Executive Summary - Perceptions of Canadian Aquaculture by U.S. Seafood Opinion Leaders

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Prepared for
Fisheries and Oceans Canada
(DFO)

April 2007

LES ÉTUDES DE MARCHÉ CRÉATEC +
206, Avenue des Pins East - Montreal (QuÉbec) H2W 1P1
Tel.: (514) 844-1127 - Fax: (514) 288-3194
Email: info@createc.ca / Web Site: www.createc.ca

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TABLE OF CONTENT

EXECUTIVE SUMMARY

1. Background, Purpose and Methodology

Background

Purpose of the study

Methodology

2. Key Findings

Seafood Dealers in the Study

Perceived Market Trends

Perceived Consumption Barriers

Trade Issues

Trade Practices

Eco-Friendly Labelling

Seafood Certification Programs

Information Sources

Awareness of the COOL Requirement

Perceptions of Canadian Aquaculture

Perceptions of Canadian Farm-Raised Seafood

Perceptions of Canadian Seafood Suppliers

3. Concluding Comments

In Conclusion

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EXECUTIVE SUMMARY

Background, Purpose and Methodology

Background

• Créatec was commissioned by the Department of Fisheries and Oceans Canada (DFO) to conduct this qualitative study to gain a deeper understanding of the attitudes and perceptions of American opinion leaders in the U.S. seafood market towards Canadian aquaculture products and suppliers.
• Canada’s main export market for seafood is the U.S., but Canada competes with Chile as the lead farmed Atlantic salmon supplier and with China and Thailand in the overall seafood market.

• Over the past few years, the campaigns of environmental advocacy organizations in both countries have criticized the safety and environmental factors of farmed salmon. Some results include: (1) farmed Atlantic salmon being placed on an ‘AVOID’ list in the U.S., (2) consumer warnings about the safety of imported seafood, especially farmed, from any country, and (3) consumer guidelines stressing sustainability and eco-friendly farmed seafood, instituted since the COOL (country of origin) regulation which required seafood labelling.

• Aquaculture is essential to feeding an increasing demand in the U.S. for seafood, which is becoming the fastest-growing protein.

• However, it is not known how opinion leaders in the U.S. have been impacted by the above criticisms, and if they are aware of Canada’s current state-of-the-art aquaculture biotechnology, and Canadian-U.S. agreements regarding seafood sanitation and farming practices.

• Thus it is important for the Government of Canada to understand the needs, motivations, barriers and expectations of leaders in the U.S. seafood supply chain, especially towards Canadian farmed seafood.
• As the lead federal agency for aquaculture, DFO works with many intergovernmental partners to communicate issues related to aquaculture. There was a need to quickly update its knowledge and understanding of the U.S. seafood market, which is critical to Canada’s success in that marketplace.
• Findings from this research will be used to help inform program and policy development and communications especially to U.S. audiences.

Purpose of the study

• The purpose of this qualitative study was to gather feedback from a variety of U.S. leaders throughout the seafood supply chain and to understand their perceptions and attitudes towards various aspects of Canadian aquaculture, in order to provide input into a developing Oceans to Plate strategy particularly with a view to the important U.S. seafood market.

Methodology

• From March 12 to March 26, 2007, a total of 28 semi-structured individual telephone interviews were conducted with people who represented six main types of opinion leader in the very complex U.S. seafood supply chain.

• Participants included: large or small seafood wholesalers, importers, distributors or processors both with and without a retail outlet, seafood agents and brokers, retail grocery or supermarket chains, mass merchandise stores or warehouses, and seafood restaurants or chains.

• Most interviews lasted 30-45 minutes, and all agreed to participate with no monetary incentive.

• Participants were selected through a convenient, non-random process, from lists and/or directories gathered by Créatec and DFO, with the focus on the U.S. north-eastern seaboard and the northwest, the regions with the greatest export potential.

• Most of the 28 interviews (20) were conducted in five north-eastern states, including: Maryland, New York, New Jersey, Connecticut and Rhode Island.

• The remainder (8) were conducted in five other states, including: Oregon, California, Washington, Minnesota, Wisconsin and New Mexico.

• The same interview guide was used for all participants. However, not all questions were answered, due to participants' time limitations or because they did not know.
   

• Before each session, participants were informed that the interview was being undertaken on behalf of the Canadian government to obtain their views on some general aspects and issues related to seafood products and distribution, and imported seafood.

