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Top 10 Species: Pollock/surimi

Quota cut puts pollock, surimi prices in the spotlight

By Thyra Porter
January 01, 2008

Hang on to your Filet-O-Fish sandwiches. Quota cuts for Alaska pollock threaten to drive prices up for the finfish and its culinary sidekick, surimi seafood, this year.

At its meeting in Anchorage, Alaska, on Dec. 10, the North Pacific Fishery Management Council set this year's Bering Sea pollock quota at 1 million metric tons, down 28 percent from 2007.

"Will it have a significant economic impact? You bet it will," says David Benton, executive director of the Marine Conservation Alliance in Juneau, Alaska. "But the general sentiment is the industry will live and will support what comes out of the science. At the end of the day, the scientists weighed the evidence and erred on the side on conservation."

The downturn in the pollock population is cyclical and was expected, says Benton, who supports the council's decision.

"If you go back to the mid-'90s, there was a similar cyclical downturn in the pollock population," notes Benton, adding that preliminary evidence indicates recruitment of new pollock in 2006 was the largest in 10 years.

The cut impacts the overall pollock ( Theragra chalcogramma ) market in the United States, because the entire U.S. commercial catch comes from the Bering Sea and the Gulf of Alaska, the areas targeted by the quota.

"That's a reduction of nearly 400,000 metric tons of fish in one year," says Merle Knapp, VP of sales and marketing for Glacier Fish Co. in Seattle. Knapp estimates that the current value of Alaska pollock fillet blocks is $1.25 to $1.35 per pound.

No one in the pollock or surimi-seafood market interviewed prior to the quota announcement wanted to wager a guess where that price would go. The annual pollock catch has most recently sold half for surimi and half for frozen fillet blocks, which are used in value-added products like frozen fish sticks and fast-food fish sandwiches, says Pat Shanahan, program director for the Genuine Alaska Pollock Producers trade group.

Lou Shaheen, VP of sales and marketing for Trans Ocean Products in Bellingham, Wash., which markets surimi-seafood products, wouldn't speculate on prices prior to the quota announcement. Any hit on pollock prices also affects surimi, says Shaheen. Surimi, the fish protein paste that serves as the primary raw material in surimi seafood, is most often made 
of pollock.

"People are going to wait until the Boston Seafood Show to set prices," Shaheen says. "Retailers will want to pay what they paid last year and then you get into 
a battle."

It could be a lively show.

Overall, Shaheen, Knapp and others in the industry describe a market facing a perfect economic storm of shrinking quotas; currency issues as the dollar slides against the yen and euro; and rising fuel costs that impact everything from catching to processing to shipping the fish.

"The cost of energy is skyrocketing: Fuel has doubled in one year," Shaheen says.

"It is not just about catching the fish. You have freight surcharges on parts and supplies to keep operations going in Alaska, and additional fuel costs for manufacturing those goods. Just packaging the fish has increased around 30 percent, thanks to increased fuel costs. How do you recoup those costs?" he asks.

"Chances are that the price of raw surimi blocks is going to go up," says Michael Faris, president of Shining Ocean in Sumner, Wash., which makes the Kanimi brand of surimi seafood.

Faris says producers must decide whether to absorb the price hit.

"Costs of production in processing surimi seafood are going up, but whether we pass that price onto consumers is another story," he says.

Surimi seafood mimics crab, lobster, shrimp, scallops and even lox. High-end products include a percentage of natural shellfish meat, and recently some companies such as Trans Ocean and Shining Ocean started adding heart-healthy omega-3 oils into the mix as well.

Surimi seafood's versatility offers products that not only mimic the taste of the seafood, but the shape: from 5-inch-long whole crab legs to flake-style shredded pieces that resemble hand-picked crabmeat, the most popular product form for American consumers.

The similarity to shellfish products led the U.S. Food and Drug Administration to require the moniker "imitation crabmeat," a name hated by surimi-seafood producers. They fought for several years - and won in December 2006 - new labeling from the FDA on surimi-seafood products geared for the U.S. market.

While the new 11-word product description: "crab-flavored seafood made from surimi, a fully cooked fish protein," hardly rolls off the tongue, surimi-seafood producers say it helps consumers better understand the quality of the product.

"It's a little long but gets the word 'imitation' off the label so people don't think it's made from plastic," says Shaheen. 
Shaheen and Faris are among those marketers who say it is too early to judge whether the new labelling standard has delivered any significant market impact.


A marketing challenge

The versatile Alaska pollock is a cousin of cod and has a mild cod-like taste. In Alaska, quality measures include fast-freezing of the fish, and fish frozen just once, versus twice-frozen pollock, which is inferior in many quality attributes, including flavor, texture, odor and color.

"There is a global demand for this fish: Pollock is the most popular fish in the world," 
says Shanahan.

GAPP is working with retailers and foodservice operators to educate consumers about Alaska pollock. The group is also actively working with school systems nationwide to help place pollock into more school lunches. That includes developing recipes for school cafeterias to serve and conducting surveys to show that kids really do like to eat fish, 
she says.

Another marketing challenge for those selling Alaska pollock is helping consumers - who most often eat pollock as either as a fish sandwich or in deli surimi-seafood salad - understand that the basic ingredient is a sustainable, traceable and nutritious fish.

"One of the challenges in 
marketing pollock is that this fish has traditionally not been identified to consumers," Shanahan says.

She points out that sustainability is becoming an important selling point for many consumers, and the Marine Stewardship Council has certified U.S. Bering Sea/Aleutian Islands and the Gulf of Alaska pollock fisheries as models for sustainable fisheries management (see Top Story, p. 22).

Sustainability is certainly important to the McDonald's Corp., one of the industry's top pollock buyers, according to Lisa McComb, manager of corporate media relations for the OakBrook, Ill.-based fast-
food giant.

What is important to McDonald's is important to the pollock fishing industry: While McComb won't break down specific amounts in the mix, she does say McDonald's buys 120 million pounds of whitefish per year. Pollock is one of the key ingredients in McDonald's Filet-O-Fish, McComb says. Other whitefish species used in the sandwich include cod, hake and hoki.

"Primarily our suppliers source fish from different parts of the world, including Alaska's Bering Sea, New Zealand and Chile."

The Filet-O-Fish has been a core product on McDonald's national menu since 1965, but recently the company has been aggressive in finding sources for sustainable fish for the sandwich, McComb says.

"Over the past five years, in partnership with Conservation International, we have shifted purchases representing more than 18,000 metric tons, or 43.2 million pounds, of fish away from unsustainable sources [and to sustainable Alaska pollock]," she says.

That large corporations like McDonald's show interest in renewable seafood resources shows how sustainability is paying off as an important selling point for Alaska pollock, the largest MSC-certified whitefish fishery.

"Alaska pollock is traceable to the point of catch and it is sustainable. Our goal is to make sure Alaska pollock is appreciated for its benefits," says Shanahan.


Contributing Editor Thyra Porter lives in Cape Elizabeth, Maine


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