Increase the economic value of Alaska seafood resources.
- U.S. and International Retail and Foodservice Alaska Seafood Promotion, Public Relations and Communications and Seafood Quality Technical Support
|Mission Results||Core Services|
|A: Result - Increased economic value of Alaska seafood resources.|
Target #2: Maintain first place ranking of Alaska Seafood among the most popular food brands on U.S. restaurant menus.
Analysis of results and challenges: In 2019, Alaska Seafood maintained the #1 ranking for the fourth consecutive year. In 2016 Alaska Seafood, for the first time, obtained the #1 most commonly named protein brand called out on restaurant menus, surpassing Angus Beef. In another study of United States consumers conducted by Datassentials in August of 2019, 64% of consumers reported being more likely to order a fish/seafood dish if the Alaska Seafood logo is on the menu and 62% of consumers reported being more likely to order a fish/seafood dish when the word “Alaska” is on the menu.
|A1: Core Service - U.S. and International Retail and Foodservice Alaska Seafood Promotion, Public Relations and Communications and Seafood Quality Technical Support|
Target #1: Increase the aggregate value of Alaska seafood exports to Alaska Seafood Marketing Institute (ASMI) program destination countries by 0.5 percent annually.
Analysis of results and challenges: Export markets are critical to Alaska’s seafood industry, accounting for 60 to 70 percent of first wholesale value each year. Growth in export volume and value helps maintain markets for Alaska seafood and supports higher values for the State’s annual production.
• In 2018, the value and volume of exports to ASMI program countries declined 6.1 and 10.4 percent, respectively, from 2017 levels.
• Reduced harvest volume of salmon, Pacific cod, and snow crab are the primary reason for the decline in export value and volume. Other factors impacting exports include competition with seafood from other countries, currency fluctuations, and trade disputes.
• While the value of Alaska seafood exports to China declined approximately 21 percent, this weakness was moderated by growth in exports to Japan and Europe, up 1.8 and 5.4 percent, respectively.
• The export value of Alaska seafood can be volatile, with 20+ percent changes year-to-year common. Over the last decade, the compound annual growth rate in export value is 3.7 percent — well above the 0.5 percent annual goal.
• Although the value of Alaska seafood exports to ASMI program areas declined in 2018, export values to non-ASMI program areas expanded 2.5 percent. The majority of this growth centered in South Korea, a major reprocessing center for Alaska seafood products. While it is difficult to quantify how much Alaska product is consumed within South Korea versus product that is processed and re-exported, the estimate is that a significant volume of Alaska pollock roe, pollock surimi, salmon and whitefish is reprocessed and sent to other markets.
Summary of market challenges and opportunities:
Compared to 2018, the total export value of Alaska seafood has the potential to be higher in 2019, due primarily to stronger pollock values and increased pink salmon harvest volume. However, growth could be slowed by continued reductions of Pacific cod volume and value, as well as weakness in sablefish, flatfish, and rockfish markets.
In a typical year, about 80 percent of Alaska’s seafood production (by volume) is exported. China is the largest export market followed by Japan, Europe, and Canada. Anything disrupting these trade flows presents a challenge to the industry — with a reduction of value a possibility.
China has enacted tariffs as high as 35 percent on seafood products imported from the United States, including seafood originating in Alaska. However, China has excluded from tariffs product intended to be reprocessed in the country, meaning the majority of Alaska seafood is not subject to the added expense. The situation remains fragile, with escalation and harm to the Alaska seafood industry a possibility.
Concurrently, the United States has placed tariffs up to 25 percent on products imported from China, including seafood harvested in Alaska and exported to China for reprocessing. Significant uncertainty surrounds specific tariff rates and clarity on products that are subject to tariffs. The Alaska seafood industry continues to be challenged with responding to and understanding the changing trade environment.
Other trade disputes with Canada and the EU threaten established markets for Alaska salmon.