• All participants were provided with a DFO telephone number in case they had queries about the study or how these results would be used. While some were not interested, most participants did in fact take note of the number.

• Note that qualitative research by nature is exploratory and cannot or should not be extrapolated to any type of market or audience, without further statistical validation. At best, qualitative research explores the range of views, and provides an understanding of why such views exist.

Key Findings

Seafood Dealers in the Study

• The complexity and diversity within the U.S. seafood supply chain cannot be underestimated.

• In this study, we spoke with a wide range of American seafood opinion leaders, including presidents, CEOs, owners, partners and managers in all types and sizes of companies. Most had been in the seafood business for years, many over 20, and some over 30.

• Those interviewed worked for companies that did not fit into neat categories and did not do "only" one thing. Most conducted a wide range of seafood-related business functions, and could not be identified as pure wholesalers, brokers, importers, retailers, etc.

• Participants used a wide variety of suppliers, including: wholesalers, distributors, importers, processors, producers, brokers, their own corporate warehouses, direct off the boats, and direct from fish-farmers. Some companies used only one or two suppliers, while others used many.

• Participants sold to restaurants or restaurant chains and their clientele^[1]; caterers and other food service clients such as schools, hospitals, institutions, hotels, and country clubs; other wholesalers, distributors and warehouse distributors; food processors; grocery stores and supermarkets; and retail grocery customers.

• About half were involved in direct retail, but even there, the lines were not 100% clear.

•  While some said their companies did a limited amount of processing themselves, most in this study did not, because their product came "case-ready," "fully processed," or "packaged and frozen."

•  Participants in the restaurant, warehouse or supermarket end, and those who supplied hotels and/or restaurants, said they usually bought the whole fish and cut it themselves, or bought fish that were "headed."

• Participants purchased a wide range of seafood species. Most bought salmon^[2], but to varying degrees.

• Some only dealt with frozen fillets or "portions", and a few with smoked salmon. While many purchased both fillets and the whole fish, the latter was preferred by restaurants or those who sold to restaurants, especially the higher-end ones, where the chefs could use all of the fish.

• When asked about their import experience^[3], participants answered in different ways.

• Some stated how long they had been importing, which ranged from about 10 to 35 years.

• Some described their experiences as "positive," while others mentioned specific import-related concerns, such as transportation and waiting for "FDA holds."

• Still others either mentioned the percentage of their business that involved imports, which ranged anywhere from 5% to 98%, or identified the countries of origin for their particular seafood species.

• Many participants said they imported direct from shippers or producers located abroad, most or some of the time. However, some used importers or brokers instead, so they would not have to deal with the complications involved in importation.

Perceived Market Trends

• Participants identified ten major trends in the seafood market over the past five years, most of which have positive implications for Canadian exports, especially aquaculture.

1. The decreasing supply of fish was seen as an unfortunate trend, and a major concern of many.
2. The popularity of seafood as a protein is growing^[4].
3. There is increasing consumer education and positive media attention about seafood, focusing mainly on health and weight-loss benefits.
   • However, many also mentioned what they perceived as media focus on the negative aspects of farmed fish and media support for the consumption of wild.

   • Some felt there was a trend to wild over farmed, especially for salmon.

   • Some saw that interest in organic was spreading, although this was difficult to achieve with fish.

4. There is an increase in farmed fish, which goes hand-in-hand with another trend, concerns about sustainability relating to environmentally friendly fish farming and wild fish harvesting^[5].
5. The increasing popularity of new or unusual species, such as tilapia, is due to the decreasing supply of over-fished species.
6. The availability of frozen over fresh fish is increasing.
7. The growing need for oven-ready value-added products, mainly for portions, is largely due to the increase of dual or single-income working households.
   • Other value-adds mentioned included skinless/boneless, breaded, marinated or stuffed. However, one respondent pointed to a shift away from breaded, because of diet-consciousness.
8. Prices for fish products are rising, while brokers and importers see an increase in the cost of doing business. Both could counteract the growing popularity of seafood.
9. Fraudulent business practices related both to imported and domestic product occur more often than they used to.
10. Record-keeping requirements are becoming increasingly complex and time-consuming, especially for those on the retail end.

• Also noted, but to a lesser degree, the shift to a greater reliance on technology, which bothered some participants who identified themselves as "middlemen."

