Despite China’s newfound wealth, caviar producers face a tough sell
China’s consumers have become known for flaunting newfound wealth on expensive wine, lobsters and exotic (and often endangered) coral fish species but they’re not proving receptive to caviar. After much initial optimism, caviar producers have struggled to make headway here.
“Despite extensive marketing efforts, in 2014 we did about the same amount of sale in both locations as the previous year,” says SM Bozorgnia, managing director of Caspian Trading Co., which ships Caspian caviar through hubs in the United States and in the United Arab Emirates.
“As of yet the product has not been fully accepted by the Chinese,” said Bozorgnia, who has relied on expat-friendly Hong Kong and “the cosmopolitan nature of the Hong Kong citizens” for sales in greater China.
A stumbling block is the lack of combined industry efforts to educate consumers and fund marketing campaigns in China.
“We have a lot of information on the nutritional content of caviar and its health benefits [such as] ingredients that are known to improve skin. However, as far as we are aware none of this information has been translated into Chinese and it is not available to the average Chinese consumers,” Borzorgnia said.
Creating recipes that uses caviar in Chinese cuisines could be an important marketing tool, but “the high cost of product” means “most Chinese chefs are unwilling to entertain using caviar on experimental basis in their cuisine,” he added.
Getting sales in China has proven similarly difficult for American caviar producers, among them Michigan City-based Collins Caviar. The firm, which showed its American Golden Whitefish caviar line at last year’s Asia Seafood expo in Hong Kong, has still have not sold into the market yet, “but we are very close to getting our first order,” says company CEO Rachel Collins. The logistics of getting smaller, perishable items into China has been a big challenge, she says. “Freight fees are virtually prohibitive. But how can the Asian distributors commit to a large amount of an untested product in the market if they don't start with smaller shipments! It's a conundrum to be sure.”
Having grown sales in Australia, Collins had a “strong sense” last year that Hong Kong and Asia “may indeed become our largest market in the near future.” For now Collins Caviar is targeting Hong Kong distributors. “They are the only customers, usually, who can bring in enough product to justify all the paperwork costs involved with any order. Thereafter, once some solid distribution is secured, I will be better able to know where it is going in the Hong Kong market. If it is anything like here, the vast majority will be sold into restaurants.”
Norway remains the template for how to run marketing campaigns and build demand for imported high-end seafood (salmon) in China. “However, the Norwegian campaign was initiated by government and salmon producers,” noted Bozorgnia. “Unfortunately, the caviar producing countries and their associations have not so far made an attempt to start a similar campaign.”
That’s also partly because of a shortage of supply and a looming sustainability crisis. “Part of reason lays in the fact that sturgeon fish, which is the source of caviar, has become an endangered species owing to overfishing and pollution, especially oil pollution due to discovery, extraction and transportation of this source around the Caspian Sea. As a result, resources have been shrinking and they are not sustainable,” Borzorgnia said.
To secure supply, Caspian Trading Co. has teamed with sturgeon farms, including the largest of its kind, Emirates AquaTech Caviar Farm near Dubai. “Aquaculture farms can be an economical and environmentally friendly means to produce pollution free caviar on continuous bases. In this respect, we can provide caviar of compatible quality and price that is from a sustainable. We believe sustainability will be an important factor is the sale of caviar in the Chinese and other markets.”
Bozorgnia believes an industry-funded campaign will boost sales of caviar in the Chinese market, “especially if the nutritional benefits of caviar can be highlighted to health-conscious Chinese consumers. However, such a campaign has to be initiated by government or the industry since once it is launched everyone benefits from it. Caviar producers have so far been unwilling to come together and agree on a plan and share the cost associated with this type of marketing campaign.”
Collins says cooperation between caviar producers in marketing to China is unlikely. “[The caviar industry] is too competitive, and really in many ways too small for that kind of cooperation. Also it is too small in many ways for a state- or government-run program to want to get involved. That being said, there are still millions of dollars in trade in caviar, so it is a bit of a conundrum.”