Industry experts: Tilapia market has room to grow
Few low-price finfish species have the ubiquitous recognition of tilapia.
The species, primarily farmed in Asia, has long been associated with inexpensive entry-level seafood, based on the low cost of production and the low price-ceiling for both buyers and consumers. A perennial staple for the seafood industry, the species has seen relatively flat pricing coupled with a rising supply in recent years.
The flat pricing, coupled with a slow decline in U.S. consumption, is an indication that the species is poised for better market penetration.
“Really, the question producers have been asking is, are we at the bottom of tilapia?” Heath England of The Fishin’ Company, speaking at the Global Seafood Market Conference in Orlando, Florida, said. “We’re seeing some really strong indicators that we are.’
The global supply of tilapia, according to recent data, will have increased from an estimated 6.5 million metric tons (MT) of tilapia in 2019 to an estimated 6.8 million MT in 2020.
That increase of supply is coupled with a relatively flat pricing for the past few years, with prices remaining relatively stable since 2016. U.S. consumption, however, has seen a slow decline in recent years.
That decline, however, could change depending on future supply and price.
“We’re seeing year-over-year growth,” England said.
One advantage tilapia has over a number of other similar species is strong popular familiarity. In most cases, consumers have heard of tilapia, and have tried it before. Compared to fish at similar price-points – pangasius, for example – tilapia has much greater market recognition.
Survey data from Dataessential indicates 84 percent of consumers have heard of tilapia, at least 63 percent of consumers have tried it, and 9 percent of consumers have had it many times. In addition, at least 45 percent of consumers like it or love it, significantly higher than other fish species in the same price-point.
That recognition, coupled with the low price, is why England and others are optimistic that the species will see steady increases over the next several months.
Despite that optimism, England acknowledged that the species still has obstacles to overcome – from uncertainty due to potential tariffs to the negative perception the species has gained from past reputational issues.
The U.S. market for tilapia was impacted by the trade war between the U.S. and China that was kicked off when a 10 percent tariff was implemented against the species – amongst others – by the administration of U.S President Donald Trump. Despite that increase in costs for Chinese tilapia in the U.S., impacts were relatively minimal, according to England. When those tariffs increased to 25 percent, other factors helped mitigate the end-cost to consumers, which kept prices relatively stable.
When the administration first announced that tariffs would increase to 25 percent, England and other suppliers immediately warned their buyers that the price for the species would likely jump. However, due to extenuating circumstances – like increased supply – the price ended up not increasing nearly as much as first anticipated.
“When it didn’t materialize, we were very happy to go in and say ‘we got it wrong, there’s no price increase, you’re good,’” England said.
Despite that lack of a price increase, the uncertainty surrounding the market still stymied some market growth due to large companies being unable to predict what was next for tilapia.
“They’re big, smart companies, they can manage through anything if they have the information and can predict what’s going on,” England said. A lack of ability to predict the outcome or future of the trade was hampered growth in 2019. “One of the things they tend to hate is unpredictability.”
Regardless of the trade-based obstacles, the one obstacle that has remained permanent is the perception of the public. Tilapia’s reputation has had its ups and downs, with occasional negative press doing significant damage to the species’ perception in the public. However, the attention has shifted away recently.
“I don’t see near the amount of negative online media about tilapia that I did over the past year,” Todd Clark of Endeavor Seafoods said.
Whether it is other media items taking up that attention, or a continued improvement of the species’ perception, tilapia has moved on rom its earlier negative perceptions. That leads to opportunity, as the market penetration and awareness of the species gives the market leverage.
“There’s real opportunity with this fish, because people know what it is,” Clark said. “Some of the other species, they don’t have the same benefit.”
Photo courtesy of Elenglush/Shutterstock