Consumer requirements for supply from sustainable resources

by

Roland Wiefels
Director, INFOPESCA

1. Introduction

Since the beginning of the 1950's, when FAO published its first statistics on world fisheries, fish production has steadily increased and seafood has become familiar and appreciated all around the world, even in regions located far from the sea.

For many years, the increase of production was due to better catching techniques, bigger boats and gears and to the exploitation of new fishing grounds. Nowadays, when most species seem to be caught to the very limit of sustainability, new possibilities to continue the increase of seafood production arise from aquaculture techniques.

The question many persons ask is whether this increasing production will find markets or to which extend the increasing production will affect prices. In parallel to these "production-oriented" questions, we can also raise "market-oriented" issues: which are the needs of the markets and which should be the volume of production to satisfy these needs.

2. A steadily growing world demand for seafood

Year after year, since the end of World War II, human beings all over the planet have increased their consumption of seafood (Figure 1). World demography has also grown steadily during this period. The production of seafood has grown from 19 million tonnes in 1950 to 39 million tonnes in 1961 and to 130 million tonnes in 2001 (Figure 2). It represents a continuous increase at a yearly rate of 3.84 percent in average over more than half a century.

Source: FAO Yearbook of Fishery Statistics

Source: FAO Yearbook of Fishery Statistics. Aquaculture, 2001

The increase of seafood consumption and production was possible due to a conjunction of many factors. Among them the following:

i) The rapid and worldwide development of the cold chain, beginning with the use of ice to store fish in the fish holds and to maintain it refrigerated through the distribution network until its arrival to a processing plant or to the retailer. Freezing at sea is a step further to maintain the original quality of the fish but is part of the same kind of cold chain.

ii) The development of transport means and logistics, making it possible to supply rapidly any fresh seafood anywhere. The strong expansion of nets of railways, highways and paved roads together with the dissemination of commercial harhours and airports all over the world and the multiplication of a wide variety of transport vehicles have undoubtedly favoured the trade and the distribution of fresh and processed seafood, as well as of any other goods.

iii) The rapid urbanization of the world during the last half century has favoured the concentration of consumers in large cities. This is particularly true in Latin America where over 75 percent of the population is currently urban. A concentrated population favours a concentrated distribution network and the rapidity of distribution.

iv) The worldwide equipment of households with cold storage (fridges and freezers), as well as with cooking devices, has represented a revolution in the household kitchens and in the concept of meal preparation, turning seafood preparation and storage easier.

v) The development of processed convenience seafood has followed the trend of modernized kitchens and it has also diversified the offer of seafood with a multiplication of different products from a same raw material. From a yellowfin tuna, for instance, one can have a variety of canned tuna salads (Mexican, American, Niçoise, etc.), canned tuna in brine or in oil, frozen steaks, fresh loins, sashimi and others.

vi) Globalization has brought a large awareness of other cultures and some "national" recipes are now adopted worldwide, from allici pizza to paella, rollmops, ceviche or sashimi. This also widens the diversity of products being offered to consumers.

vii) The fact that "seafood" is a generic name grouping hundreds of species of fishes, molluscs and crustaceans. There is an immense diversity of products (from tuna to lobsters, from squid to sardines or from mussels to shrimps), of presentation (fresh, canned, frozen, dried, salted, in brine, etc.) and of preparation. One can eat seafood three times a day during weeks without repeating the same dish. Differentiated products have also differentiated prices. From sardines to caviar, there is seafood affordable to any pocket.

viii) The fast growing catering sector, from traditional restaurants to factory and school canteens has favoured the consumption of seafood as it is a must on any menu and it is recommended by nutritionists in the canteens. The growing number of persons having their lunch out of home is getting this way more familiar to seafood and more willing to eat seafood also at home.

ix) The actual healthiness of seafood, repeated by nutritionists and other opinion leaders worldwide over several decades has increased the general awareness of the quality of this type of food. More recently, the positive aspects of seafood were reinforced by the discovery of its Omega 3 content. The growing awareness of the global obesity problem, on its turn, pushes for a the substitution of a certain type of high cholesterol food by more healthy ones, among which all type of seafood.

x) The possibility during many decades to increase catches by expanding the capacity and the range of action of the fishing fleets. Most species are now at their very limit of catchability or even overfished. Even if a last frontier still remains for traditional catches (the Antarctic krill), it is the booming development of aquaculture which makes it possible to go on increasing total production and consumption of seafood. For some time, the bottleneck was said to be the need of fish meal content in aquaculture feed. New feed compositions are however diminishing this dependency and some aquaculture specialists already say that is possible to grow carnivore species without fish meal. Aquaculture faces many problems (from feed volumes to environment issues or to the shared water resources) but, for the time being, there is still no definite limit established for its growth.

