SUPPLY

Stricter safety regulations

In June 2007, significant concerns were raised in regards to the safety of seafood products imported to the U.S. from China. These concerns resulted in stricter reviews of imported seafood products such as catfish, shrimp, dace, and eel. These restrictions have resulted in 17% decrease in volume in 2008 compared to one year prior. An analysis for the first quarter of 2008 showed a sharp reduction, as detailed in the following chart.

Pending legislation attempting to increase domestic production

Currently, the U.S. imports 84% of its seafood in order to meet current consumer demand — and that demand is rising, resulting in an increasing foreign trade gap. The National Offshore Aquaculture Act of 2007, pending before Congress, would enable the U.S. to obtain the necessary permits for the development of a sustainable aquaculture. Businesses and individuals are dependent on these permits for fishing in federal waters. Without them, they are not able to increase the supply of healthy seafood for domestic consumption. While vibrant and diverse, the current U.S. production of seafood currently meets only 5% to 7% of total demand.

DEMAND

Aging population preferences

According to the U.S. Census Bureau the number of Americans 65 years of age or older increases an average of 6% every 5 years. Within the next decade, over 70 million Americans will pass the age of 60. Consumer research conducted by NPD Group Crest has shown that adults in the 50-64 age range eat approximately 35% more seafood than the national average. Americans 65 years of age and older eat 53% more seafood — this is expected to drive demand up overall by 6.58% within the next 12 years.

Hispanic demand increasing

At 38 million people, the Hispanic community is considered the largest ethnic group in the U.S. According to the U.S. Census Bureau, year-over-year this ethnic group has grown an average of 3% to 4%. This is significant when compared to other ethnicities, which are averaging a growth of 1% or less each year. Based upon the consumer research conducted by Opinion Dynamics Corp., Hispanics consume 24% more seafood than any other ethnic group, representing a higher rate of consumption than the U.S. population as a whole. The growth of the Hispanic community combined with higher than average consumption for seafood will continue to drive demand upward for this industry.