India is the largest shrimp producing country in the world, closely followed by Ecuador. Production of pacific white shrimp ( l. Vannamei ) between 2018 and 2019 showed historic growth, as india reached 700,000 metric tons (MT) in 2019, an increase of 7.69, and ecuador arrived at 633,890 MT, an increase of 23.09, in the same period. Could a unified marketing approach help producers maintain or improve their prices while also diversifying their market? ShrimpTails asked major producers and input suppliers from the two largest producing countries of farmed shrimp for their perspective.
Some initiatives to market products worldwide are already in place at country level. For example, in Ecuador major shrimp producers have joined the Sustainable Shrimp Partnership (SSP) to promote Ecuadorian shrimp as the world’s reference to healthy and sustainable shrimp of the highest quality. SSP products are ASC certified, with a special focus on antibiotic-free practices across the production cycle and full traceability.
In India, the Marine Products Export Development Authority (MPEDA) handles the promotion of all seafood products aimed at overseas markets. In 2018, the MPEDA held seminars on measures against antibiotic usage and microbial management of shrimp hatcheries after the E.U. rejected products from India that contained antibiotic residues.
Meanwhile Vietnam, – the third largest shrimp producer in the world, producing 480,000 MT in 2019 – finds building a Vietnamese shrimp brand with a certified shrimp supply and competitive prices important for the U.S. and E.U. markets, especially since the EU-Vietnam Free Trade Agreement was recently signed.
However, implementing a unified marketing approach for shrimp on a wider scale is still a challenge.
Roadblocks ahead
From a producers’ perspective, implementing a marketing initiative to increase shrimp demand is a welcome development. Producers agree there’s an opportunity to globally increase the demand and position of shrimp as a healthy alternative protein. However, various factors are to be considered.
First, since producers already have established markets, much of their interest stems from how their product can be differentiated from that of other producing countries. There’s a risk in the generic promotion of shrimp as it cannot be considered a “homogenous” product with the same traits and characteristics. Some producers worry that they might lose differentiation in quality of shrimp when pushing a generic shrimp promotion since there are different variations and perceptions of quality.
Second, before producers would invest in collaborating in such an approach, they first would like to see market and consumer data in order to better understand consumer preferences, and use this data to tailor their products to the market.
However, this is a chicken-and-egg situation. It’s a challenge to get producers on board and ask them to commit to a collaborative effort if there is no solid research yet. Then again, in order to fund such a research, prior commitment from importers and/or producers to contribute to a seed funding would be essential. Whether the research or funding should come first, and who should be funding it, are questions yet to be answered. Other options are funding generated and managed by governments or initiated by major importers or exporters.
Getting a fund rolling is definitely a challenge. Some producers are willing to collaborate and have also expressed willingness to negotiate prices with importers to contribute to the funding of the board. However, the majority of producers feels that a marketing initiative should come from the importers as they are responsible for distributing the products to the final market. For the producers, their responsibility ends with ensuring that they deliver a quality product.
Producers envision various ways to place shrimp in the market. Health is one of the most important focuses of marketing campaigns promoting shrimp as a healthy alternative to meat.
“Although people are cutting red meat, they are going for plant-based products instead of seafood. As an industry, I think we are not getting the right message across,” an exporter said.
Aside from healthy proteins, consumers are also looking for safe products. They want to know where their food is from and how it was produced in order to completely trust the product they are buying. That’s why sustainability is one of the main focal points for Ecuadorian producers that are part of the SSP.
“When promoting SSP products, our aim is to focus on the premium quality of the shrimp but also advertise that it’s a pure, clean product raised with care by people who care – whether that’s for their health or the planet’s, our shrimp supports both,” Pamela Nath, SSP Director, said. “SSP shrimp is grown in natural ecosystems and meets the highest environmental and social standards. By demonstrating that SSP shrimp is antibiotic free and by making it fully traceable in every stage of the production cycle we are able to ensure and provide a safe, high-quality product consumers can trust.”
The integrity of the shrimp industry in the supply chain is also something that should be focused on according to Nath. SSP claims that food fraud has increased by 60 percent over the last couple of years due to a lack of transparency, accountability, and effective regulations, and they believe this needs to change.