3. Consumption standards still very differentiated throughout the world

Of course, all these favourable conditions are still not met everywhere in the world. Seafood is still not available the same way in all places. The average yearly per capita consumption of the world has recently reached 16 kg but it goes from less than 1 kg to over 90 kg according to the country.

Markets are defined by the conjunction of per capita consumption and demography. It is therefore no surprise to see that the biggest seafood market in the world is Asia, being itself dominated by China with its 1.2 billion inhabitants (Figure 3).

Recent doubts emitted about Chinese statistics do not change this fact. Even if Chinese seafood actual production and consumption figures were to be cut by half (very unlikely), China would still be n° 1 in production and in total consumption of seafood.

Do the different per capita consumption standards, according to the countries, mean that in some parts of the world people like more or less to eat seafood than in other parts? Or does it mean that seafood is more or less available to consumers according to where they are or to their buying power?

Source: based on FAO Yearbook of Fishery Statistics. Production, 2000

The affordability of seafood in general does not seem a convincing reason for a high or a low seafood consumption, as there are so many seafood products with a very wide range of prices. The relatively high per capita consumption in Senegal, Gabon, Ghana, Guyana, the Philippines, and Malaysia on one hand and the relatively low per capita consumption in Germany or in the Eastern European countries on the other hand, show that there is no apparent relation between per capita seafood consumption and per capita Gross National Product (GNP).

The availability of seafood, on its turn, depends on the networks of wholesalers and retailers and on the organization of distribution. Distribution of seafood is a work for well trained professionals: specialized transporters, wholesalers and retailers, not forgetting the producers from whom the primary quality of the product depends, the processing industry which must keep in touch with the final consumers in order to have products adapted to their needs, and the supermarket chains, already a predominant presence in food distribution in many countries but where seafood is normally not seen as such, being just an addition of some canned products, some frozen products, some refrigerated products, some salted and dried products and some fresh products.

4. The case of China: an exception or an example to be followed?

Actually, FAO statistics show a relative stagnation in the processing of seafood and a growth in the consumption of fresh fish (Figure 4). Of course, much of this increased appetite for fresh seafood is influenced by Chinese statistics during the last decade. Much of the growth in the world fresh fish consumption therefore illustrates the growing quantities of carps being offered fresh or even alive on the Chinese markets.

Many fisheries analysts are perplex when they analyse the world fisheries and come to the China case. A normal reaction from many analysts is to separate the extreme exception from the other cases. Some global statistics already include two cases: the world with China and the world without China (Figure 5), in order to have a better understanding of the general trend of the world. The question is whether there is any sense in abstracting one fifth of humanity in order to have what appears to some as "more reasonable" figures.

The case of China brings us to add an 11^th factor to the already 10 factors listed above as favouring seafood consumption: the political will to do so and the means to reach the established objectives. These established objectives, compared with the real production, might be the cause of some discrepancies in the Chinese national statistics. But even with the hypothesis that the discrepancies (if they actually exist more than in other countries) reach 20 percent, 30 percent or 50 percent of total production, China is still number one in the world for seafood production and total seafood consumption.

It would be interesting to compare the other countries of the world not with China, but with the 23 Chinese provinces, with the Chinese national statistics broken down accordingly. It is already the case for some of these provinces in the FAO statistics.

Anyway, China, as some other countries in the world, show us that it is possible to increase rapidly the production of seafood through aquaculture, once there is a will and means to do so. The means can differ, according to the organization of national economies. Despite its big size, with 9.3 million km², China has only 6.26 percent of the world land area and its 14 500 km coastline represent only 4 percent of all coastlines in the world.

