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« February 2009 Table of Contents

Top Species: Farmed shrimp

Price-conscious buyers can find plenty of deals in the shrimp market

Bargain hunting is a necessity in today's shaky economy, and that also applies to the seafood counter and restaurant menus. While studies show Americans are tightening their belts when it comes to both dining out and entertaining at home, farmed shrimp offers one of the better protein values.

"Prices are at a bargain right now," says John Filose, VP of sales and marketing at Ocean Garden Products. The San Diego company operates shrimp farms and wild and farmed shrimp processing plants in Mexico. "If you look at Red Lobster, they are pushing shrimp. They know where the bargains are."

Filose says retailers are also featuring shrimp, having begun the push during the winter holidays and continuing through Super Bowl Sunday on Feb. 1 and into Valentine's Day and through Lent.

"It's a heck of an opportunity for retailers to be creative with shrimp," says Filose.

Most farmed shrimp prices have held steady or fallen slightly in the past year, according to the National Marine Fisheries Service. Prices for 36/40 farmed whites from Ecuador fell from $3.20 per pound in January 2008 to $3.10 per pound last month. Similarly, prices for 21/25 Central and South American farmed whites fell from $4.75 to $4.40, and 21/25s from Thailand fell from $4.45 to $3.75 during the same period. Farmed whites from Mexico were one of the few imports that saw a price increase last year, with 16/20s going from $6.70 per pound to $6.95.

Pacific white shrimp ( Penaeus vannamei ) is the top import among farmed shrimp, with a nearly 2:1 market share lead over black tigers ( P. monodon ). The majority of shrimp imports hail from Asia; other important sources include South America and Mexico. From January through November 2008, Thailand accounted for more than 32 percent of U.S. shrimp imports, followed by Indonesia at 15.2 percent, Ecuador at 9.8 percent, China at 8.6 percent, Vietnam at 8.4 percent and Mexico at 6 percent, according to NMFS.

Different countries specialize in different forms, with Thailand providing mostly peeled frozen shrimp, while Ecuador exports nearly 80 percent of its shrimp as frozen shell-on and China's largest volume product export to the U.S. market is frozen breaded shrimp. China, Vietnam, Thailand, India, Brazil and Ecuador are all subject to tariffs imposed by the U.S. Department of Commerce and International Trade Commission in 2004. Tariffs for China range from 0.07 percent to 112.81 percent - by far the highest for any of the affected countries.

Wholesaler and retailer Doug Douty, owner of Lusty Lobster in Highlands, N.J., procures farmed shrimp from Ecuador, Mexico and Vietnam for his wholesale customers. The Ecuadoran product provides consistency in size in the 31/35 and 41/50-count range, he says, while Vietnamese black tigers are used to fill orders for larger sizes.

Douty retails only wild shrimp because both he and his customers prefer its flavor.

But wholesale buyers are more price-driven these days, he says, and are requesting farmed shrimp that can sell for $1 to $2 less per-pound than the wild.

This year's Mexican farmed shrimp season, which ends this month, yielded larger shrimp in the 16/20 and 21/25 range, says Ocean Garden's Filose. Those larger sizes are a boon to both retailers and restaurants that can tout them as jumbo and extra jumbo shrimp, respectively.

Mexico's aquaculture industry, which was established in the 1950s, has the advantage of a longer growing season and thus larger sizes, says Filose.

Important to both distributors and consumers, he says, are the twin principles of traceability and sustainability. "Aquaculture is heavily regulated in Mexico," explains Filose. While fisheries are important to the Mexican economy, so too is preserving the coastline.

The shrimp farms in Mexico are built close to the coast on former salt flats to cut down on pumping water and eliminating the danger to mangroves, which provide protection to various aquatic species.

Mexico's semi-intensive farming method means stocking ponds at a lower density than traditional shrimp farming practices. The shrimp is also traceable from the end-user back to the processing plant, so if necessary, any issues can be easily identified and dealt with quickly.

Sustainability may be less of an issue for some buyers during an economic downturn, says Filose, but in the longterm it is a selling tool and point of differentiation.

Vanessa Abramowitz, president of the Shrimp Market quick-serve restaurant chain, also notes that while she's concerned about sustainability and traceability for the shrimp she serves, most customers aren't questioning where the shrimp comes from or how it is farmed.

"Unfortunately, consumers just want to eat their shrimp," she says. "We're not educating the public (on sustainability of shrimp farming) because we don't think they are interested yet."

Abramowitz sources the shrimp for Shrimp Market - the ninth of which recently opened in Queens Center Mall in New York - from Cartagena Shrimp Co.'s farms in Colombia and its U.S. subsidiary, Caribco. Her father, Salomon Finvarb, founded the shrimp company in 1983, which exports about 80 percent of its shrimp to Europe and the remaining 20 percent to the United States.

Of that 20 percent, says Abramowitz, a very small percentage is bought for the restaurants in Florida, Massachusetts, New York and New Jersey.

"All the shrimp is farmed by us in Cartagena," she explains, and processed in Colombia. "Once it gets to the restaurants, it's ready to be cooked," she says, or served in other ways, such as shrimp cocktail, salad or wraps.

Abramowitz agrees that farmed shrimp prices have come down in recent years and it has become a more accessible product as the number of countries farming shrimp has increased.

"Some people still think of shrimp as something expensive, but the price I get is a fair price and the price I can offer to customers is a great price," she says. Shrimp Market menus items such as shrimp jambalaya and shrimp carbonara for less than $8, she notes.

While Pacific whites dominate farmed shrimp imports, at east one producer is trying to carve out a niche with Pacific blue shrimp ( Litopenaeus stylirostris ), raised in New Caledonia and sold through U.S. importer Braun Management on Hawaii's island of Maui.

Marla Braun-Miller, general manager, says the Markea prawns, as the blue shrimp are marketed, were once farmed heavily in the 1980s but succumbed to a virus in the 1990s, so many shrimp farmers switched to other species like vannamei. Fortunately, she says, improvements in the development of the broodstock, which comes from Tahiti, makes blue shrimp more virus-resistant.

"This species does require a little more attention" during farming and is more expensive to produce, says Braun-Miller, which is another reason why its popularity fell off. But recognizing an opportunity to develop a niche market, she says the company has begun marketing the shrimp in Hawaii and the U.S. mainland. While most current sales are for foodservice, the company is developing a smaller retail package, says Braun-Miller.

The blue shrimp, raised in 250 acres of ponds at two farms in New Caledonia in the South Pacific, are harvested from March through August, says Braun-Miller. The company only sells quick-frozen whole prawns that are grown without antibiotics or artificial colorants. While they can't be marketed as organic because they are not certified as such, Braun-Miller says the prawns come as close as possible to meeting organic criteria.

Sustainability is also a signature of the brand, she says. The raising of the blue shrimp "has little impact on the environment.

"I think the trend seems to be toward 'green' energy and not depleting the natural resources," says Braun-Miller.

At about $2 per pound more than white shrimp, Braun-Miller says the challenge is getting customers to try the larger, firmer blue shrimp. Buzz's Wharf, a restaurant owned by Braun-Miller's family on Maui, uses Markea prawns exclusively for its shrimp dishes as a means of educating consumers about the difference.

This may not be the best time to introduce consumers to a higher-priced product, but Braun-Miller says quality and taste are always a draw, and can justify the price. Meanwhile, farmed shrimp producers and sellers are hoping consumers continue to view their product as an affordable luxury in a recessionary market.

Contributing Editor Joanne Friedrick lives in South Portland, Maine