Perceived Consumption Barriers

• Participants were quite consistent when discussing major barriers. Overall, they identified three major obstacles, which appear to be inter-related, and which not only echo many concerns expressed in previous DFO qualitative studies on aquaculture, but also seem to have positive implications for Canadian aquaculture products and suppliers.

1) The currently unmet need for consumer education overwhelmingly topped the list. This goes hand-in-hand with what was described as a "coherent marketing strategy" aimed at various levels of the supply chain.

• Participants explained that people are "intimidated" by the prospect of cooking and preparing seafood, because they don't know how. Participants wanted educational information about seafood and/or aquaculture production methods, plus marketing tools such as point-of-sale posters and recipes that they could pass on either directly to the consumer and/or their clients, who would distribute them accordingly. One participant described some recently received material: "A rather large laminated poster to be displayed in most retail stores to promote health issues and the benefits of eating fish. That's the type of thing that people are hungry for."

2) The dwindling supply or availability of fish due to over-fishing, coupled with increasing demand and the resulting higher prices was also high on the list of perceived major barriers.

• Increasing seafood prices, based on the lack of product availability and increased costs everywhere, were making fish a more expensive protein alternative.

3) Ethics, fraudulent and competitive business practices were mentioned by some. This highlighted the need to establish personal relationships with trustworthy suppliers and others who respected business standards.

• When asked what would help them sell more seafood, participants again were quite consistent in their responses, which in essence were remedies to most of the major perceived barriers, namely:

• Consumer education together with good marketing and signage.

• Continuity of supply and consistency in both quality and price.

Trade Issues

• Overall, participants identified four major issues they faced in their seafood businesses.

1. Availability and getting enough supply of the right product. In some cases, consistent supply was linked to price, sustainability and the volatility of the seafood market, and the ability to anticipate market trends and popular species.

2. Logistics, i.e., transportation, timeliness and the need to import when the usual domestic sources are not available.

3. Product packaging, tracking, and labelling especially concerned those in retail.

4. The need to educate the consumer, a major recurring theme throughout this study.

Trade Practices

• Trade practices by the seafood dealers represented in the study tended to be quite conventional and strongly focused on personal relationships, with some resistance to advance pricing arrangements and electronic integration.
   
• The main emerging trade practices involved four basic needs for:

1. Partnerships in seafood marketing and consumer education

2. Better information on immediate and future product availability and prices

3. Pro-farm information

4. Flexible value-added services.

• Most participants did not have (and did not want) advance pricing arrangements. 

• Most of those who did used it only occasionally, or with certain suppliers, mainly because of market volatility. Several supermarkets or warehouse operations had corporate offices who could buy large enough quantities to make advance pricing viable, but interviewees themselves were not directly involved in such negotiations.

• Most participants did not enter into long-term procurement contracts, or anything long-term, again mainly because of market volatility. Those who did refrained from giving any details.

• The longest term would be 3-6 months for a particular species, with a specific supplier.

• It should be noted that participants were not specifically asked about long-term procurement contracts for farmed fish. However, there may be a possibility, given that farmed-fish can provide a consistent supply, that such contracts may be viable in the future.

• Most participants also said their companies did not have a formal purchasing policy, or at least none they were aware of.

• Some thought the term "formal" did not adequately describe the seafood industry. On the other hand, some interviewees did answer in the affirmative, and generally referred to specifications related mainly to size and/or quality.

• Participants were specifically asked if they were interested in:
• Services to help reduce their procurement costs

• Less than half said yes to services related to 4 main areas: (1) sizing and shrink, including shipping already-processed product, (2) logistics and transportation, (3) help with promotional efforts, including information aimed at reassuring the customer about farm-raised in particular, and a "kick-in" to help defray the promotional costs of trade shows, and (4) financing and credit.

• Electronic or online integration between their company and suppliers (e.g., to facilitate automatic inventory replenishment, invoicing, or electronic ordering). Overall, there was mixed reaction to this idea.

• Some participants indicated their company was already involved in some way. Others were enthusiastic, as long as confidentiality was maintained, and it provided data about immediate and future availability.

• Most in this study, however, were not interested, for two main reasons: (1) it minimized the personal aspect of the business relationship, especially for smaller operations, and (2) automatic ordering would leave buyers financially exposed, due to market fluctuations and changes.

• Value-added services  

• To some participants, this encompassed many aspects, including an expectation of good business practices related to timeliness of delivery, product quality, price and weight.