Figure 5: Aquaculture production in APEC economies, 2001 (MT)

with China

without China

Source: based on FAO Yearbook of Fishery Sstatistics. Aquaculture

5. Food of the sea and food of the land

Water covers ¾ of our planet. Thousands of different species of animals and vegetables live in this liquid environment which is becoming better known every day and to which mankind is adapting through modern technology. It is therefore natural that more and more food is being obtained from this environment, moreover when this food is recognized as being particularly healthy.

Considering only meats and fleshes, in year 2000, 130.5 million tonnes of seafood were produced, of which only 74 percent, or 96.6 million tonnes, were destined to direct human consumption. This is more than any other type of meat or flesh coming from a land environment (Figure 6). The remaining 26 percent of fish production, mostly reduced as fish meal and fish oil, contributed as feed to the production of pork (94.4 million tonnes in 2002) and poultry (72.6 million tonnes in 2002) and also to aquaculture.

Source - based on FAO, quoted in CyclOpe 2003^[1]

* - seafood production of year 2000 destined to human consumption

For the time being, the total world consumption of "landfood" (pork, poultry, beef and mutton together) is still 2.5 times higher than the consumption of "seafood". On its turn, the international trade of seafood (48.7 million tonnes in 2000) is 2.7 times higher than the international trade of "landfood" (18 million tonnes in 2002). Food trade increases the diversity of products offered on the markets and therefore influences positively the increase of total consumption. The seafood consumption in the last decades has grown in parallel to its international trade.

6. The hypothesis of a yearly per capita consumption of 30 kg seafood

We have seen that many populous countries in the world still remain with a low per capita consumption: India (4.7 kg), Pakistan (2.5 kg), Brazil (6.5 kg), South Africa (6.7 kg), Algeria (3.5 kg), Sudan (1.7 kg), the Eastern European countries (average 6.2 kg) or the former USSR republics in Asia (average 0.9 kg). The general trend of these countries, however, is to increase substantially their consumption of seafood, due to the ten favourable factors seen above.

Theoretically, from a consumption point of view, it does not seem impossible to increase the world average per capita consumption of seafood to 30 kg per year in a medium term. This would be in line with the current seafood consumption standards of France, Thailand, the Philippines, Ghana or Senegal, for instance. Still far from the standards of Gabon (47.7 kg), Norway (51.9 kg), Malaysia (57.7 kg), Portugal (60.1 kg), Japan (65.2 kg) or Iceland (90.2 kg).

If we project a yearly seafood per capita consumption of 30 kg to the world population of 2020, forecasted to be 7.5 billion persons, a yearly supply of 225 million tonnes will be needed. Considering a production of fish meal stabilized at the current level of 35 million tonnes of fish, the total need of a yearly production of 260 million tonnes represents doubling the world production of year 2000 over a period of 20 years. Could it be possible?

There is no doubt that traditional catches have already reached their limits. The increase of fisheries production lies therefore in the rapid expansion of aquaculture. In recent years China has shown the rapidity how aquaculture can expand. Other countries are in condition to follow the path or are already following it. The hypothesis of doubling to 260 million tonnes the current yearly world production of seafood in the coming years with aquaculture products does not seem impossible. From 1991 to 2000, aquaculture showed a growth rate of 10 percent per year. Just by keeping this growth rate, it would take only 17 years to reach a total aquaculture production of 165 million tonnes per year which, added to the current level of 95 million tonnes of capture fisheries, would result in a total seafood production of 260 million tonnes.

260 million tonnes represent a level 7.4 percent higher than the 2002 production of "landfood" (pork, poultry, beef and mutton together). Of course one can expect that over 20 years the production of "landfood", particularly poultry, will also grow, but certainly not at the same rate. The possibility of having a consumption of seafood higher than the consumption of "landfood" may not happen in 2020, but it surely will be much closer than nowadays.

Even so, the dream of doubling the world production of seafood in 20 years, in order to become an attainable objective, needs tremendous efforts to overcome difficulties and bottlenecks. One of the main bottlenecks is the marketing structure for seafood.

