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March, 2018 Summary China Aquatic Products Processing

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ASMI International Activity Report China p. 1 ASMI International Activity Report ASMI China FY 17/18 January – March, 2018 Summary China Aquatic Products Processing and Marketing Alliance (CAPPMA) has established a new sub-branch for salmon along with other branches including carp, tilapia, shrimp, fishmeal, re-processing, and marketing. CAPPMA has an active voice in the seafood industry in China, which is a huge market for salmon consumption. China is the fastest- growing importer of salmon and producer, according to CAPPMA. The branch will play an important role in industry and market information dissemination, policy advice, industrial/financial integration and international exchange. Norway exported 2.6 million tons of seafood worth US$11.7 billion in 2017, a record high both in value and volume according to the Norwegian Seafood Council. This represents an increase in value of 3 percent, and an increase in volume of 7 percent from 2016. Of the total value of Norway's seafood exports in 2017, 72 percent came from aquaculture and 28 percent from fishing. Measured in volume, the distribution was 40 percent from aquaculture and 60 percent from fishing. Salmon is the most important species for Norwegian seafood exports, with over 68 percent of the total export value and 38 percent of the volume. The country exported 539,000 tons of seafood to Asia in 2017. This is an increase in volume of 12 percent, or 59,000 tons, from 2016. The emergence of the “new retail” strategy, which comprises both an offline and online component, is set to reshape consumption in China. The growth of high-income consumers has become a key driver for premium brands and high-quality food products, especially fresh-caught seafood. Taking advantage of these trends, 7Fresh is JD’s first offline fresh food supermarket in Beijing began operating Jan 4, 2018, covering an area of 4,000 square meters. Other major e-commerce companies have jumped into the fresh food sector as well, like Alibaba’s Hema Xiansheng, which began operating in February 2018. Experts agree fresh food supermarkets are still in their infancy and only time will tell if they will prove profitable. Wang Xiaosong, JD senior vice-president in charge of 7Fresh, said the company will open more than 1,000 such stores across the country in the next three to five years. According to market research company iResearch Consulting Group, China's fresh food retail market is developing rapidly, with a growth rate of more than 50 percent each year on average. The transaction volume of China's online fresh food market reached about ASMI International Activity Report China p. 2 139.13 billion yuan (US$21.6 billion) in 2017, an increase of 59.7 percent. This explosive growth will undoubtedly affect more traditional supermarkets like Wal-Mart and Carrefour, prompting them to expand services online. At the end of March, President Trump imposed tariffs on imports of aluminum and steel from China and other countries, sparking the beginning of a potential tit-for-tat trade war between the world’s two biggest economies. In response, China announced additional tariffs on 128 U.S. products ranging from pork to fruit to steel pipes. Official responses from China’s commerce and finance ministries indicate they will impose tariffs of 15% on 120 American products — such as fruits, nuts, wine and steel pipes — and 25% on eight other products, including pork and recycled aluminum. President Trump has also indicated he has more tariffs to be levied on products falling across China’s tech-related industries. Without any official announcements yet, only time will tell if this news will trigger any additional countermeasures. As of now, there are no immediate impacts in terms of related tariffs for Alaska seafood. ASMI International Activity Report China p. 3 Activity Number: M17GXCHXC1- Consumer PR Activity Budget Spent to Date: US$102,716 Activity Description: Alaska Seafood Recipe Development: For FY 2017/18, ASMI China will continue to develop unique recipes targeting Chinese consumers, providing information on how to best prepare and enjoy the Alaska seafood purchased. While the availability of Alaska seafood has increased over the years, there are still many consumers who may find storage and preparation of Alaska seafood products challenging. Therefore, recipe books and online recipes will serve as an essential tool in helping consumers derive the most benefit from their purchases. The recipes will be designed to follow a certain theme, such as children’s meals or dishes inspired by Chinese medicinal/health philosophy. Cooking styles will be varied to cater to a wide audience and provide a diverse culinary experience. The recipes will also be posted on social media, through both ASMI China’s Weibo and WeChat accounts, providing expanded market reach. In addition to well-known products like Alaska king crab, snow crab, salmon and black cod, ASMI China will also devote more efforts to developing recipes