EMS creating opportunity for coldwater shrimp in US

 Speaking at the International Coldwater Prawn Forum in London on Nov. 21, Sackton suggested continuing high prices – a result of the shortage in Asian supplies caused by early mortality syndrome– will allow a wild-caught, higher quality coldwater shrimp to take some of the market, if it can be differentiated as a product.

If that difference can be captured and communicated as evidence of why coldwater shrimp is worth more, then the US could begin to see some substitution between warm and coldwater, he said.

Lent 2014 was pinpointed as the time that high prices will really start to reach consumers on warmwater shrimp. So far the price spread between coldwater and warmwater shrimp has not seen substitution, but around Lent as that difference is passed on to consumers more, lower-priced seafood could see more demand, said Sackton.

Retail sale continue to be strong for warmwater shrimp in the US, and retailers are concerned over damaging this. Thus, so far, they have only passed on a portion of the price increases to their customers for fear of losing the usually-strong holiday season trade.

The extent to which coldwater prices will be accessible to consumers will depend on how far prices are set by the export market, he added. There has been an increasing trend for Canadian shrimp to be sent to Denmark for processing and distribution to the EU, with 2011 exports to the US standing at 16%, compared to 27% in 2009.

So far, despite some price increase, there has not been much substitution of warmwater for coldwater shrimp outside of the traditional markets (largely the west coast, where the biggest fishery is).

With warmwater shrimp prices high and supply low, there is room for companies such as US west coast fishers Pacific Seafood to win back market share if it invests for the future, said Charles Kirschbaum, an executive with the firm.

“If the sector can match or beat the pricing of competitors’ shrimp, we can gain market share,” he said.

“We can target that aquaculture sector – if we match it on price, consumers’ choice is easy to make based on taste and quality.”

“Coldwater prawns need product differentiation beyond the west coast. They have great marketing potential in their wild, MSC, and taste, but they’re not currently seen as a center of the plate protein”

He, like other speakers, spoke about the ‘story’ behind the product and marketing it based on natural, wild-caught imagery, particularly with the Marine Stewardship Council certification it has.

The other key for expanding the market in the US was investment, said Kirschbaum.

Freezing, peeling technology, marketing and packaging, and generally upping the quality of wild-caught coldwater shrimp would give a fighting chance, he said, adding that Pacific Seafood had invested several million dollars in this.

The situation for the US west coast shrimp industry has been tough in the 2000s, since the influx of farmed warmwater prawns began arriving. This capitalized on the fact that as coldwater shrimp supplies fell in the late 1980s, distributors told customers Asian shrimp was a good substitute and so, when supplies of this began arriving cheaply and plentiful, differentiation was lost along with market share.

However, while landings in most coldwater shrimp fisheries are currently in decline, the US west coast’s is on the rise. Production would have been higher still if not for Pacific Seafood’s plant fire, which put four peeling lines out of action for half the year.

Of particular interest to the west coast shrimp industry is whether other sources can come in and compete in the US market.

India has stepped up its production enormously, but its future depends on how well it manages disease. It has already had some issues with broodstock, Sackton said.

Ecuador too has benefited from Thai supply troubles, though its shrimp is being sucked in by China, which is now a net importer. Even Norway was mentioned, but dismissed due to the costs of exporting to the US.