Evaluation of South Korea as an Export Market for Alaska Seafood P RESENTED B Y : E RIC R OSENBERG AND K RISTINE F ARWELL B RYANT C HRISTIE I NC . July 27, 2016 1
Bryant Christie Inc. Background • BCI helps companies and organizations open, access, and develop international markets • Founded in 1992, we focus on the agricultural, food, and beverage sectors – International Marketing – Research and Evaluation – Global Access – Data Services – Tech July 27, 2016 2
BCI’s Research and Evaluation Unit Resources and Capabilities • Internal staff of six – global network of subcontractors • Research, trade, economics background • Surveys, interviews, desk research Core Services • Market research studies 3 rd party Cooperator program evaluations • • Trade and regulatory databases
Introduction: Research Objectives • Asses current market conditions for imported seafood/Alaska seafood • Evaluate growth opportunities and constraints By species By sector • Determine the feasibility of an ASMI marketing program in country • Provide tactical recommendations should ASMI choose to enter the market July 27, 2016 4
BCI’s Methodology • Desk research U.S./ASMI/Korean Trade Statistics FAOSTAT USDA/AgCanada/Korean fishery reports • 55 interviews (suppliers, importers, distributors, government officials, retail and foodservice, etc.) • Market visits – Seoul and Busan July 27, 2016 5
The Market in General • Population – 49.1 million • GDP per capita - $36,700 (U.S. ~ $55,000) • 82.5% urban (Seoul, Busan, Incheon) • Consumer trends and influences Aging population – familiarity and health Younger consumers - health and convenience Food safety important to all Sustainability less so July 27, 2016 6
Seafood Consumption • Per capita consumption (~60kg); but as % of diet (4.5%) • Stated preference for fresh fish Traditional markets favored point of purchase • Difficult to introduce new species Pollock/sole/cod/roe are local, known, and valued Used in soup, processed products, as condiments • Developing market for premium species but will take time July 27, 2016 7
Distribution • Importers/wholesalers – relied upon heavily by all end-use sectors • Retail – a few key chains; origin labeling in place; Alaska $$$ • Hotel/Rest. – interest in premium products but price a factor • Institutions – large end-user of pollock/YFS (Korean and Russian) • Food processing – large surimi market; Alaska canned salmon July 27, 2016 8
Market Position • Korea is important storage market – not all “exports” remain • Estimated: 41.4% of Alaska exports to Korea enter as an import • Estimated imports from Alaska ~ 54,000 MT (2014 - adjusted) South Korea estimated to be 6 th largest Alaska seafood market • • Recent growth (2012 – 2015) for Alaska seafood products including: Frozen salmon and fillets Frozen Alaska pollock Frozen cod fillets Frozen flatfish, other Alaska pollock surimi July 27, 2016 9
Adjusted Alaska Seafood Imports (Select Species) % Change 2012-2015 Product 2012 2013 2014 2015 Premium Pacific Salmon Fillets, Frozen 18 80 902 202 1022.2% Other Pacific Salmon, Frozen 194 754 1,923 2,053 958.7% Cod, Fillet, Frozen 49 36 55 114 132.7% Cod, Frozen 3,677 3,923 3,501 3,958 7.7% Alaska Pollock, Fish Surimi 9,559 16,042 17,874 19,618 105.2% Good Value Alaska Pollock, Frozen 1,411 1,165 3,283 5,309 276.3% Plaice, Fillets, Frozen 631 677 611 903 43.1% Flatfish, Other, Frozen 11,831 11,600 12,769 14,528 22.8% Under-utilized Alaska Pollock, Roe 2,402 3,407 3,045 2,944 22.5% Other Fish Roe, Frozen 2,327 1,964 2,201 2,775 19.2% July 27, 2016 10
Opportunities • Importers looking to diversify supply • Alaska “brand” synonymous with quality, freshness • Alaska gaining name recognition from canned salmon • KORUS – gains still possible for cod fillets, pollock, plaice, others • Demand for premium products July 27, 2016 11
Constraints • Low awareness of Alaska product diversity and differentiation • Fresh vs. frozen • Competition/Price – Russia, Japan, Chile, China, Norway Market Share – Good Value Species July 27, 2016 12
Competition - continued Market Share – Premium Species July 27, 2016 13
Estimated Opportunity/Constraint Rating Opportunity Constraint Rating Rating Product Explanation Growing demand was reported, but price and sourcing from other origins King Crab presents a constraint. Very small market, but is utilized by high-end restaurants and was Black Cod identified as a potential replacement for other species. Could replace Norwegian salmon due to preference for wild. Salmon was Sockeye Salmon cited as an opportunity, but price, small market, and lack of consumer awareness challenge expanded use. Trade reported strong opportunity. Alaska salmon has potential to replace Pink and farmed salmon, but Norwegian salmons' market share and lack of Chum Salmon consumer awareness may hinder growth. Pollock continues to experience high demand in Korea. Decreasing tariff Alaska Pollock rates, lower supply from Japan, and potential health concerns from Russia present new opportunities. Price was cited as the main purchasing factor. Growing demand for convenience has decreased the use of surimi at home Alaska Pollock preparation, but new croquette product has increased the demand for Surimi pollock surimi in recent years. Expanded use could be encouraged through new product development. Cod heads Very high demand which is limited by supply. and collars July 27, 2016 14
Conclusions • ASMI export program in Korea is feasible and welcomed • Options for general trade, retail, and restaurant engagement • Long-term outlook is needed to establish Alaska brand • Relationships already exist with key industry partners Importers/distributors Food manufacturers • FAS support likely July 27, 2016 15
Program Recommendations • Limited initial approach – trade focused • Objectives should be to: Educate partners about Alaska seafood availability and diverse product mix Inform about industry harvesting/freezing techniques and quality control Differentiate from competing products where possible (origin, fresh vs farmed, food safety, etc.) Foster relationships between suppliers and importers Understand market dynamics (institutional purchases, Russian quotas, retail and food processing demand/trends) July 27, 2016 16
Suggested Tactics • Trade representative/local office • Reverse trade mission/trade mission • In-market reception Industry participation crucial Formal introductions Partner appreciation • Educational/trade materials Translated/customized Hard copies July 27, 2016 17
Discussion Bryant Christie Inc. 500 Union Street, 701 Seattle, WA 98101 Tel: (206) 292-6340 eric.rosenberg@bryantchristie.com July 27, 2016 18
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