to educate Chinese consumers on the proper handling of other Alaska seafood like Pacific cod, yellowfin sole, pollock, pollock roe, herring roe, and sea cucumber. Press Coverage Campaign Print media still holds the most influence in China’s growing online media industry, and ASMI China has been running press coverage campaigns for years to help position Alaska Seafood as one of China’s premier imported seafood products. Information on products and promotional events will be advertised through local, regional and national magazines and newspapers. ASMI China will also enhance its presence on online media, selecting a greater number of online platforms to reach an even larger audience for FY 2017/18. Two rounds of press coverage campaigns will be conducted in Shanghai, Beijing, Guangzhou, and selected second-tier cities. Advertorials and Advertisements Advertorials and advertisements are some of the most effective ways to promote the quality of Alaska seafood, emphasize its “wild, natural, and sustainable” characteristics and also highlight its rich nutritional content. ASMI China will therefore place a greater focus on online media and release increased advertorials and advertisements, also targeting major lifestyle and culinary magazines, in addition to local and national newspapers. After the success of the first subway advertisements in Shanghai, ASMI China will once again launch a subway advertisement campaign in another first-tier city, such as Shanghai, Beijing and ASMI International Activity Report China p. 4 Guangzhou, which has a highly-developed subway system and millions of riders per day. Popular items such as Alaska king crab, salmon, and black cod will be featured in the advertisements, highlighting their Alaska origin, to educate consumers about product source. Date of Activity: 1. Alaska Seafood Recipe Development Completed in third quarter. 2. Press Coverage Campaign The first round of press coverage campaign was completed in the second quarter. The second round is still in progress and will be finished in the fourth quarter. 3. Advertorials, Advertisements, and Video Advertising One advert was published in the Shanghai Times newspaper, March 7-14, 2018. 4. Media Tasting Event Held in Hangzhou, March 8, 2018 Summary of Activity: 1. Alaska Seafood Recipe Development ASMI has developed two sets of Alaska seafood recipes consisting of a total of 24 Chinese cuisine recipes. A variety of Alaska seafood including sockeye salmon, pollock, Pacific cod, black cod, yellowfin sole, king crab, snow crab, sea cucumber, and pollock roe/herring roe. Two recipe books have been produced, one with all 24 recipes targeting foodservice industry and one with 12 selected recipes for consumers in China. 2. Press Coverage Campaign The first round of press coverage campaign has been completed in the second quarter. The second round is still in progress and will be finished in the fourth quarter. 3. Advertorials, Advertisements, and Video Advertising One advert was published in the newspaper of Shanghai Times in the issue March 7-14, 2018. Alaska seafood product information and recipes were introduced in this issue. ASMI International Activity Report China p. 5 Name: Shanghai Times Date of Issue: March 7, 2018 Brief Translation: Alaska Seafood Alaska is home to 34,000 miles of coastline and home to a variety of Alaska seafood. One particular species is whitefish, specifically pollock. Characteristics for Alaska pollock including its flavor profile and suitable cooking methods are discussed. The ad concludes with a recipe for Alaska pollock. 4. Media Tasting Event ASMI China hosted a media tasting event in Hangzhou on March 6, 2018. Invited media were treated to a wonderful food demonstration featuring Alaska seafood, and given the opportunity to participate in a tasting, rounding out a complete Alaska seafood experience. The purpose of the event was to further promote Alaska seafood, enlightening the media about its characteristics, and involving journalists and KOLs, to publicize the information to the masses. An Alaska seafood chef competition will be planned for Hangzhou in early May. We hope that the media event will increase the exposure of Alaska seafood to more chefs in the HRI sector. Twenty participants included journalists from key lifestyle magazines and newspapers, influential online personalities from Hangzhou, Shanghai and the Eastern China area, as well as KOLs to help showcase the brand power of Alaska seafood. The executive chef from Hyatt Regency Hangzhou was invited to do the cooking demo using Alaska seafood. The media tasting event featured premium Alaska seafood like snow crab, sockeye salmon, black cod, pollock roe as well as price point products such as pollock and ASMI International Activity Report China p. 6 yellowfin sole. This helps newer, lesser-known products gain exposure quickly, which benefits the launch of new-to-market products. Current Quarter Results: 1. Alaska Seafood Recipe Development • Results: 24 different Chinese recipes will be developed to cater to the tastes of Chinese families.
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