GAA: Chinese seafood firms keen to use certifications as conduit to new markets
Worries over food safety and a clamor for international business contacts are big motivators for Chinese seafood distributors to get in touch with western sustainability certification programs. That’s according to Jane Bi, Asia business development director at the Global Aquaculture Alliance (GAA), who talked to SeafoodSource about the strategies the organization uses to grow its Best Aquaculture Practices (BAP) certification program in China. BAP is an international certification program for the entire aquaculture value chain.
Also contributing to the conversation were Steve Hart, vice president of business development, and Mike Berthet, head of business development for the EU region at GAA.
SeafoodSource: Why is there such an emphasis on salmon at the recent conference in which you participated in Shanghai? Obviously salmon consumption in China is rising, but are you leveraging rising Chinese demand to create wider global traction or growth for BAP certification?
GAA: Demand for salmon is increasing rapidly in the Chinese market and there is a growing desire for sustainability and traceability when it comes to salmon entering the Chinese market. Buyers are looking for assurances about the salmon they are purchasing, so they are looking to third party international certification to help with verification. As a result, BAP is seen as a good method to address these sustainability and traceability needs because it certifies the whole production chain. We are working very closely with the markets in Asia who are interested in this type of verification, so that will naturally create additional demand for BAP.
SeafoodSource: What is motivating that growing desire for sustainability in Chinese seafood - and by “buyers” do you mean consumers or distributors?
GAA: By “buyer,” we mean seafood importers, distributors and buyers for retailers and restaurant chains. I believe the motivations are central government’s new sustainability-focused and environmentally friendly policies, high-end retailers and restaurants or hotels updated sustainability or the more broad responsible sourcing policy, and international organizations’ advocacy and promotion. The desire for sustainability is often tied with the demand for traceability and food safety, and the latter two are in high demand.
SeafoodSource: Given salmon are carnivores, surely increased salmon consumption in China means greater demand for fishmeal and puts more pressure on already tight stocks and thus increases the danger of overfishing?
GAA: Currently the Chinese market for salmon is still not very big – although growing fast – and concentrates in Japanese style restaurants and cuisine. The Chinese market favors a size of fish that’s complementary to other major markets, so it doesn’t necessarily mean that the Chinese market is making a big production-increase kind of impact yet. And the main source they import the fish from are producers in an area that cares about their sustainability practices and already have standards in place. The Chinese salmon or trout farmers use much feed produced by big international feed producers who pay attention to their sustainability practices too. All those factors limit the pressure on the fish meal and fish oil from the Chinese market.
SeafoodSource: How can you ensure the salmon you certify has been fed on completely sustainable feed or fishmeal sources?
GAA: BAP salmon standard currently requires a fish in fish out [measurement for the number of wild caught fish fed to aquaculture] ratio of 1.5 or less. In addition, we require 50 percent of the fish meal and oil come from IFFO [global fishmeal and fish oil producers organization] or other certified sources, or fisheries improvement projects. Our standards are always evolving, and both our salmon and feed mill standards are currently being reviewed and updated.
SeafoodSource: What are the lessons that you [Mike Berthet] can bring from your work in the UK to the Chinese marketplace?
Berthet: What we do know is that the most effective way of increasing certification in aquaculture is to adopt a three-point approach. The first is to engage the market place and look for forward-thinking companies that not only embrace sustainability, food safety and welfare but actually have set themselves targets and goals to achieve change. Second is to communicate with the farmers and processors to explain how certification can benefit their business model and make them aware of our contacts in the retail and food service markets not only in China but globally. Third is to encourage open and transparent relationships with Government Offices which support safe, environmentally responsible, animal welfare and social compliance for the future of aquaculture and wild caught seafood.
SeafoodSource: Thus seafood firms and producers in China look to BAP as a conduit to new markets and suppliers?
GAA: Yes, it’s the most important value they see in BAP. On the other hand, to connect the BAP certified producers and suppliers who can supply BAP certified products is one of the most important services to the marketplace BAP provides.
SeafoodSource: What is the consumer level awareness of BAP in China and is increasing consumer level awareness in China a priority for you right now?
GAA: Consumer awareness of all ecolabels in China is on the low side currently but they pay attention to the quality and food safety kind of credentials from the manufactures. From our viewpoint, it is better to work with the marketplace to help share in the messaging to consumers because they have direct contact. Our highest priority in China is to get the marketplace to see the value in seafood sustainability and food safety and work with them to adopt sustainable and responsible sourcing policies. If we can achieve that, we can than work with the marketplace to help them message to consumers using BAP.
SeafoodSource: Is there any difference between Chinese retail and retailers elsewhere -surely this is made easier by the presence of international players like WalMart?