7. Traditional markets and new markets - the case of Brazil

As everybody eats in order to live, each human being on earth (except newborn babies) is a potential consumer of seafood. Some are already consuming large quantities and others only consume little. Among these last ones, we have the case of Brazil, with an official yearly per capita consumption of 6.5 kg seafood. When we see the composition of the Brazilian people, integrated by so many origins, it is amazing to see that most of these origins, be them Indigenous, Portuguese, Spanish, West African, Italian, German or Japanese are among the highest seafood consumers in the world. Why shouldn't their descendents have similar eating habits? The answer is not so much in the fact that seafood is expensive to Brazilian pockets. Actually, the most consumed species in Brazil are imported ones: Norwegian stockfish (bacalhau), Argentinean hake and Chilean salmon, which are not particularly cheap. The bottleneck for an increased consumption of seafood in Brazil lies in its deficient seafood distribution system and in its weak networks of seafood wholesalers and retailers.

There is no doubt that Brazilians could consume 30 kg seafood per year (still half of the Portuguese consumption standard), which would represent additional 4.2 million tonnes yearly to be marketed in the country. Brazil has the natural resources, the manpower and the technology to develop aquaculture production to meet this potential demand. But its main challenge is in modernizing and expanding its networks of seafood wholesalers and retailers as well as its distribution logistics. This development will undoubtedly appear in the coming years, probably pushed by the seafood producers themselves, but it could also be accelerated by a national program to this end.

To a higher or lesser extent, the same happens in most of the countries where seafood consumption is still low. India alone would need additional 25 million tonnes seafood supply per year in order to reach a per capita consumption of 30 kg. An important part of this volume could be produced in the country, but part of it should likely also come from imports. The cases of Egypt, South Africa, Pakistan and other countries are similar.

8. Seafood trade among countries

For any country, the production of seafood, in any quantity, does not impede it to also import seafood. As a matter of fact, an increased consumption is basically due to the diversity of offer. Due to climatic and oceanographic particularities in each region, it is economically impossible to produce all species in all countries. The diversity of offer on the markets comes therefore from trade. Not really exporting seafood and importing seafood, but exporting frozen hake fillets, squid rings and cooked cold water prawns, for instance and importing canned tuna, frozen tropical shrimp and live oysters, for example. This trade of different seafood products favours the diversity of offer on the markets, it attracts consumers and encourages the development of distribution networks.

During the last decades, many countries have established fisheries and aquaculture sectors producing for export, in order to earn hard currencies. Export markets were and still are by far concentrated in the EU, USA and Japan. These three important importing regions have developed their domestic markets largely through the diversity of seafood offer. Most of these countries have already a high seafood consumption standard and a low demographic growth. It would probably be difficult to increase their consumption much more. They are highly competitive markets for seafood suppliers who are attracted by the currency and by the solvency of their consumers. They are also attracted by the existence of well organized distribution networks. Actually, the imports of these countries are more a result of the efforts from their traders to guarantee steady supplies than to the efforts of exporters from producing countries in selling their products. Wholesalers and processing plants having little experience in marketing their products in their own country normally find it difficult to market their products in other countries. Demanding brokers and traders in traditional markets are therefore welcome even if they mask the real seafood marketing systems in the importing countries.

The rapid expansion of aquaculture presents the challenge, for most seafood producing countries, to develop marketing skills domestically and abroad. The problem of marketing aquaculture products is primarily the problem of marketing increased quantities of seafood when traditional markets are close to saturation. However, the major part of humanity is located in non-traditional markets, many of them with fast growing potential.

In order to modernize and to develop the distribution networks, many efforts are needed. Supermarket chains, most of them multinational, are already contributing to the modernization of seafood distribution in almost all countries. Supermarkets are an important element in the distribution chain, but they are not exclusive. Nor is their system to sell seafood perfect. Training wholesalers, retailers, transporters, as well as fishermen and fish farmers represent tasks in which governments and professional associations should invest. Some international organizations, particularly FAO together with the INFONetwork, could also be of great help in this respect.

9. The need of training the distribution networks

In some countries, the improvement of seafood marketing is directly supported by governmental institutions (as Office National Interprofessionnel des Produits de la Mer et de l'Aquaculture [OFIMER] in France or Organización del Mercado de los Productos de la Pesca y Cultivos Marinos [FROM] in Spain, for instance). Such structures however do not exist in most countries, particularly in developing countries. Most of the countries do not have marketing specialists in their Fisheries Ministries, Secretariats or Departments. The training of national marketing teams should therefore constitutes one of the first priorities for national fisheries authorities.

