« November 2009 Table of Contents 
Top Species: Tilapia
Supplies recover, but prices fall in post-freeze market
By Joanne Friedrick
November 01, 2009
What a difference a year has made in the tilapia industry.
In 2008, importers were grappling with the impact of extreme
weather conditions that severely depleted supplies of Chinese
frozen fillets and sent prices skyward. In areas where the
freeze took hold, supplies fell by up to 25 percent.
This year, with an ample source of tilapia, but a weaker
economy, prices have dropped to lows rivaling those of
2006.
Yet participants in the tilapia business say there remains
room for growth for a species with few flaws and lots of
pluses.
"Last year we got hit with the Chinese winter," explains
Denise Gurshin, senior buyer-aquacul-ture products for High
Liner Foods of Danvers, Mass. "Coming back this year," she
says, "volumes are good, and prices are low."
The Chinese farmers aren't happy with the current pricing,
acknowledges Gurshin, but she says a correction in their favor
is likely in the coming months.
Last year, during the height of the tilapia crisis,
wholesale prices for 3- to 5-ounce frozen fillets reached $3 a
pound. In September, says Gurshin, 3-5s were selling for $1.65
to $1.75, 5-7s for $2 to $2.10 and 7-9s at $2.45
to $2.55.
David Loos, VP of Western Edge Seafood in Washington, Pa.,
quotes similar wholesale numbers, noting prices are likely to
rise by 15 to 25 cents per pound through early 2010, as
inventory and production tightens heading into the fall and
winter.
Inventory has been up not only because overseas weather
conditions cooperated this year, but also because of a weaker
economy and credit issues with Russia and Mexico that prevented
those countries from buying as much as in the past, says
Loos.
Another factor impacting the tilapia market, notes Rick
Spalding, director of foodservice
marketing for High Liner's
Fishery Products International brand, is some softening of
interest in the species related to both the freeze - when
customers turned to and stayed with cod - and its more
mainstream role in
the marketplace.
"Tilapia is very established in the market now," says
Spalding. "So its message isn't as exciting."
Some farmers may get out of the tilapia market temporarily
because they aren't happy with the current price schedule. What
some tilapia farmers do when prices fall is switch to growing
rice. Tilapia has a six- to eight-month grow-out cycle, so
farmers may switch to rice for one cycle and then return
to
tilapia when the pricing is more favorable.
Supplies may be down, but China still remains the biggest
player in the frozen tilapia market. In 2008, China accounted
for 77 percent of all tilapia imports at 304.7 million pounds,
according to the National Marine Fisheries Service. Through
July 2009, China produced 78 percent of imports: 172 million
pounds out of a total 220. Central and South America,
meanwhile, are the primary sources for fresh tilapia, with
Honduras, Ecuador, Costa Rica and Colombia among the
leaders.
An evolving, growing market
Tom Sherman, VP-consumer sales and marketing for Icelandic
USA in Newport News, Va., has watched tilapia evolve in the
marketplace, beginning as a live fish sold through ethnic
markets and gradually expanding to frozen fillets and
value-added products.
Icelandic operates its own tilapia farms in China. Although
the company began by working with local farms, "we were
dissatisfied with the quality and started our own farm," he
says. Icelandic owns the lakes, processing plants and feed
supplies, which Sherman says is important "on the traceability
side, when you want to say where it comes from and what [the
fish] are eating."
"There's a good reason [tilapia] is in the top 10 species,"
says Sherman. He cites its consistent supply, reasonable price,
mild flavor and ease of preparation as attributes. As prices on
other firm-fleshed white fish have crept up, tilapia has filled
in the gap, he says.
And as far as Sherman is concerned, tilapia "doesn't have
any negatives to it." Even the name is nice, he says: "It
sounds upscale, and not too foreign. I'm sure it will continue
its popularity."
High Liner's Spalding has also witnessed a growth in
tilapia, both in the marketplace and at the company.
"Our strongest products are tilapia based," says Spalding.
Tilapia products are still registering double-digit growth, he
says, although that is slowing somewhat.
The selling point for the fish is its ability to become
whatever the chef wants. "It works well with breading or
battering," says Spalding, "and works in most of the channels
we sell into."
An emerging market for the fish is the healthcare
foodservice channel, he adds. The supplier
recently showed a
garlic and
herb pan-seared tilapia to attendees at a major
healthcare foodservice show.
Loos from Western Edge is
another believer that tilapia is
still in its growth phase. "We're getting calls and customers
want quotes for Lent," he explains. "It's a good sign to me, so
I don't
want to get too conservative in buying. I keep waiting
for the market to level off."
The next phase
Both Loos and Spalding see opportunities going forward for
tilapia in restaurant chains and quick-serve outlets.
"The opinion was that because tilapia was affordable, it
must
not be good," says Loos. But with the edgy economy, and a
turn toward affordability, tilapia's profile has risen.
Captain D's, a quick-serve chain with 580 units in 24
states, has been menuing tilapia for about four years,
according to Paula Vissing, senior VP-purchasing and R&D
for the Nashville, Tenn.-based restaurateur.
Tilapia appears on the Captain D's Classics and Seafood
Selections menus, the former as a seasoned fillet offered with
a variety of sauces and the latter with a skewer of shrimp on
the scampi platter. It is also part of a promotional $5 Meal
Deal menu, served with teriyaki sauce, rice and a breadstick.
During the winter holidays, restaurants will offer crab-stuffed
tilapia, she adds.
"It's a very versatile fish that takes a lot of different
flavors," says Vissing, who buys 5-ounce frozen fillets farmed
in China. While certain fish species aren't that recognizable
to diners, she says, tilapia is readily identified "as a nice,
mild whitefish. We're better off menuing it that way (by name)
because it has sufficient recognition."
Even with the higher price of supplies last year because of
China's freeze, Captain D's kept its tilapia menu prices the
same. "At the QSR level, it's hard to change prices or pull an
item off the menu," she explains. Instead, Captain D's looks at
total food costs to absorb such fluctuations with a particular
species.
Although fish and chips made with pollock remains the
chain's top seller, among grilled foods, she says, tilapia is a
"top item."
"For us, we're really happy with tilapia," she says. "The
bulk of the population prefers it, and we can take a great
product and build on it."
Contributing Editor Joanne Friedrick lives in South
Portland, Maine