• To others, the value-added services they requested were: portions, packaging, pre-made frozen, quick-frozen, oven-bakeable, ready-to-serve, breaded, marinated or stuffed. Several respondents also commented on the increasing need for value-added services, especially in the retail side, and smaller portion consumer packs.

• Desirable value-added services (i.e., currently not offered) included two specific types of information (1) the much-requested brochures and recipes aimed at the consumer, and (2) information about the marketplace, such as weekly quotas, catches, and outlooks and trends, to help suppliers plan and in some cases, build relationships with their customer base.

• This feedback obtained from the seafood dealers who participated in the study suggest that non-price provisions could be as important, if not more important, than advance price arrangements.

• Most participants indicated that they did react to some type of pressure or influence from organizations, marketing groups, associations, or environmental groups (pressure was defined as an unsolicited influence on their decisions about what to sell or buy, or supplier choice). However, personal or company impact was often denied, and attributed to someone or something else, for example:

• Some said their own company had core values or made conscious decisions to avoid buying certain species, rather than react to outside pressure.

• Some said they felt no pressure per se, but explained how they did need to be aware of their customers who were influenced by negative media coverage.

• Some explained there was pressure on the seafood industry itself, and suppliers, mainly by the anti-farm lobby, environmentalists and animal rights groups (including anti-seal-hunt activists), but also by government and industry-related associations.

• It was thought that information would help counteract the "aggressive education" by these groups.

Eco-Friendly Labelling

• Most participants thought the concept of eco-friendly labelling would fit into their seafood program but only some were sure that costs could be passed along.
   

• Some were quite enthusiastic, mainly because they felt it was what their customers wanted.

• Others gave a qualified yes, depending on the message and how easily obtainable the label was. Still others did not know what eco-friendly meant.

• Most of those who found eco-friendly labelling appealing thought that a certain type of customer (educated, upper-income) would pay more, or a little more, especially for certain species, because it would function as a type of guarantee. However, not a guarantee of quality or freshness.
• Most also said their company would probably pay more for an eco-friendly label if it met at least one of three criteria: (1) if they had the customer base, so that costs could be passed along, (2) if the label was supported by a marketing program, or if it had the right message, and (3) if it did not add to costs, it could be an additional selling point.

Seafood Certification Programs

• Overall, most participants had heard of some type of seafood choice guidelines, or certification program or campaign and saw it as a growing trend.

• While some specifically mentioned MSC, only a few could cite what the acronym stood for – Marine Stewardship Council. One participant questioned the value of the MSC program in that it was unknown to consumers.

• Other participants mentioned the Hazard Analysis Critical Control Point (HACCP), the United States Department of Agriculture (USDA), the Food and Drug Administration (FDA), the National Fishery Institute (NFI) and Natureland (an Irish program for salmon).

• Most saw these programs as more of a trend or "strategy" than a scam, because they gave confidence to the consumer. One participant specifically mentioned the Monterey Bay Aquarium in this context, and thought that all such programs helped to buy product according to "customer needs."
• Overall, participants identified five main criteria to make a seafood certification program credible. It must:

1. Have government backing or standards, including an independent organization for monitoring or tracking.

2. Be understandable to the consumer or end-user, i.e., be written in plain language.

3. Be enforceable, with enough inspectors to do the work.

4. Have consistent guidelines, to avoid many labels from competing associations.

5. Be affordable enough so that both small and large suppliers can be included.

Information Sources

• Overall, participants in this study obtained their seafood information from a wide range of print and online sources, including:

• Trade magazines, such as Seafood Business, Seafood Business Report, Seafood Business Newsletter, Seafood Digest, Seafood News, Urner Barry Reports, Interfish, and Global Aquaculture Advocate, a magazine published by Diversified.

• Other magazines related to food or fine dining, such as Food and Wine, or Frozen Foods (from Europe).

• Internet sites, such as seafooddirect.com, seafood.com, infofish or infopesca, and the NFI site. Some simply did searches on the Internet on specific topics or species.

• Some were also influenced by the general media, including food sections in major newspapers (e.g., The New York Times) and cooking shows on the Food Network. One retailer said when "Emeril is cooking seafood," they got "requests" for that species for the next week.
• Others stated that personal contact, either on the phone or via email, was the key, including during trade shows in Boston and L.A.

