collaboration with researchers from Duke University have concluded that a direct comparison of GM salmon against traditional salmon is too limiting and that instead the study should be widened to consider whether society is better with or without GM salmon. They have also expressed concern about possible effects on the market for salmon.
The issue of GM salmon has prompted widespread debate. This is because it opens the door to genetic modification of a whole range of other animals, which have much more commercial significance. The reality is that no matter how much the issue of GM salmon is debated GM salmon are unlikely to reach the marketplace for many years to come. This is not because of any of the specific issues that have been raised by the authors of this article or any other. Instead, the issue is that whether AquaBounty GM salmon get FDA approval or not; no farmer is likely to undertake growing the fish nor any retailer selling them. This is because of the massive amount of adverse publicity rearing or selling the fish will generate. The environmental groups have already invaded the HQ’s of retailers for not having a sustainable fish sourcing policy. That is nothing compared to the negative publicity that will come from being involved with GM fish.
This also ignores consumer reaction. Consumers will be exposed to so much adverse publicity that they will not only do everything to avoid buying GM salmon but possibly buying any salmon at all.
AquaBounty have announced that they intend to grow their GM salmon in a closed containment system somewhere in Central America. No doubt they want to keep the fish well away from anti GM activists. They probably hope that out of sight out of mind. However, it is unlikely that the environmental lobby will let the matter rest. For the time being, GM salmon is like a poisoned chalice. It will take a very brave farming company to take on GM fish. At best they risk commercial suicide.
Against such a possibility, whether the FDA’s approach is considered sloppy or not is largely irrelevant.