Seafood Sustainability

Trends, Market Drivers, and Opportunities

John Connelly President

Seafood Sustainability

Topics  Who is NFI  What are the status of stocks  What are the perceived status of stocks   Why the difference between reality and perception matters Industry responses – Wal-Mart case study  Future challenges

National Fisheries Institute

Who We Are   Voice for seafood community in Washington, with the media, and in the marketplace Represent industry from “water to table”  Represent most domestic industry and importers  Committed to sustainable use of resources  Work closely with Petur Bjarnson through ICFA

Relationships Among Key Issues

Where We Spend our Resources

(by discipline)

Legislative Regulatory Communications Health benefits Aquaculture Low Low Trade issues High Access to resources High Economic integrity Low High High Medium High Low Low High High High Medium

Data and Trends in the U.S. Market

Status of Stocks, Consumption Trends

and

The Good News

Seafood Sustainability

Status of Global Stocks

Stable supply of 80 M MT wild capture fisheries since 1986

Seafood Sustainability

Status of U.S. Stocks

Overexploited stocks stabilizing since early 1990s

Seafood Sustainability Variability in Regions Stocks

Variability in management regimes leads to variability in successful stock management

Fish Consumption

What Others are Saying American Heart Association : We recommend eating fish (particularly fatty fish) at least two times a week. Fish is a good source of protein and doesn’t have the high saturated fat that fatty meat products do. Fatty fish like mackerel, lake trout, herring, sardines, albacore tuna and salmon are high in two kinds of omega 3 fatty acids, eicosapentaenoic acid (EPA) and docosahexaenoic acid (DHA). American Dietetic Association : Fish provides a good source of the fatty acid omega-3, which can help reduce the risk of heart attacks. Fish is also a great source of protein, zinc and iron and has less saturated fat, which can increase blood cholesterol. The current FDA recommendation is to eat up to 12 ounces a week.

Fish Conmsumption

What Others Are Saying

U.S. government policy

: Americans should eat fish twice per week

2001

Shrimp 3.4

Canned Tuna 2.9

Salmon 2.0

Pollock 1.21

Catfish 1.15

What Fish Americans Eat

Top Ten Seafoods

2002 2003

Shrimp 3.7

Shrimp 4.0

2004

Shrimp 4.2

Canned Tuna 3.1

Salmon 2.0

Pollock 1.13

Catfish 1.10

Canned Tuna 3.4

Salmon 2.2

Pollock 1.71

Catfish 1.14

Canned Tuna 3.3

Salmon 2.2

Pollock 1.27

Catfish 1.09

Cod 0.47

Clams 0.47

Crabs 0.44 Flatfish 0.39

Tilapia 0.35

Cod 0.66

Crab 0.57

Clams 0.53 Tilapia 0.40

Flatfish 0.32

Cod 0.64

Crab 0.61

Tilapia 0.54

Clams 0.53

Scallops 0/33 Tilapia 0.69

Crab 0.62

Cod 0.60

Clams 0.47

Flatfish 0.39

Data and Trends in the U.S. Market

Consumption Trends

and

The Bad News

Seafood Sustainability Creation of Perceptions

“Mercury is such a potent neurotoxin that even small doses can cause irreversible brain and heart damage.”

“… Farm raised salmon are fed antibiotics, colorants and pesticides!”

Total Negative Seafood Coverage Number of Clips by Year

970 801 605 566 450 2000 2001 2002 2003 2004

So what

-- “I don’t need to be loved …… I just need people to eat seafood.”

Data and Trends in the U.S. Market

Consumer Attitudes

Familiarity Overview

100

Positive seafood messages generally have solid levels of awareness. Negative seafood messages generally have much lower levels of awareness.

0

Believability Overview

100

Positive seafood messages have high levels of believability.

Negative seafood messages have levels of believability just as high as the positive messages.

0

Impact Overview

100

Negative seafood messages have levels of potential impact on seafood consumption just as high as the positive messages.

0

Corporate Image Challenges

Seafood as Part of Broader Campaign

Where is Weakness in This Chain?

Where Would You Attack?