Awareness of the COOL Requirement

• Most participants (but not all) were aware of the USDA labelling requirement that retail outlets display seafood country of origin and whether it is farm-raised or wild-caught. However, there was no consensus on the importance of indicating the country of origin.

• To some, country of origin was important, and tied to product quality. For farmed salmon, a few participants preferred "northern waters" over southern, which in some cases supported a Canadian product, and in others supported a product from Norway or Scotland.

• One importer said country of origin was important as an economic factor, relating to the lack of duty.

• Others said country of origin was not important because the consumer generally did not care. However, sometimes third world imports did not sell as well as others.

Perceptions of Canadian Aquaculture

• Many participants in this study stated that they did not know anything about Canadian aquaculture, an awareness gap which strongly suggests that consumers are not the only ones who need an educational effort aimed their way.

• In fact, these potential clients throughout the American seafood supply chain stated, and in some cases emphasized, that they themselves and their clients would benefit from information.

• On a positive note, some participants familiar with Canadian aquaculture to varying degrees seemed to have positive impressions of Canadian fish-farming, and thought Canadians understood the importance of sustainability, and did a good job, despite strong competition. In addition, several said they assumed only positive things about Canadian fish-farming, because they held Canada as a country in such high regard, and because the Canadian seafood product they had purchased was of good quality.
• On the other hand, some participants held less than favourable views about Canadian fish-farming. One person assumed Canada only farmed salmon, while several others complained about difficult experiences with a price-setting monopoly by the Canadian government or being "shorted" by a Canadian company when supply ran out.

• In addition, some voiced their views about fish-farming or farmed fish per se, reporting an increasing demand for wild over farmed because of the price, perceived health benefits, and negative media attention to aquaculture production methods, especially related to PCBs and dyes discovered at salmon farms.

• Overall, most participants did not know about Canadian fish-farming production methods.

• Some had the generally positive impression that Canadian farming methods were adopted from other countries, especially Norway, or gave Canada the benefit of the doubt, and simply assumed and/or hoped they were more than adequate. Others, who seemed more knowledgeable, approved of Canadian production methods, and could identify elements of the production process, such as cages, feeding techniques, avoidance of species intermingling, etc.

• On the other hand, some criticized Canadian farms for being "old-fashioned" and unsanitary or unhealthy.

• Overall, participants in this study did not know about Canadian fish-farming regulations. Only a handful of participants even tried to answer this question. One participant assumed there were strict fish-farming regulations based on Canada's generally strict food safety regulations, and several others seemed sympathetic to Canada, and thought regulations were adequate. However, regulations did not appear to be an area where there was great interest. What participants seemed to want to know was how regulations affected the product.
• While regulations were a non-conversation starter, the word sustainability generated considerable response from many in this study, who said the topic was important to them as suppliers, and to their customers.

• As one respondent explained, "Sustainability is what gets you a sale, or doesn't, in some cases." In fact, some participants wanted specific information that the product they bought was "sustainable."

• Many felt that the Canadian industry did have environmental and sustainability concerns about "environmental balance," and about attempts to make farm-raised "more natural."

• However, a certain proportion said they knew nothing about this aspect of the Canadian industry.

• While opinions and perceptions of differences between the Canadian and American fish-farming sector varied, there was an overall tendency to see the Canadian fish-farming industry as superior in some way.

• Some thought Canada had an edge over the U.S. especially with regard to salmon, and noted that the U.S. focused on different species, like tilapia and catfish.

• Some saw the Canadian industry as larger and more developed than the American.

• One participant believed that all Canadian farmed seafood products were generally better than American, but didn't understand why he felt that way.

• On the other hand, there were some who thought the two industries were quite similar, in that they were both still in the developmental stages. And, one participant saw the U.S. as having more protective laws than Canada.

Perceptions of Canadian Farm-Raised Seafood

• On the whole, perceptions about Canadian farm-raised seafood tended to be positive, but that reputation seemed to lack strength. In addition, perceptions of Canadian salmon were not as positive as they could be.

• Some participants gave the Canadian farm-raised product a mixed review. For example, one person thought the quality had improved from the past, another felt that the quality depended on the packers, and another said that quality depended on the vendor's reputation.

• A few others commented specifically on Canadian salmon. One stated it was suitable for grocery stores and not high-end restaurants because it was softer and the colour was less appealing than Chilean, and another remarked that west coast farmed salmon was less expensive than its east coast counterpart.

