October 8, 2010

Asia-Pacific remains largest seafood market

As stated by the new market research report, Asia-Pacific continued to remain the largest and the fastest growing regional market for seafood.

Growth in Asia-Pacific was driven by increasing seafood consumption as a result of economic growth, growing income levels, and improving spending power in regional economies, especially China and India.

By product, fresh/frozen/chilled fish market was the largest segment. The shell fish market remained the fastest growing product segment.

Although currently tempered and moderated by the world economic recession, the global market for seafood is projected to regain poise, in the medium to long-term, to reach US$371.3 billion by 2015.

Factors fingered to drive this growth include growing population, post recession resurgence in consumer affluence, technological improvements in seafood processing, storage, packaging and infrastructure developments for better seafood transportation. Encouraging gains in demand from developing markets such as Asia-Pacific and Latin America also augurs well for the market.

Innovations in seafood processing, rising health concerns, growing consumer awareness over the importance of healthy diet and improvements in food transportation, have all helped increase global seafood consumption over the years. Aquaculture is one of the fastest growing areas of food production in the world today and has been the driving force behind the growth in the seafood industry. Seafood is one of the most complex categories of food with regulatory changes, economics and weather having a direct impact on the delicate balance of supply and demand and price.

The current recession resulted in rising rates of unemployment, falling disposable incomes, reduction in household wealth, and crumbling consumer confidence. All these have triggered changes in consumer food purchasing and consumption patterns/behaviour. Decline in income levels have reduced the spending on groceries, especially meat, poultry, and seafood. Tight liquidity and financial constraints have redefined value and have induced simplicity in lifestyles including food consumption. With one of the inescapable symptoms of the recession being declines in consumer spending and purchasing power, a seismic change in attitude is currently underway with consumers cutting down spending on products including food that are considered as luxury. Types of seafood, which are typically considered as unnecessary luxuries such as, shrimp, oysters, and other exotic species, have taken a hurting fall hereby squeezing revenue in the global seafood market.

The market has witnessed rampant substitution of higher priced products/brands with less expensive yet healthy, high quality products. The market also witnessed consumers substitute seafood with other cheaper protein sources. With price becoming a major factor influencing the consumer food consumption trends, seafood has been largely replaced by less expensive alternatives such as chicken or other low-cost protein rich food.

Seafood varieties such as fresh tuna, sushi and shrimp, which are usually consumed more at restaurants and other food service outlets have especially been the most affected product segments in the seafood market. In addition, rise in seafood prices as a result of accidental marine oil spills, such as the recent Gulf Coast oil spill, exert pressure on the market.