Another roadblock to be considered is the difference between large and small-scale producers. Unlike Ecuador which has large-scale companies that could back up a marketing initiative, producers in India foresee problems in uniting and rallying small-scale farmers to fund such an initiative. According to one Indian supplier we interviewed, marketing is not really a priority for the majority of producers. Solving production issues is their top priority. As financial resources of small-scale farmers are limited, their budget is mostly used for applying for certifications and ensuring the quality of the shrimp.
“It would be difficult to reach a consensus easily. There aren’t many large players either that have the financial means to really make this initiative take off,” one Indian exporter said. “Indian shrimp doesn’t have much branding, but companies invest more in certifications, upgrading farming systems and improving product quality.”
Building on the belief of differentiation, there are some shrimp producers who feel that a unified marketing approach would allow some industry players to market products which don’t meet the required quality levels. Instead, by allowing companies and/or regions to market independently, greater emphasis can be placed on valued traits such as certifications, traceability, and minimal antibiotic use – which in turn will pressure other players to follow suit, or find ways to improve their offering.
“This is what the SSP aims to achieve,” Nath said. “We’re not only marketing our shrimp, but we are also challenging other producers to join us in improving practices and in demonstrating how good the shrimp industry can be. Let’s not build an industry based on the lowest prices, but one based on the highest quality.”
In summary, there are four major concerns that producers would like to have addressed before they consider collaborating in a unified marketing approach: First, producers want their products to stand out in the market. Second, they want to have a clear understanding of the way the funding will be sourced and used. Third, they want a market study to be carried out first in order to strategize the marketing of shrimp effectively. Lastly, they wonder how the industry will reach a consensus.
This is why producers have different opinions on whether this initiative should be voluntary or not. On the one hand, some claim that a voluntary approach will ensure that this effort will be implemented faster with only like-minded companies committed to it. Others think that only a mandatory approach is fair for everyone. This way there won’t be any freeloaders benefitting from the marketing efforts initiated by others. Yet another idea is to make the approach voluntary until it becomes more established, then it could be made mandatory.
A look into the future
From a producer’s perspective, a unified marketing approach is indeed a welcome development,
but it has its own challenges. Producers should first ask themselves which market they want to target and start working from there. A majority of producers recognizes that a unified marketing approach could help increase demand to match the growing supply, thus improving exporters’ businesses, but many Indian exporters also raise doubts on whether this could actually work for such a fragmented industry.
For India, whose main market is the U.S., traceability is key. Producers are developing this in compliance with the Seafood Import Monitoring Program (SIMP), which requires information on harvest and landing data, and for importers to maintain chain of custody records for shrimp imports entering the U.S. A focus on the safety and integrity of the supply chain (antibiotic-free shrimp and sustainability certifications) could be an opportunity to position Indian shrimp as a more healthy, traceable, and sustainable product.
Moreover, studying consumer trends can help Indian producers in key markets such as the U.S. and the E.U. Indian suppliers have the opportunity to explore and focus on “convenience products” or value-added segments that would appeal to consumers looking for easy-to-cook products.
In Ecuador, the shrimp sector is much more consolidated and less fragmented. Most of the large companies in Ecuador are already connected to the SSP initiative, and are actively funding it. Unlike other models (such as the Hass Avocado Board) in which marketing initiatives are funded by importers, large Ecuadorian exporters themselves are proactively making an effort towards branding Ecuadorian shrimp. However, implementing these marketing initiatives down to the level of small-scale farmers is still an ongoing process.
The goal is to encourage more small-scale farms to improve their production systems and facilitate their transition to ASC certification. Currently, Ecuador’s focus on health, sustainability and traceability through the SSP has been a success in entering the Chinese market, which values high-quality and premium products.
In sum, there are many different opinions on this issue. While some producers are already making strides to promote their own products at the exporters’ level, reaching a consensus on a wider and global scale remains a huge challenge.
However, that doesn’t mean producers can’t work on improving their marketing approach. A producer’s journey towards achieving certified and traceable products can be a powerful marketing tool on its own, as is emphasizing the story behind the product. In marketing their products, major producers already follow key trends in sustainability and traceability. This is surely a trend that will become more prominent as consumers demand more information about the products they buy.
Improvements and steps made to become more sustainable and traceable are a good starting point for producers to tell their story. Engaging their market through constant dialogues with importers and studying consumer trends and preferences can also tip the scales to their advantage. Creativity in getting these messages across via online marketing tools also helps.
Photo courtesy of ShrimpTails