Because of the importance of export markets, currency rates impact the value of Alaska seafood. A strong US dollar places Alaska salmon at a competitive disadvantage because foreign buyers must spend more to purchase the same amount of product. For this reason, a weaker US dollar is generally preferred.
The US dollar has strengthened about 13 percent versus the Chinese yuan since April 2018 with the current exchange rate the strongest in a decade. The dollar has also been strengthening against the European Union’s euro, up about 12 percent since April 2018. In contrast, the dollar has weakened against the Japanese yen over the last 12 months.
ASMI will continue to focus effort on traditional export markets such as Japan, Northern, Western, and Central Europe, and on more recently established markets in Southern Europe and China. ASMI will also continue support of emerging markets, including Southeast Asia, Eastern Europe and South America, which present opportunities to increase the overall value of the Alaska seafood resource by expanding and diversifying markets. The message of sustainable and healthy seafood from Alaska continues to resonate in both traditional and newer markets.
Target #2: Increase the ex-vessel value of key species in Alaska's commercial harvest by 0.5 percent annually.
Analysis of results and challenges: The harvest (ex-vessel) value of Alaska's commercial seafood includes payments from processors to commercial fishermen and estimated value of product caught by catcher-processors. Increasing the harvest value of Alaska seafood benefits Alaska residents, in the form of economic activity and opportunity, along with state and local tax revenue.
• Preliminary 2018 ex-vessel value data of Alaska seafood totaled approximately $1,988 million, a 3.5% decline from 2017.
• In 2018, the Alaska pollock ex-vessel value increased 15.9 percent, along with rockfish (+14.2 percent), and flatfish (+9.1 percent) from the prior year. But this growth was not strong enough to balance ex-vessel value reductions in sablefish (-24.9 percent), halibut (-23.0 percent), salmon (-12.8 percent), and Pacific cod (-2.5 percent).
• A compound annual growth rate of 2.0 percent was observed between the averaged 2008/2009 and 2017/2018 seasons, exceeding the goal of 0.5 percent. It is appropriate to average even and odd-numbered years to smooth fluctuations in salmon harvest values.
Summary of market challenges and opportunities:
Trade disputes and increased uncertainty could place downward pressure on ex-vessel values for Alaska seafood. Export markets are vital to the seafood industry, and disruptions could manifest in lower ex-vessel prices.
Although the ex-vessel value of the annual commercial seafood harvest in Alaska has been slow to grow in recent years there are reasons to be optimistic. The 2019 salmon season is expected to be among the most valuable on record, measured at the ex-vessel level. Strong pollock prices will result in the highest ex-vessel value for the species in several years. And for species with relatively weak prices, the industry is actively innovating and pursuing new markets. For example, industry reports modest growth of the domestic market for sablefish, a species traditionally exported.
Target #3: Continue to generate target consumer awareness via consumer public relations and advertising campaigns.
Analysis of results and challenges: The FY2019 number shown in the above chart reflects consumers reached through consumer PR efforts in ASMI’s major international program areas, including China, Japan, Western Europe, Central Europe and Northern Europe (UK), in addition to domestic consumer PR impressions. This is the first year ASMI has included international consumer PR impressions in this Performance Measure, however, it provides a more accurate representation of the consumers reached through ASMI program activities.
ASMI will continue to focus on increasing consumer awareness by using various methods of media communication including broadcast, print, social or online media public relations and through consumer promotions and campaigns in both retail and food service. In FY2019, domestic public relations efforts resulted in over 156 placements and extensive social media posts totaling nearly 875 million impressions. In response to decreased funding, domestic consumer advertising was eliminated in FY2018; a reduction from $2.2 million in FY2016. In the second year without an advertising spend, domestic consumer impressions decreased slightly from FY2019. However, the cost per consumer impression via public relations efforts continues to exceed the return Alaska seafood receives from advertising. From FY2016 to FY2017, consumer impressions earned per dollar from public relations were on average 6.5 times greater than consumer advertising.
Current as of December 9, 2019