Information and technical assistance are the main inputs to any development in the world. Well disseminated information enlightens market opportunities. Technical assistance provides practical knowledge and experiences to the various actors of the seafood marketing activities.

Activities in the fields of information and technical assistance can be developed in partnership with several other institutions, be them national, regional or international. These activities may include, among others:

Obtaining and disseminating information

- The structure of seafood markets in the big cities of the world (enlarging and updating the series "seafood markets in Latin American big cities", from INFOPESCA, or "Globefish metropolitan market studies" from FAO);

- Seafood marketing practices of supermarket chains;

- Quality control in seafood wholesaling and retailing;

- Prices of species and products - wholesale and consumer prices (widening the scope of the current INFOFISH Trade News (ITN)/INFOPESCA Noticias Comerciales (INC)/European Price Report (EPR) bulletins) ;

- Compared tariffs for seafood in the world (VAT, duties, and other tariffs);

- Compared regulation constraints in the world (related with HACCP, traceability, environment, terrorism, etc.);

- Success stories in the field of seafood marketing, with special emphasis on retailing.

Technical assistance

• Structuring and training seafood marketing services by national fisheries authorities;

• Training seafood wholesalers and retailers (see, for instance, the training programmes of the "Centre de Formation aux Produits de la Mer", in Boulogne-sur-Mer, France);

• Technical assistance for the preparation of institutional seafood consumption promotion campaigns;

• Training national negotiators in international seafood trade negotiation issues.

Each region and each country has its own particularities and therefore will need its own programme. Increasing fish consumption in India is very different than doing the same in Algeria or in Brazil. A common approach of the issue is however possible, beginning at the market end of the fisheries/aquaculture system and going upflow to the production. In other words, it is a market-oriented approach rather than a production oriented one: the first aim is to attend people, allowing them to have a better access to seafood and increasing their consumption of these products.

10. Conclusions

Seafood consumption has increased strongly during the last 50 years. Many factors are associated with this increase. The availability of a wide variety of different products generically known as "seafood" and many of them being supplied by international trade, is undoubtedly a major factor for this demand growth.

Two scourges of our times regarding food, hunger and obesity, can be minimized through increased consumption of seafood. Increasing further the consumption of seafood is certainly a step towards improving food security in the world. Seafood, through aquaculture, is possibly the source of animal protein with the highest potential of a quick production increase.

An average yearly per capita consumption of 30 kg seafood is something one can expect to happen in the coming years or decades. This figure can also become a strategic medium term goal for the fisheries and aquaculture sector in the world. It could be attained in less of 20 years if solutions are found for some bottlenecks. One of the main bottlenecks is the deficient seafood marketing structure in still most of the countries in the world.

China has managed to multiply its aquaculture production by 34 in 31 years, from 764 380 tonnes in 1970 to 26 million tonnes in 2001, through an association of natural resources, human resources, technology and political will. However, China must not be seen as an exception. This country covers only 6.3 percent of total world land area and its coastline is only 4 percent of total world coastlines. Many other regions in the world have similar (or even better) geographic conditions to replicate the multiplication of fishes, mollusks and crustaceans. The multiplication of the current world aquaculture production volume by five in the next 20 years seems therefore possible.

Marketing aquaculture products is nothing more than marketing increased quantities of seafood. The more diversified could this production be, the better. From oysters to salmon, from shrimp to eels or from mussels to tilapias, it is the diversity of products which allows the increased consumption of what is known under the generic name of "seafood".

Traditional importing markets (EU, USA, Japan) have well established and efficient seafood distribution networks. However, these markets are not far from being saturated and they are demographically stable. On another hand, 87 percent of humanity do not belong to these traditional importing markets and most of them consume little seafood. The constant demographic growth of this population increases the interest for it as a non-traditional market to be developed.

The building of a modern seafood distribution system with qualified professionals and efficient networks of wholesalers and retailers should become a priority in countries where seafood consumption is still low. From a private enterprise point of view, the supermarket chains are already contributing very much for the modernization of seafood distribution worldwide, but this is still not enough. National programs for the reinforcement of seafood marketing, with the collaboration of different international organizations should also be undertaken.

Developing the seafood distribution networks in all countries favours increased seafood consumption in these countries and also national production as well as international trade. A worldwide development of seafood distribution networks will booster aquaculture production as well as the seafood consumption in the world.