Fish from the farm are helping supermarkets do a better job of marketing seafood, and are likely to play an even bigger role in seafood departments in the days to come, according to retailers and industry experts.
Making steady progress in recent years, aquaculture is now a major component in most retailers' seafood strategies, and the prospects are good for more species to be farmed in numbers that are commercially viable.
Experts estimate that probably all the trout and catfish sold in supermarkets across the country is farmed, for example. Nearly 70% of salmon and around 50% of shrimp in stores is supplied by aquaculture operations. Sales of farmed tilapia are increasing along with sales of aquacultured oysters, clams and mussels.
Then there's farmed catfish, which currently is seeing consumption in the United States come close to 1 pound per capita -- and that is with many domestic markets yet to be penetrated. It is an aquaculture success seemingly hampered only by provincial tastes. Although no longer considered a strictly regional species, freshwater catfish has not yet made its mark in the Northeast and the Northwest, where cold water wild species such as cod, haddock, flounder, pollack and salmon continue to dominate.
As the availability of farm-raised seafood products increases, so does the category's presence in supermarket seafood cases -- and retailers think that is just fine.
"I'd say between 30% and 40% of what's in our case at any time is farm-raised," said Rick Cavanaugh, seafood manager with the three-store Queen Anne Thriftway company, operating in the sophisticated seafood market of Seattle.
"I rely on it," said Cavanaugh. "Without it, we couldn't have the variety." He put his finger on a major plus for farm-raised fish: It exhibits the characteristics that supermarket operators like a lot, such as consistency in supply, quality, and even pricing.
The growth in aquaculture is not due to any problems with the quality of wild-caught seafood necessarily; in fact, certain segments of the food business, such as some high-profile chefs, for example, argue that wild fish tastes better.
But the above-mentioned pluses for retailers -- particularly supermarkets, which have wrestled for years with the volatility of wild-caught supplies -- mean that fish farms are likely to be relied on more than ever.
The consistent nature of aquacultured inventory is a clear boon to retailers in their attempts to master seafood marketing.
"The supply is more reliable for advertising," said Howard R. Johnson, a Bellevue, Washington-based consultant. "Retailers must book advertising three weeks in advance. If there's a storm and the boats don't go out, they might not get the wild-caught product. Besides, the quality of farmed product is more uniform and the prices are predictable."
What is not quite as clear, yet, is whether fish farming can or should play a greater direct role in retail marketing messages. Some retailers interviewed by SN said they are eager to tout the fact that certain types of their products are farmed, while for others, it is considered a potential mark against their departments.
Johnson said that one upscale chain in the Pacific Northwest advertises its salmon as farmed to account for the product's lower price tag compared to wild-caught fish. "Our consumers are savvy, and because wild salmon is perceived as having a richer taste, it commands a higher price," he explained.
Cavanaugh of Queen Anne Thriftway wouldn't brag about farmed fish at all. "We don't push the salmon as farmed," he said. "One of our stores is located across from where the fishing fleet that fishes Alaskan salmon is docked. They don't like farmed salmon."
In this region, car bumper stickers can be spotted sporting slogans such as 'Wild Salmon Don't Do Drugs," one of the arguments often raised by those on the wild side of the debate. In areas with large populations of fishermen -- who may feel their livelihoods threatened by farmed products -- many consumers are convinced that the use of fish feeds, with colorants and medicinal additives, mean farmed fish are inferior and less healthful than their free-range cousins.
"Some stores won't carry farmed salmon at all," Cavanaugh added, but his operation is not one of those. Queen Anne Thriftway carries farmed salmon in the winter when fresh wild salmon is unavailable, and it carries many other farmed species, as well.
Most retailers said they identify the fact that a product is farmed in their newspaper ads and at the seafood counter. Some of them question what that means to many customers, and even whether it means anything at all.
"I don't know if the public has enough information on farm-raised seafood," said Larry Daerr, seafood specialist for Minneapolis-based Supervalu's Pittsburgh distribution center. "I have a big question in my mind about whether it makes any impact with customers. I don't think the average customer puts that much thought into it."
Nonetheless, Daerr said he does not shy away from the topic. "I hammer it. I play it up big," he said. "I want to know the customer considers the fact that the product is farm-raised.
"Farmed product has a scientifically regimented diet, consistent color, flavor and availability. There's definitely a benefit to the retailers, because they get a consistent good-quality product, and this is a benefit to the consumer, even if it's unbeknownst to them," Daerr added.
Al Kober, buyer and merchandiser of fish and seafood for Clemens Markets, a 16-store chain out of Kulpsville, Pa., operating in Bucks and Chester counties, considers fish farming a good story to tell.
"It's a value-added tool," Kober said. "We advertise as farm-raised. If it has a brand, we use it. It gives the product credibility with consumers and gives us greater control."
"It's a perception thing," agreed Mike Bavota, a seafood specialist with Florida Food Marketing, a food brokerage company. "To consumers, farm-raised means cleaner," said Bavota, whose firm does $2 billion in sales, mostly to retail stores.
"The fact that a product is farm-raised usually finds its way into newspaper ads. That means it offers an additional value to the consumer. Besides, retailers are less likely to disappoint customers because they'll have the product they advertise. Farm-raised products are easy to source," Bavota said.
And prices are not only predictable, but usually highly competitive, said retailers and other industry sources.