• Participants were asked what they "wondered" about Canadian farmed seafood. Some answered as if they were potential customers, demonstrating a keen interest in the product, wanting to know about:

• Supply and availability (species, availability, pricing, delivery speed, and volumes).

• Sustainability and quality (aquaculture production methods and the environment).

• Most participants could not say how Canadian farm-raised seafood compared with that from countries other than the U.S. because they were unfamiliar with other countries, with farmed seafood, or couldn't compare different species.

• On a positive note, some participants felt that Canada had a better reputation in the U.S. for farmed seafood, better standards than some less developed countries, and was certainly closer, which meant a higher quality product. Canadian quality was described as consistent, outstanding and fresh, the latter due to proximity.

• On the other hand, some stated that Canadian farmed salmon production methods were probably less advanced than those in Scotland, Norway or Chile. Or, as one person suggested, these countries simply may be "more in your face with the advertising." In addition, some participants mentioned higher Canadian prices, due to the lower labour costs in third world countries.

• Most participants thought Canada ranked within the top 5 for seafood imports to the U.S., with some specifying a first or second position. A few distinctions were made between fresh and frozen fish, and between different species such as lake fish in the Midwest, or crab. Several attributed high seafood volumes to proximity between the two countries.
• For salmon imports, most participants also ranked Canada within the top 5, with some specifying a first, second or third position, behind or in competition mainly with Chile. However, some gave Canadian imported salmon a lower rank, citing Chile, Norway and even South Africa as the main challengers. According to one interviewee, price was the main competitive issue.
• Overall, participants cited 3 main reasons why U.S. salmon imports have risen over the years, despite increased unit prices: (1) consumer awareness of the health benefits due to media attention and influence, (2) the availability of salmon as a reasonably-priced affordable product, largely attainable because of aquaculture, and (3) the lack of U.S. salmon fisheries or farms.

These findings about the perceptions of Canadian aquaculture and farm-raised seafood confirm that some effort should be made to better position Canada as a leading, modern, responsible and strictly-regulated farm-raised seafood supplier to the U.S.

Perceptions of Canadian Seafood Suppliers

• Throughout their interviews, most participants emphasized how important "personal relationships" were in the seafood trade.
   

• Most who did business directly with Canadian seafood suppliers said their experiences were positive, and spoke highly of the Canadian companies and people with whom they dealt. However, some indicated mixed experiences, and a decrease in business with Canada due to some unfortunate business practices, as well as price. Some stipulated that their connection to Canadian suppliers was indirect, through importers or other types of supplier, and others had never dealt directly.

• Most who did direct business with Canadian seafood suppliers seemed to appreciate their concerns about sustainability and the environment.

• However, some complained about: (1) monopolies, related to salmon and lake fish, (2) uncertainties around product and price, and (3) the lack of value-add.

• When asked what they "wondered" about Canadian seafood suppliers, those who responded tended to focus on (1) requests for information about both wild and farmed product, as well as (2) Canadian farming methods and practices. Some even wondered why they had not been contacted, to date.
• Some participants stated they would consider doing business with Canadian seafood suppliers because of product availability, quality and consistency, price and proximity.

This feedback suggests that American seafood dealers are quite motivated to partner with Canadian seafood suppliers because they believe their key procurement requirements can be met.

• However, two potential barriers were mentioned: (1) the lack of promotional materials and efforts, and (2) the lack of flexibility regarding changes to value-add requirements.

Concluding Comments

While findings from this study reveal a strong market potential, they also point to a motivational unbalance regarding Canadian aquaculture products, i.e., U.S. seafood buyers generally expressed a readiness to deal with Canadian suppliers, but their lack of information on Canadian products and their procurement requirements need to be addressed.

1) Canada as a country was held in high regard, and Canadian products were generally given the benefit of the doubt, which bodes well for the Canadian seafood industry.

• There was a generally positive perception about Canada as a country, with images of clean water, open spaces, and lots of green. Those who knew very little about Canadian seafood or aquaculture tended towards these images.
• There was also a perception that Canadian seafood products are at least equal to or better than U.S. seafood products, and certainly better than those from most other countries.
• Proximity was the only important comparative or competitive strength of Canadian suppliers that was clear to the seafood dealers in the study.
• However, to dealers in this study, the positioning of Canada as a seafood supplier was unclear or undefined with regard to sustainability and consistency. In addition, Canadian suppliers were not seen as dynamic and pro-active as their competitors, including those from Chile.

