« January 2008 Table of Contents 
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