Harvesting Harvest levels Fish Farming Environmental Harvest types eg, bottom trawls Feed issues Processing Food safety Retailers Personal health Related to families and children Susceptible to boycotts New approach (and thus newsworthy)

Seafood Sustainability

Wal Mart’s Challenge: An Example

Wal Mart’s goals is to site 1,500 new stores in the United States.

Seafood Sustainability

Wal-Mart Actions  Third party certified farmed shrimp  Third party certified wild capture products  Logo on certified products  Suppliers work with fisheries on “long term” fisheries  Suppliers work with WWF and CI on “challenged” fisheries  Work long term on selling only certified fish

Seafood Sustainability Certification Schemes: Some More Credible than Others

Seafood Sustainability

Certification Schemes

FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS

helping to build a world without hunger

Report of the Expert Consultation on the Development of International Guidelines for Ecolabelling of Fish and Fishery Products from Marine Capture Fisheries

Requirements, criteria and procedures for ecolabelling of fish and fishery products from marine capture fisheries Three principal procedural and institutional matters:    setting of certification standards accreditation of independent certifying bodies certification that a fishery and the product chain of custody

Seafood Sustainability

Wal-Mart Commitments

Can Wal-Mart Sustain a Softer Edge?

February 8, 2006; Page A2

You have to wonder what the late Sam Walton would have thought if he had seen this Wal-Mart vows to sell only sustainable fish recent headline: ".“ Sustainable fish? Get real. Whole Foods, the upscale retailer, sells "sustainable fish." Wal-Mart, the cost-chopping company Sam Walton created a half-century ago, sells cheap fish . How else can they offer salmon for less than $5 a pound?

But after spending some time with Wal-Mart Chief Executive Lee Scott on Monday, I came away convinced there's more going on here than just public relations. Mr. Scott drives a Lexus hybrid, he touts products that reduce greenhouse gases, and he really believes in sustainable fish . The company has decided that the fresh fish it sells in North America -- excluding farmed fish -- will carry certification labels from the nonprofit Marine Stewardship Council, a conservation group that works to prevent the seas from being overfished.

Seafood Sustainability

Wal-Mart Actions Helping Accelerate Market Action $5 billion sales 1,271 restaurants $67 billion sales 250,000 employees Industrial restaurants/cafeterias $24 billion sales 400,000 employees Industrial restaurants/cafeterias

Data and Trends in the U.S. Market

Challenges in Capacity

2004

Shrimp Canned Tuna Salmon Pollock Status of Fisheries Certification Top Ten Seafoods: Stages of Certification

Wild Capture

______________________________ ______________________________ MSC (Alaska)

Aquaculture

ACC n/a FMI SQL (Chilean salmon) ___________ (Norwegian salmon) n/a Catfish Tilapia Crab Cod Clams Flatfish MSC (Alaska) ______________________ (Russia) n/a n/a ____________________________ WWF and Conservation International ____________________________ ____________________________ ___________________________ ___________________________ n/a n/a n/a n/a

Certified

Seafood Sustainability MSC Certified Fisheries

Undergoing or May Consider Certification

Alaska salmon (214,000,000 salmon) Lobster (North America) Alaska pollock (1,200,000 mt) Pollock (Russian) New Zealand hoki (200,000 mt) Flounder (Pacific) South African hake (166,000 mt) Whiting (Pacific) Pacific longline cod W. Australia rock lobster (12,000 mt) Ocean perch (Canada) Snow crab (Alaska) Burry Inlet cockles (7,000 mt) Dungeness crab Patagonia toothfish (4,000 mt) South Mackerel handline (2,000 mt) Halibut (Alaska) King crab (Alaska) Baja red rocklobster (1,000 mt) Tuna Loch Torridon Nephrops creel (150 mt) Pink shrimp (Oregon) Thames River herring (120 mt)



Seafood Sustainability

Conclusions The seafood community has a unique and healthy product that the public feels good about.   Industry and government have failed to adequately communicate the state of stocks, leading others to fill the void.

Retailers and restaurants must protect their reputation …. and brand.

 Seafood certification systems will grow in importance.

 Seafood suppliers must decide commitment to those customers demanding certifications.

 Seafood suppliers must decide which certification system is best for them.

Takk fyrir

John Connelly [email protected] 1-703-752-8881