The experts said farmed product usually doesn't have much of an edge over wild-caught when it comes to shrink, as long as retailers are getting high-quality fresh wild product. However, if wild product is not top quality, the more predictable shelf life of farmed product is definitely another plus. Farmed finfish are usually shipped to the supplier the day they are taken from the pens.
Sources also agreed that farmed product is in the retail seafood case to stay. "The percentage is significant and growing," said consultant Johnson.
Retailers are eager for that growth to continue, and want the practice to expand to other species besides the handful with which it has made its mark so far.
"Farmed product takes the guesswork out," said Kober of Clemens Markets. "In the winter, we sometimes can't advertise anything except frozen or farmed products.
"As the industry develops, we hope they'll add species such as cod, maybe by doing things such as 'finishing' wild species. There's nothing but advantages in most cases. The only restriction is transportation," Kober noted.
Said Cavanaugh of Queen Anne Thriftway, "It's a good replacement for fish that's overfished. It could conceivably give us a consistent supply of fresh seafood in every category, eventually." Cavanaugh added he is looking forward to a commercial supply of farmed halibut.
Another thing retailers want from seafood farmers is the same thing they are clamoring for from providers of most other fresh food: more value-added products.
Value-added is "a real opportunity for seafood farmers," said Johnson, who spent 25 years in the seafood business before becoming a consultant.
"The catfish people are doing it with their marinated fillets. The boneless salmon fillets out of Chile are another good example. Whether it ends up in the fish department or the HMR section, I'm not sure, but I think it's the way to go."
Johnson added that right now, sales of the lesser-known farmed products would be greatly enhanced through increased promotion.
"The salmon marketers did very effective generic promotion of salmon," he said. "They were the last to do it. But the effort was mostly funded by the Chileans; they dropped out when the antidumping suit came up."
He conceded that one obstacle could be that "the aquaculturists don't have the money, but they should spend some money on promotion; it really does work. Most retailers like to see some promotional activity. I think tilapia sales would really increase."
Supervalu's Daerr is also looking for the farmed versions of other traditional species. "I'd like to see farmed cod. I know they've dabbled with it and they're still working on it," said Daerr. "I'd like to see more staples of the industry farmed, since the wild stocks are down."
In many cases, such species, as of yet, have not proven as cost-effective or as quick to raise as salmon or the freshwater tilapia. And no one would predict which hot farmed item was looming just beyond the horizon; sturgeon was mentioned as one specie that is already available farmed, but is expensive.
"There's a lot of 'flavor-of-the-month' out there, but nothing big that I've gotten excited about" in the farming community, said Johnson.
The need is surely there, as far as supermarket seafood departments are concerned. "I'm looking at 40 or 50 varieties of seafood in my case," said Cavanaugh. "So, I'll look at anything they can farm-raise."
Worldwide, aquaculture is growing rapidly and will continue exponentially, according to the Food and Agricultural Organization of the United Nations. In its latest report, The State of World Fisheries and Aquaculture, issued in 1995, farmed seafood production in 1994 was shown to have reached 18.56 million metric tons, or nearly 24% of fisheries product used for human consumption.
Still, by 2010 production of farmed seafood will have to have doubled from 1993 levels 16.5 million metric tons just to proportionally keep up with present levels of per capita seafood consumption as the world's population increases.
"The challenge is formidable," according to the report. But analysts think seafood producers can meet the challenge.
Meanwhile, the present market is facing some turmoil in the form of foreign producers facing legal challenges from domestic farmers.
The Fair Atlantic Salmon Trade group, representing salmon growers in Maine and Washington, brought suit against Chilean salmon farmers last year claiming that the Chileans benefited from unfair subsidies from their government, and that they were dumping salmon in U.S. markets at below their production costs. The domestic farmers seek up to 42% tariffs against Chilean growers.
Several domestic organizations have joined the fray on behalf of the Chilean salmon farmers, saying the U.S. markets could not be supplied by domestic producers, particularly since the Chileans supply most of the salmon fillet markets. But FAST director Joseph McGonigle in Maine says the tariffs would not stop the flow of Chilean salmon, but simply would allow unsubsidized U.S. producers to compete.
The U.S. Department of Commerce has made two preliminary rulings in the suit. The first found in favor of Chile, saying its farmers were not unfairly subsidized, but the agency levied a small, 0.62% countervailing duty on Chilean exports.
Early last month, a second preliminary ruling found in favor of U.S. growers, saying at least 35 Chilean growers were dumping fish and must pay a 5.79% duty. A few were found not to have dumped product and a few others were subjected to duties ranging from 3.31% to 8.27%.
Final rulings by the USDC and the International Trade Commission are expected by May following on-site inspection of documents by investigators.
Domestic production faces challenges as well, since U.S. environmental laws are more stringent than those in third-world countries where permits to flood millions of acres to raise tiger shrimp or to fill miles of near-shore waters with fish pens are easier to acquire.
Despite problems with environmental impact statements, lease permits and the cost of coastal real estate, farmers on both coasts in the United States and Canada are successfully raising salmon, mussels and oysters in large commercial quantities. Farm-raised scallops, halibut and arctic char are moving into the commercial realm.
The first successful hatchery for summer flounder, GreatBay Aquaculture in New Hampshire, is growing out its first crop of farmed flounder and selling fingerlings to several other producers.