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Top Species: Pollock/surimi

A second season of quota cuts hit pollock, surimi-seafood industry

Pollock prices are up, but processors are getting some
    relief from lower fuel costs.
By Joanne Friedrick
January 01, 2009

Pollock, that ubiquitous whitefish used in fast-food fish sandwiches and as the base for surimi-seafood products, is going to be a bit more scarce as Alaska quota levels drop for the second straight year.

Based on recommendations from National Oceanic and Atmospheric Administration scientists, the North Pacific Fishery Management Council last month set the 2009 total allowable catch at 815,000 metric tons, a 18.5 percent decrease from 2008. The total allowable catch was set at 1 million metric tons last year, which was down 28 percent from 2007 [see Newsline, p.8].

Pat Shanahan, program director for the Genuine Alaska Pollock Producers, a nonprofit trade group of 14 companies that promotes domestic Alaska pollock, says the reduction in the quota was not unexpected. "We as an industry subscribe to these scientific findings," she says. "This was all expected and planned for in advance."

The good news, says Shanahan, is that the same studies that were used to set the lower catch numbers are also showing a surge in stock levels for 2010. "The science indicates an upswing in fish in the ocean due to a strong year class of pollock that will mature in 2009," she adds.

According to NOAA, a 2008 survey combining information from acoustic measurements of pollock biomass and mid-water trawl results showed lower abundance. Based on these results, NOAA recommended to the NPFMC that the catch limit be lowered. But Jim Ianelli, a stock assessment scientist at NOAA, said in a prepared statement "the prognosis for 2010 is for improved stock levels because 2006 was a more successful year for the hatching and survival of young pollock."

Alaska pollock ( Theragra chalcogramma ) is harvested by trawlers in the Bering Sea in January and September and in the Gulf of Alaska in January, June and September. Since 2005, the Marine Stewardship Council has certified Alaska pollock as sustainable and well managed.

Pollock prices increased from an average of $1.25 to $1.35 per pound for fillet blocks in December 2007, to about $1.65 per pound at the start of 2008. Rick Muir, president of GAPP and VP at American Seafoods Group in Seattle says the fillet block price remained steady at $1.90 to $1.95 per pound at press time in mid-December.

"That price will probably continue," says Muir, "but there are so many changes to consider." He notes that pollock hasn't yet experienced the price reductions from the recession experienced by some of the high-end species.

"Pollock is a recession-resistant species," says Merle Knapp, VP of sales and marketing at Glacier Fish Co. in Seattle.

While halibut, cod, sole and flounder have dominated the top and middle tiers in the market, pollock has weathered the economic storm by serving lower-tier buyers, who use the mild whitefish as the base for quick serve restaurant (QSR) fish sandwiches and fish 'n chips, or as the main ingredient in surimi seafood. Knapp predicts pollock prices will stay where they are or increase slightly. Supply and demand is the biggest factor in the price equation, says Knapp, despite the volatility of the economy.

"Fuel has been a killer, but we are seeing [oil] barrel prices coming down," says Knapp. He notes that producers have had to absorb a lot of these extra costs, "so we are just relieved to see some of the downturn in oil prices."

Knapp says in distinguishing itself from similar species, pollock benefits from its Marine Stewardship Council certification, especially among European customers.

"It's important to them to know they have third-party certification," says Knapp.

In addition, says Knapp, the state of Alaska has required that pollock be fished sustainably for some time, although it has just recently begun marketing that fact.

While pollock has competed with cod for a prime position as the fish of choice in breaded entrées and sandwiches, Shanahan says GAPP has been working hard to create a real identity for pollock. One of the opportunities, she says, has been within school lunch programs, where pollock is being introduced to students as a source of high-quality protein that is exciting and interesting.

In the works for three years now, Shanahan says the GAPP School Nutrition Program has introduced pollock to students via Alaska Fish Tacos and other menu items. Student feedback showed 92 percent of elementary students wanted Alaska Fish Tacos served in their cafeteria. At the secondary level, 76 percent said "yes" and an additional 16 percent said "maybe," when asked if they would like to have Alaska Fish Tacos on their school lunch menu. 

Both Muir and Knapp say this year's catch has been primarily split evenly between sales of fillets, which are used to create items such as the fish tacos, and surimi, although Knapp says that can fluctuate based on the fishing season or because of currency changes.

"Different product forms will shift to meet the demand," Knapp says, noting "right now, Japan is the king of currency, so they are dictating the business."

Japan and Europe are big markets for surimi seafood, says Shanahan, and those areas have been innovators in its use and in the creation of new forms. That contrasts with the United States, where surimi is best known as a crab-flavored seafood used in salads, she says.

The Japanese per-capita surimi-seafood consumption rate is about 15 pounds per year, according to industry statistics, with the most common form being kamaboko, a traditional steamed and pressed fish sausage. But the Japanese market sells hundreds of products made from surimi.

At Shining Ocean, a Sumner, Wash.-based surimi-seafood producer, President Robert Bleu says even though it has been a good year for the company, "it's still a tough environment." Nielsen surimi data show supermarket sales dollars are up slightly, about 1 percent to 2 percent, but actually poundage is down percentage-wise "in the high teens," he says.

Bleu says both restaurants and supermarket retailers are experiencing a tightening of the market because of the economy.

"You worry about your customers and if they go out [of business], will you take a big hit?" he says. On the plus side, he says, natural gas and other energy costs have fallen as the year has gone on, as have the costs of some of the ingredients in surimi, such as starches. "It's much better than earlier in the year, when we saw big increases [of 100 percent or more] in the cost of supplies."

Shining Ocean has positioned 
itself as a health leader with surimi, he says, touting products that are enhanced with omega-3 fatty acids. One of the company's newest retail products is an 8-ounce Crab Smart Natural, which is colored using antioxidant-rich lycopene, found in tomatoes, and enhanced with 250 mg of omega-3s.

"Shining Ocean has been strong because we have a few pillars of value-added," he says. In addition, he says, R&D dollars are being focused on both new products and ways to produce existing items more efficiently and cost-effectively, so those savings can be passed along to customers. In some cases that means substituting other species for pollock or whiting if the price is more attractive, says Bleu.

Glacier Fish has looked to whiting as a fill-in if there is a pollock shortfall, says Knapp. Whiting is caught by the same fleets that fish for pollock, and is undergoing the process of getting MSC certified by early 2009, he says.

"There's never enough to go around," says Knapp about the pollock supply. "Every year we run out."

In the foodservice arena, some restaurants are having a hard time sourcing pollock and that has impacted menus.

Joey's Only Seafood Restaurants, the 80-unit Canadian QSR headquartered in Calgary, Alberta, garners about 30 percent to 35 percent of its sales from pollock fish 'n chips, and another 15 percent to 20 percent from fish 'n chips made with other species.

But Andy Taylor, senior VP at Joey's, says as the price of pollock nears that of higher-priced species such as cod, haddock and halibut, some customers are upgrading. For a couple of dollars difference, he says, diners will opt for cod fish 'n chips instead of the pollock version.

"Pollock has been harder to come by at a good price," he says, "which forces us to increase our menu price."

Taylor says the higher pollock price may affect its popularity with diners, but that type of change seems to be cyclical.

He is encouraged that the pollcock supply is likely to increase again once the quota is revisited for the 2010 fishing season.

 

Contributing Editor Joanne Friedrick lives in South Portland, Maine

 

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