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Market opportunities for fish from recirculation

Marco Frederiksen, Ph.D.

Izmir, Turkey,17 September 2010 2 of 26 Content

• Background on EU market and

• Main species and their potential

• Market aspects of recirculation systems

• Use of product story, organic production and sustainability

• Conclusions 3 of 26 Main fish importers (2008)

Japan USD 14.5 bill. 13.4 % US USD 14.1 bill. 13.1 % EU USD 45.0 bill. 41.7 % Total big 3 USD 73.6 bill. 68.1 %

Total world USD 108 bill. 100 % 4 of 26 EU market

• Around 12 million tonnes consumed per year • First market in value Household consumption value 50

45 • More than EUR 45 40 35 billion 30 25

EUR billionEUR 20

15 10

5 0 EU Japan USA

Source: OECD 5 of 26 EU 27 trade balance evolution

14000 0

12000 -2000

10000 -4000 8000 -6000 6000 EUR million EUR million EUR -8000 4000

-10000 2000

0 -12000 1999 2000 2001 2002 2003 2004 2005 2006 2007 Source: COMEXT Imports Exports Trade balance • Trade balance negative and decreasing • Imports levels are huge and increasing • Less than 40 % of consumption covered by own production 6 of 26 EU market

2,500,000 60

55.6 Net supply Consumption (net supply) per capita 50 2,000,000

41.2 40 1,500,000 35.3 31.9 30.7 28.9 30 Tonnes 26 Kg/cap. 1,000,000 24.7 24.9 24.7 22.5 23.2 20.6 21.2 19.2 20 16.4 14.8 15 13.3 500,000 12.4 9.5 10.5 9.6 10 8.1 5.2 5.1 4.2 0 0

Italy Spain Latvia Malta France Poland Sweden GreeceFinland Austria Ireland EstoniaCyprus GermanyPortugal Belgium DenmarkLithuaniaRomania HungarySlovakiaBulgaria Slovenia Netherlands Czech Rep. Luxemburg United Kingdom 7 of 26 EU market

Above 35 kg/cap/year 25< X <35 kg/cap/year 16< X <25 kg/cap/year 5< X <16 kg/cap/year X <= 5 kg/cap/year

Consumption (net supply) per capita (FAO, 2005)

EU Average = 22 kg/cap/year 8 of 26 Sector size

• Total EU aquaculture production = 1.3 million tonnes

• 2 % of world production in 2005 (from 4 % in1996)

• Recirculation systems still marginal in overall production (less than 10% of total EU fish production)

9 of 26 Sector size in a EU context

100 000 < Q < 200 000

50 000 < Q < 100 000

20 000 < Q < 50 000

5 000 < Q < 20 000

Q < 5000 Volume of aquaculture fish production (tons, molluscs excluded)

10 of 26 Main species and their potential

All species are suitable for recirculation systems • Reasons for using it: – Reduce environmental impact of production – Control production environment -less risks for diseases – Avoid user conflicts – from tourism, etc. – Improving growth rate/food use,…hence profitability of traditional species – Farm new species (diversification) that require • Specific environment • Environmental conditions not optimal locally – New high value species 11 of 26 Main species and their potential

• Species in recirculation Small - fast growing - species – Rainbow trout (atlantic ) – Tough price competition 1000 tonnes “minimum” production – Carp – Low value – Seabass, seabream • New species – Flatfishes • Turbot, sole,… – Exotic • Tilapia, barramundi, catfish (Pangasius),…

12 of 26 Traditional species

• Trout – Demand • Trout (along with salmon) is the most well known fish in EU so benefits from EU wide market BUT • Whole trout market on a decline • Added value products (smoked fillet) resist better – Heavy competition from imported trout from Turkey – Many developments towards labelling and sustainability 13 of 26 Traditional species

• Carp – Demand declining (strong competition from other species) – Consumption market limited to • Central and Eastern Europe • Festive periods (Xmas, Easter) – Need for new products to revive market and expand season • Fillets, organic, breaded products

14 of 26 Traditional species

• Seabass, seabream – Demand • Mostly located in Mediterranean countries • UK and Germany on the rise but slowly • Need for product adaptation (fillets, added value) to enter new markets 15 of 26 New species

• Flatfishes – Turbot • EU is sole producer (France, Spain) • Farmed volumes are limited to around 10 000 t but should be growing – investment in Portugal (7000 t forecasted) – Sole • Very good demand for wild sole • But production problems – Trials in NL,…

16 of 26 New species

• Exotic – Tilapia • US vs EU • 170 000t vs 15 000t • 2 000 000 tonnes (liveweight) worldwide – Barramundi • Still marginal (70 t in NL, 700t in Malaysia) • Atlantic, Bulgaria (70 t) – Catfishes • African • Hybrids (Claresse) – Bluefin tuna? – Australian trials with success 17 of 26 Pangasius phenomenon

• From 0 to 600 000 tonnes imported to EU in around 5 years time • In the top 5 species consumed in most market

2.50

2.00

1.50

Kg/Hab. 1.00

0.50

0.00 2003 2004 2005 2006 2007

Source : Seremak-Bulge J., “Market and fish consumption in 2007”, Jastrzebia Gora 2008 EU farmed substitutes ? (Claresse, NL)

Market aspects of recirculation 18 of 26 systems

• Use the production process as a marketing tool – Sustainability is a buzz word – Closeness to market – Full traceability (in both production and feed) – Assurance of safety and quality – Reduced risk for fish diseases Use of product story, organic production, and 19 of 26 sustainability

Many ongoing initiatives for sustainable/organic aquaculture

An ASC label will be launched early 2011 Organic Tilapia (Jordan) Social and environmental standards

Organic trout (Denmark)

Irish Organic Trout Farmed in accordance with standards established by the European Regulation (EC) No 834/2007 and Regulation (EC) No 889/2008 20 of 26 A “test product” recently developed

Organic marinade

MSC labelled (Sustainability)

The lid contains more information Vessel picture Catch position on a map Date of catch, processing dates, names of all companies involved Access to a Web site with a unique number 21 of 26

Example: Web-site - Full traceability tree for all product components

More information on: Producer 1: Kattegat Producer 2: Pelagic Skagen : HG 263 Stromboli Organic marinade: All ingredients 22 of 26

Is there a market segment willing to pay a premium for the

1) Full product story? 2) Organic products/ingredients? 3) Sustainable feed?

Market surveys were conducted by EUROFISH in Denmark, Germany, Russia and Ukraine.

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Sustainability maybe a future trade barrier for export?

Evolve or produce low value segment products only

A development project for an aquaculture product in Turkey? (Test products and market surveys)

Possibilities: Recirculation -Sustainable production Certified organic production Full traceable product story Web site information 24 of 26 Conclusions

• EU is importing more and more • EU natural production sites are becoming saturated • Recirculation technologies – can help satisfy EU markets hunger for fish – can benefit from unique comparative advantages

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• EUROFISH, in collaboration with FAO and AkvaGroup, have published a practical guide to recirculation technologies

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Thank you for your attention

Contact: [email protected]