8) Branding
Aquaculture output in China is under intense pressure profitability given higher wages and other costs and greater scrutiny of environmental standards. How long can China continue to export a low-value product like tilapia fillets? Can China (and neighboring Vietnam) move to up the value chain? Can it follow Thailand’s lead in successfully launching branded products for a region where demand is rising? There are examples of local success, in the Guolian and Baiyang groups’ efforts to produce convenience-style seafood products for the domestic market. But there is no international player like Thai Union or CP here yet.
The opportunities for such players in the national and regional marketplaces are huge. Asia is set to drive global growth in consumer expenditure on food and beverages, with nominal growth in the region over the next five years expected to average 9 percent annually, compared to a global average of 6.4 percent per year, according to Price Waterhouse Coopers. Asia will account for 60 percent of global food and beverage expenditure in 2018. Importantly, expenditure growth as incomes rise and consumer preferences shift towards packaged, processed and value-added food products. Value-add and branding are really starting to matter for the long-term sustainability and growth of China’s seafood sector.
