Q&A: Tilapia at a crossroads?
Thanks to the advent of aquaculture in Asia and Latin America, perhaps no whitefish has climbed the ranks faster than tilapia. The species emerged from obscurity just 10 to 15 years ago to become America’s fifth favorite fish, at 1.2 pounds per-capita in 2009, trailing only shrimp, canned tuna, salmon and pollock. Tilapia’s popularity is also growing in the European Union, which imported about 30,000 metric tons of the fish last year.
Now the global tilapia industry is at a crossroads of sorts, battling for market share with other farmed whitefish species like pangasius and catfish while facing the possibility of consolidation at the production level.
Among the tilapia experts speaking at this week’s Tilapia 2010 conference in Kuala Lumpur, Malaysia, is Norbert Sporns, CEO of Seattle-based HQ Sustainable Maritime Industries, a vertically integrated tilapia producer in China’s Hainan province. Ahead of the three-day event, which kicks off on Wednesday, Sporns talked to SeafoodSource about keeping American consumers hooked on tilapia, the prospect of industry consolidation and the future of global tilapia aquaculture.
Hedlund: Are tilapia production costs on the rise in China, the world’s No. 1 tilapia producer? Is industry consolidation on the horizon?
Sporns: The cost structure in China is changing. Tilapia is no longer as inexpensive as it used to be because labor is much more costly now — about 40 percent more costly than a year-and-a-half ago. So it’s becoming difficult if you are working on a traditional model of just farming and filleting [fish] and selling frozen fillets, [or if] you’re not benefiting from the byproducts, doing any value adding or receiving the product on the American end. We’re dealing directly with the buyers. So for many producers, it’s a challenging time. It’s these kind of events, though, that will lead to consolidation in the industry, which I think is desperately needed. We need more Tyson-type [companies] — what Tyson is for chicken is what we need for tilapia. We need that vertically integrated model and the ability to generate pricing that covers your costs and a ‘normal’ profit that you can manage over a longer period and not be living hand to mouth as pricing fluctuates. With tilapia, the market goes down below what is acceptable for many farmers.
Talk about tilapia’s rise to prominence in the U.S. market. What advantages does tilapia have over wild-caught whitefish like pollock?
In the United States, tilapia is now the No. 1 whitefish entrée. Pollock is slightly more on a per-capita basis, but it isn’t viewed by mainstream America as an entrée item. It’s more of a [breaded and fried] fish sandwich. You don’t go into a restaurant and ask for a pollock fillet. Everywhere now you’re seeing tilapia identified as such on the menu, which wasn’t the case three years ago. So it’s become widely excepted as whitefish entrée. Children like tilapia because it doesn’t have a fishy taste. You don’t have bones and skin to deal with when buying a frozen fillet. That type of market appeal is hard for a more traditional whitefish to beat, especially with the cost structure. Ocean-harvested whitefish aren’t going to get any cheaper.
What about pangasius and catfish?
[Pangasius and catfish] are catering to different palates, different markets. There are various grades of pangasius, and some of them come pretty close to the flavor and texture profile of tilapia. But tilapia definitely has a head start, especially in the United States.
What advantages does tilapia have over competing center-of-the-plate proteins like beef and poultry? Is convenience a big selling point for your tilapia products?
We’ve been pretty active in rolling out our Lillian’s Healthy Gourmet [tilapia] meals, and we have more [new products] in the pipeline. We have a product that’s garnished with a sauce and vegetables. It doesn’t have the carbs, but it has the protein. For many Americans, they don’t know how to prepare fish. They’re not comfortable with that. So by having a garnished product, we’re able to meet that.
What about health? Are there certain segments of the American population that you’re targeting with your tilapia products?
Because our meals are formulated gluten-free, we have [received] strong endorsements from the celiac associations, which is an increasing opportunity since there seem to be more and more people who are not only [affected by] celiac [disease] but are also recognizing allergies to gluten. And they’re looking for meal solutions that are easy. (Editor’s note: Celiac disease, also known as gluten intolerance, is a genetic disorder of the small intestine that affects between 1 in 105 and 1 in 1,750 Americans.)
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