GAA: Yes, international players like Walmart, Sam’s Club and Metro are leaders in the movement of improving their sourcing practices. But in China changes take place fast and Chinese retailers have been fast in keeping up the awareness and practices when it comes to certifications like BAP.
SeafoodSource: You have an impressive list of Chinese companies at your recent conference. I notice most of the speakers are in distribution or marketing of seafood. Have you already reached the big Chinese aquaculture companies?
GAA: We are working with a lot of the major aquaculture companies in China, and around the world. We also work very closely with the end marketplace so that they will adopt sourcing policies and buy from the certified producers. The reason we focus a lot of the distribution and marketing component is because they are the critical in-between points in the supply chain. We need their help to connect the producers with the end buyers. If we can get the distribution and marketing components of the supply chain to also commit to sustainability, we will have a complete win.
SeafoodSource: What is the motivation for these companies to participate in your conference and in BAP? Does BAP help their business and sales?
GAA: We work very hard to help introduce BAP certified producers to the market, by participating in our events, BAP certified companies are getting more exposure to the market that has adopted sustainable sourcing policies.
SeafoodSource: Is BAP certification a realistic goal for aquaculture companies producing tilapia, crayfish etcetera for the domestic Chinese market?
GAA: Yes, we have already been working with companies in this area. The biggest hurdle we run into in China is how to certify small farms. That is still a difficult hurdle to overcome, but we have developed different group and cluster certification models to try and address the issues with smaller farms.
SeafoodSource: Could you please share an example of a cluster certification model in China?
GAA: We have two programs we offer for farms: Groups and clusters. A cluster saves on some costs by auditing up to ten farms at the same time, but the auditor has to visit every farm. A group allows a company to bring together up to 50 farms into a single certification. The company can assign an internal auditor who audits each individual farm and submits the group audit. An independent auditor than reviews that internal audit and then audits a subset of the farms to assure the process. This saves significantly on the costs, but also increases the administrative load on the company. So far, the group option has been very popular in China and we have a couple of groups operating for tilapia producers in Hainan. And there is no BAP cluster in China yet.
SeafoodSource: Are there any Chinese domestic certification schemes similar to BAP? For instance, there are various Green and Organic labels applied to food products in Chinese stores – doesn’t this make it confusing for consumers when you introduce them to BAP?
GAA: There is China GAP for aquaculture farms and China HACCP for seafood processing plants that have similarities with BAP’s farm standards and processing plant standard, but we don’t believe this causes much confusion for consumers, as most of these are easily recognized as national standards at the consumer level and a distinction is often drawn between Chinese national certifications and global certifications. We work to educate the buyers and corporate responsibility officers about the benefits of BAP. If we can keep them engaged, and continue to provide value to them, we will be successful.
SeafoodSource: What’s the biggest challenge in growing your operations in China? Do you have the resources and manpower required in a country as big and varied as China?
GAA: That is exactly the biggest challenge. You can never have enough resources to grow in China. We could double the size of our staff overnight and still not have enough resources to accomplish everything we would like.
SeafoodSource: Is there an increased awareness of sustainability in China which is helping your work?
GAA: We believe so, at the market level. Ecommerce and some of the western-owned retail brands helped introduce the concept into the Chinese marketplace, but now we see traditional Chinese retailers taking over the lead when it comes to adopting sustainability policies. Brands like Yonghui and Hema are just a few of the Chinese retailers who are realizing sustainability is crucial to their long-term business growth plans, and they are now among the leaders in China. These are purely Chinese companies, focused on Chinese consumers.
SeafoodSource: In what sense are they seeing sustainability as crucial to their long-term business growth plans? Is it because the consumer demands it or certain seafood (and other) commodities won’t be available otherwise?
GAA: It is less consumer demand for environmental sustainability, as this is really a new concept in Asia that hasn’t really reached the majority of consumers. However, consumers are looking for food safety and quality. Sustainability is really being driven more by consumers wanting to know that they are getting high quality and safety. Third party certification like BAP allows consumers to see a logo with simple messaging that provides them with a certain level of assurance and comfort. Also, since a lot of international companies operate in China, there is more concern about environmental sustainability aspects at the corporate level because they recognize they need to assure long-term availability of seafood products.
SeafoodSource: Did the increased government environmental regulation in recent years in the aquaculture space help your work in China?
GAA: The government in China has definitely taken a proactive lead in making aquaculture more sustainable moving forward. Their efforts have definitely helped our messaging with the marketplace, and as we continue to develop our work in China, we believe there will be even more opportunity for the push of the Chinese government towards greater sustainability to partner with the work GAA is doing as well.