2) U.S. seafood dealers repeatedly said they needed information on Canadian products and aquaculture production to help them purchase and plan their seafood programs.

• Consumer promotional and educational material was very important and would be quite welcome, especially ready-for-publication pro-farm supportive information to counteract negative efforts against farmed fish by some environmental groups and organizations, as well as the general media.

• Such information not only needs to present the benefits of farmed fish (i.e., sustainability, lower-cost, healthy and free from toxins found in the ocean, etc.,) but also to convey modern, environmentally-friendly and sustainable production methods.

• Certification labels were also welcome, as long as they came with sufficient explanations for the consumer, and the requisite marketing or point-of-sale promotional materials.
   
• In addition, compared to its key competitors, Canada was thought to be lagging with regard to information about supply, availability, sustainability and quality:

• Supply and availability (species types, immediate and future availability, pricing, delivery speed, and volumes).

• While the U.S. is a price-sensitive market, that was not the only criteria important to seafood dealers. Continuity and consistency of supply were very important, not only for restaurants who did not want to change their menus all the time, but also for major buyers who have to fill their contracts with their resale clients.

• Long-term procurement contracts could become important for farmed products.

• Sustainability and quality (aquaculture production methods and the environment).

• For some dealers, sustainability and fish-farming trends and issues were seen to go hand-in-hand.

• Others knew almost nothing about aquaculture in Canada, but were open to learning more.

• Still others talked about quality being geared to the various market segments, indicating a need for quality differentiation.

3) U.S. seafood dealers said they wanted close personal relationships and marketing partnerships to help them succeed in the seafood market.

• Thus, there was some resistance to electronic integration with suppliers, as participants insisted on the importance of personal contact.

4) U.S. seafood dealers needed flexibility and pro-active attitudes from their suppliers to meet their product value-add requirements and changes.

5) U.S. seafood dealers in this study confirmed the popularity of salmon as a current and future best-seller.

• However, for several, the quality of Canadian farm-raised salmon was lower compared to other import countries such as Norway, Scotland and Chile. It was said that Canadian salmon is more suited for grocery outlets than for high-end restaurants or consumer segments, a perception based on the artificial (i.e., dyed) colour and texture of farmed salmon.
   

• Canadian farmed salmon does not seem to meet the requirements of high-end restaurant chefs.

• There may be a need for salmon quality differentiation, especially related to the various types of Canadian salmon products available.

In Conclusion

• Canadian aquaculture products would seem to have the ability to capture the interest of serious American seafood buyers. However, their potential to impact the U.S. seafood market depends on the ability of Canadian suppliers to:
   

• Provide various communications materials with a strong focus on consumer and trade education on a range of important topics, such as sustainability

• Ensure continuous and consistent supply

• Build good personal relationships, and

• Adjust to changing product value-adds requirements.

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MORE INFORMATION

Research firm: Les Études de Marché Créatec+
PWGSC contract number: FP883-071001/001/CY
Award date: 2007-02-26

For more information on this study, please e-mail info@dfo-mpo.gc.ca

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[1] Two-thirds of all seafood in the U.S. is sold through restaurants and other food service outlets (away-from-home consumption) – POR-400-06 - Literature review on the U.S Seafood Market – March 2007 – Createc+. [ return to text ]

[2] Atlantic salmon remained the second best seller (after shrimp) and the fastest growing item from 1994 to 2004 – POR-400-06 - Literature review on the U.S Seafood Market – March 2007 – Createc+. [ return to text ]

[3] Current imports account for more than three-quarters of total U.S. fish consumption.  The future U.S. seafood supply will continue to depend even more heavily on imports, especially aquaculture products – POR-400-06 - Literature review on the U.S Seafood Market – March 2007 – Createc+. [ return to text ]

[4] It is estimated that by 2020, when the demographic effect (aging and ethnic diversity) on per capita consumption and population increase are combined, the increase of the U.S. seafood market will be 25-35% above the current level and that seafood will become the fastest-growing sector of the U.S. protein market, outpacing poultry and beef – POR-400-06 - Literature review on the U.S Seafood Market – March 2007 – Createc+. [ return to text ]

[5] It is estimated that on a volume basis, aquaculture currently supplies about 20 percent of the U.S. seafood demand. This figure is likely to rise to 40% by 2020 – POR-400-06 - Literature review on the U.S Seafood Market – March 2007 – Createc+. [ return to text ]