The US organic shrimp market is niche, with 45,000 metric tons of potential - 08.22.18
August 22, 2018
Like with other organic food products, today’s consumers are willing to pay a premium for organic shrimp.
They think of it as a healthier and more sustainable product compared to conventional or even ASC or BAP-certified shrimp. while the organic shrimp market in Europe is developed quite well, this is not the case for the U.S. With a 7 percent growth rate (compared to 1 percent for the rest of the food market), organics is the fastest growing segment in the U.S. food sector. The organic food market share now constitutes 6 percent of the total food market and is worth USD 49.4 billion (EUR 42.5 billion). However, organic seafood (and thus shrimp) standards have yet to be developed. ShrimpTails spoke with Don Berger, owner of Seadex, an organic shrimp importer, and advocate of organic shrimp, about why the U.S. fails to keep up with Europe.
In the United States, organic food standards are managed by the U.S. Department of Agriculture’s (USDA) National Organic Program (NOP). To Berger’s disappointment, though, there is not yet organic shrimp available on the U.S. market carrying the USDA NOP logo. He explains that, contrary to the EU, which has had organic aquaculture regulations since 2007, the USDA has so far not developed its own organic seafood standards. One possible reason for this is the strong lobby of the domestic seafood producers who don’t want to lose market share. At the same time, it does not help that consumers tend to perceive wild seafood as “good” and farmed seafood as “bad”. As long as this does not change, it is unlikely that consumers in the U.S. will put sufficient pressure on the USDA to speed up its development of organic seafood standards.
For shrimp distributors wishing to add organic shrimp to their product range, there is a way to work around the absence of a U.S. organic seafood standard. In 2015, the U.S. and the E.U. established a joint policy of equivalency. Under this agreement, when both markets have organic standards for the same product, it can be marketed under each market’s own specific certifications. Hence, organic raisins from California can be sold in the E.U. under the E.U. green leaf logo and organic raisins from Italy can be sold in the U.S. under the USDA organic logo. With this in mind, even though there is no USDA organic shrimp standard, many states in the U.S. allow companies to promote organic shrimp produced under E.U. standards provided that the seller states that these organic standards are European and he does not use the USDA NOP logo. When asked about the market potential in terms of pricing of organic shrimp, Berger explains that the often higher cost of organic shrimp is sometimes confusing.
Organic shrimp costs more than conventional shrimp for a number of reasons. One reason is that EU organic standards do not allow added water (treatment with phosphates or non-phosphates). According to Berger, the final organic shrimp product easily weighs 12-percent less than conventional shrimp, which is treated to increase weight and size. Moreover, the costs incurred to meet the often strict requirements regarding traceability and the chain of custody certification, as well as for auditing and getting certified, all make organic shrimp a more expensive product.
Nevertheless, Berger is convinced that there is much potential for organic seafood in the United States, especially for shrimp. In fact, it is the only category in the food market to show any real potential for growth. The U.S. imports less than 250 metric tons of organic shrimp a year. In general, 6 percent of the total market share is taken up by organic produce in the wider food industry, so if shrimp were to match this, the organic shrimp imports could be about 45,000 metric tons, worth USD 700 million (EUR 603 million).
“I am amazed,” Berger informed ShrimpTails, “that those seafood companies looking to grow their business by adding new breaded products don’t do anything for organics.”
With his company Seadex, it is Berger’s ambition to convince more U.S. distributors to include organic shrimp in their product range. Currently, Seadex sources organic shrimp from a number of sources: Black tiger shrimp (P. monodon) from Indonesia, Vietnam and India, and Pacific white shrimp (L. vannamei) from Ecuador, Costa Rica, and Honduras.