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 2020, Alaska Seafood maintained the #1 ranking for the fifth 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 Datassential in August of 2019, 64 percent of consumers reported being more likely to order a fish/seafood dish if the Alaska Seafood logo is on the menu and 62 percent 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 2019, the value and volume of exports to ASMI program countries declined 6.4 percent and 3.8 percent, respectively, from 2018 levels.
Many factors contributed to the decline in export activity including trade disputes, currency rates, competition with seafood from other countries, and falling demand.
- While data is limited, a stronger domestic market appears to be reducing exports in some cases.
- Reduced export value to China (-10.5 percent) and Japan (-20.4 percent) was partially offset by expansion in the Europe (+7.8 percent) program areas. The small but rapidly growing Southeast Asia (+18.0 percent) and South America (+87.3 percent) markets also helped moderate the net decline, due in part to new marketing investment by ASMI in 2019 to diversify export markets for Alaska seafood.
- The export value of Alaska seafood can be volatile, with 5+ percent changes year-to-year common. Over the last decade (2010-2019), the compound annual growth rate in export value is 2.3 percent, exceeding the 0.5 percent annual goal.
- Although the value of Alaska seafood exports to ASMI program areas declined in 2019, export values to non-ASMI program areas hit a record, up 3.7 percent from 2018. Most 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, it is estimated that a significant volume of Alaska pollock roe, pollock surimi, salmon, and whitefish is re-exported, with the majority of that volume going to ASMI program area countries. These estimated re-exported volumes and values are not factored into the totals shown above.
Summary of market challenges and opportunities:
The total export value of Alaska seafood is likely to decline in 2020. This decline is expected due to reduced salmon harvest volumes, weaker prices for various species (including sablefish, rockfish, Pacific cod, and flatfish), and other factors. There is some evidence that a stronger U.S. domestic market for various Alaska seafood products is contributing to export value declines, though limited data is available to study this in detail.
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 South Korea. Anything disrupting these trade flows presents a challenge to the industry with a reduction of value a possibility.
Since 2018, China has enacted tariffs as high as 42 percent on seafood products imported from the United States, including most seafood originating in Alaska. China has excluded from tariffs product intended to be reprocessed in the country and then re-exported, meaning the majority of Alaska seafood is not subject to the added expense. However, Alaska's considerable exports destined for the Chinese domestic market continue to suffer from these tariffs at a time when China's seafood consumption is on the rise. From 2017 to 2019, China's seafood imports nearly doubled in value (+91 percent), while Alaska's exports to the country declined 29 percent in value.
While product intended for reprocessing and re-export is not subject to tariffs in China, recent actions by China customs officials based on claims counter to known science related to the transmission of the virus that causes COVID-19, have effectively created a non-tariff barrier for trade by imposing strict testing stipulations on imported food and food packaging. These stipulations have result in delays in processing imported seafood from Alaska and caused uncertainty in trade relationships.
Trade issues with the EU (related to aircraft manufacturer subsidies) also have the potential to threaten established markets for Alaska seafood.
Because of the importance of export markets, currency rates impact the value of Alaska seafood. A weaker U.S. dollar increases the purchasing power of foreign buyers and thereby increases the competitiveness of U.S. exports. For this reason, a weaker U.S. dollar is generally preferred.
The U.S. dollar has weakened about 3 percent versus the Chinese yuan since February 2020. The dollar has also been weakening against the European Union's euro and Japan's yen, down about 6 percent and 2 percent, respectively, since February 2020.The weakening of the U.S. dollar coincides with and appears to be related to impacts of the COVID-19 pandemic.
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 both reprocessing and end 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 2019 ex-vessel value data of Alaska seafood totaled approximately $2,029 million, a 2.0 percent increase from 2018.
- Net growth in 2019 was due to expanding value (ranked by total contribution) for Alaska pollock (+7.7 percent), crab (+12.3 percent), salmon (+3.4 percent), and halibut (+12.2 percent). This growth was moderated by falling values for Atka Mackerel (-33.9 percent), sablefish (-22.5 percent), Pacific cod (-4.5 percent), and flatfish (-2.4 percent). The herring and rockfish category also experienced a net decline.
- A compound annual growth rate of 2.5 percent was observed between the averaged 2009/2010 and 2018/2019 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:
There is limited potential for total ex-vessel value of Alaska seafood to increase in 2020 from 2019 levels due to the COVID-19 pandemic and other pressures. The pandemic has reduced profitability due to increased operating costs at the same time as markets for the state's seafood are increasingly uncertain.
The industry was already struggling with several challenges entering the pandemic. Tariff disputes added complexity and costs to export activity, with flatfish particularly challenged. Halibut and sablefish markets were weak and falling harvest volumes of Pacific cod amplified the impact of weak markets for the species.
While short-term and medium-term factors appear to be predominantly negative, opportunities exist. The marketing value of Alaska's name remains strong and has perhaps grown in visibility and relevance throughout the pandemic. Conversations with seafood retailers and marketing professionals support the view that consumers are increasingly interested in the health properties, sustainability, and provenance of their food. Alaska seafood remains especially well-positioned to benefit from these consumer trends.
Frozen seafood has experienced strong growth throughout the pandemic, offering the potential of a broader market for Alaska seafood. In addition to existing seafood consumers buying seafood more frequently, some reports indicate increased purchases by individuals who have never or very infrequently purchased seafood previously. ASMI is working to maintain a positive experience for this new seafood buyer to retaining and convert them to a reliable purchaser of seafood and Alaska seafood.
On the supply side, a weaker than expected salmon harvest in Russia in summer 2020 increases the market strength of Alaska salmon, helping preserve or increase its value.
Target #3: Continue to generate target consumer awareness via consumer public relations and advertising campaigns.
Analysis of results and challenges: The number of consumers reached through ASMI consumer public relations (PR) efforts increased nearly 48% in FY2020 from the previous year. The FY2020 number shown in the above chart reflects consumers reached through consumer PR efforts in the U.S. as well as ASMI's major international program areas, including China, South America and Europe. This is the second year ASMI has included international consumer PR impressions in this Performance Measure, as it provides a more accurate representation of the consumers reached through ASMI's global consumer PR 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 foodservice. In FY2020, ASMI made additional investments in digital consumer PR and marketing activities to connect with target audiences amid the pandemic. In the US, domestic public relations efforts resulted in over 166 placements (+6%) with nearly 1.89 billion impressions (+99%) in FY2020, and extensive social media posts reached 17.4 million impressions (+178%) for a total nearly 1.91 billion impressions. International public relations efforts from the above named markets resulted in nearly 2.12 billion impressions (+12%) for the Alaska seafood brand in FY2020, for a combined total increase of
Results from the ASMI Japan program in FY2020 totaled over 3 trillion impressions following new investment in a consumer marketing and PR program in the region, however, these numbers are not reflected in the 2020 total shown in the above chart due to the statistical anomaly. This strategic direction in Japan was made possible by the one-time short-term federal Agricultural Trade Promotion grant awarded to ASMI.
Challenges and Opportunities:
Traditional in-person consumer PR and marketing activities were upended in 2020 due to the risks of COVID-19. ASMI quickly pivoted in all program areas to connect with consumers virtually through expanded, targeted social media, earned and paid media relations activities. These changing digital habits allow for new ways to educate target consumers on the quality, sustainability and health benefits of Alaska seafood, increasing the value of the Alaska seafood brand.
Current as of December 2, 2020