USA
Overseas Market Introduction Service on Market Research for Sea Fish Industry Authority
Produced by: Lauren Dickerson Niall Gordon Julia Orlov New York Date of Report: 14 September 2015
The Overseas Market Introduction Service ("OMIS") is provided by the Commercial Departments of Diplomatic Service Posts overseas as part of the joint trade development operation, UK Trade & Investment, of the Foreign and Commonwealth Office ("the FCO") and the Department for Business, Innovation and Skills (“BIS”). Whereas every effort has been made to ensure that information provided through OMIS is accurate, these Commercial Departments, UKTI, the FCO and BIS accept no liability for any errors, omissions or misleading statements in such information and accept no responsibility as to the standing of any firm, company or individual mentioned. Any party interested in the goods or services provided by any company referred to in OMIS material should undertake their own research and should not consider a reference in OMIS material to be an endorsement of any goods, services or companies mentioned.
CONTENTS
PAGE I. II. III. IV. V. VI. VII.
VIII.
IX.
X.
EXECUTIVE SUMMARY TRADE ENVIRONMENT - Demographics of the US Market LEADING SEAFOOD IMPORTS AND EXPORTS LANDINGS KEY PORTS US CONSUMPTION & TRENDS ROUTE TO MARKET - UK Export Opportunities - Supply Structure - Retail Chains - Foodservice Chains KEY REGULATIONS AND TARIFFS - Food and Drug Administration Requirements - Customs and Border Protection Requirements - Fish and Wildlife Service Requirements - Food and Drug Administration Import Procedure USEFUL LINKS - Associations - Publications - Trade Shows CONTRIBUTORS
3 5 5 6 10 12 15 16 16 16 17 18 19 19 20 20 21 23 24 24 24 25
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I.
EXECUTIVE SUMMARY
SUMMARY OF THE ENQUIRY Seafish Industry Authority (Seafish) commissioned this research to have a brief market overview of the US seafood industry. METHODOLOGY A variety of sources were used when preparing this report including:
Commercial and customised databases Internet research Trade associations and other relevant organisations
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KEY FINDINGS & RECOMMENDATIONS 1. UKTI found that the US is the largest single importer of fish and fishery products globally. The National Oceanic and Atmospheric Administration (NOAA) reported that in 2014, the US imported 2,523,120 metric tonnes of edible fishery products. 2. Seafish should be aware of the three major trade shows in the US: the Seafood Expo/Seafood Processing America, Aquaculture America Exposition and Global Seafood Market Conference. 3. Seafish should advise UK fisheries that shrimp, salmon, canned tuna, tilapia, and pollock are the most consumed seafood in the US. 4. Seafish should advise UK companies that they will need to consider the large size of the USA when visiting the market. Long distances between (and within) cities are the rule, and it is not unusual to have difficulty scheduling more than three or four appointments in the course of a day, even within the same city. 5. In the USA, product literature is generally produced in 8.5-inch by 11-inch format. Seafish should consider suggesting to UK companies to produce literature destined for the USA in this size, so it will fit into US files. Seafish Industry Authority should be sure to use imperial measurements rather than metric measurements (except for scientific products), and to have their literature checked for US spelling changes, grammar, and nuances. 6. Seafish should also consider taking advantage of the U.S. Press Release Service offered by UKTI. This service is intended to raise awareness of a service, brand or product line that we feel has a compelling hook in the US market. A press release will be written and approved by Seafish. It is then targeted at trade journals and other media in the USA. This service must be commissioned through the Overseas Market Introduction Service (OMIS). For more information, please contact ResearchUSA (
[email protected]).
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II.
TRADE ENVIRONMENT
The economy of the United States of America is one of the most developed and strongest economies of the world with a per capita GDP of $54,800. Demographics of the US Market Population (2015 est.)
321.4 million
Land Area
9.16 million sq. km
Capital
Washington, D.C.
Other main cities
New York, Los Angeles, Chicago, Miami , San Francisco, Dallas, Houston
Language (2011 est.)
English 79.2%, Spanish 12.9%, other Indo-European 3.8%, Asian and Pacific island 3.3%, other 0.9%
Currency
USD ($)
Exchange rate
$:£ = 1.55
Total food imports (2013 est.)
$109.46 billion
Total food exports (2013 est.)
$144.4 billion
Top 3 import partners (2013)
China 19.6%, Canada 14.6%, Mexico 12.3%
According to the Department of Agriculture Fisheries and Forestry of Australia, the US offers a sophisticated seafood market characterised by: growing import trade strong currency low tariff barriers low non-tariff barriers well-developed network of transport and logistics well developed markets offering good price for quality product stable quarantine and bureaucratic establishment business conducted in English language NOAA reported that US consumers spent roughly $86.5 billion on fishery products in 2013, including $57.9 billion at food service establishments and $28.1 billion on home consumption.
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III. LEADING SEAFOOD IMPORTS AND EXPORTS
Source: NOAA
The US is the world’s largest importer of fish and fishery products, with Japan and China following in second and third place, respectively. Over three-fourths of the seafood consumed in the US is imported, the bulk originating in China, Thailand, Canada, Indonesia, Vietnam, and Ecuador. In fact, NOAA estimates that US seafood production accounts for only 2% of US consumption. According to the Food and Agriculture Organization of the United Nations, the US imports roughly 13% of global seafood by value.
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Source: NOAA
NOAA valued US imports of edible fishery products in 2014 at $20.2 billion, an increase of 12% from 2013. The US imported 2.5 million metric tonnes of seafood in 2014. Edible imports included 2 million tonnes of fresh and frozen products valued at $17.8 billion and 312,138 tonnes of canned products valued at $1.9 billion. Approximately 567,551 tonnes of shrimp were imported in 2014. Valued at $6.7billion, shrimp imports accounted for 33% of total import value. 301,280 tonnes of fresh and frozen salmon were imported and valued at $2.7 billion. Fresh and frozen tuna imports were 166,272 tonnes, a decrease of 19.7% from the preceding year, valued at $951 million. Canned tuna imports also decreased, dropping down 12.4% to 155,193 tonnes valued at $94.4 million.
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Source: NOAA
The US imported $125 million of edible fish product from the UK in 2013 and $153 million in 2014 for both edible and non-edible fish product. Leading import partners for edible fish product in 2013 included China, Canada, and Thailand.
Source: NOAA
In 2014, the US exported 1.5 million tonnes valued at $5.3 billion, with fresh and frozen exports were 1.4 million tonnes valued at $4.6 billion. This category consisted of
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158,492 tonnes of salmon valued at $581.2 million, 178,493 tonnes of surimi valued at $411.8 million and 51,668 tonnes of lobsters valued at $301.3 million.
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IV.
LANDINGS
Overall commercial landings value has been, for the most part, increasing since 2008, although shellfish landings have experienced a few fluctuations. In 2013, total value was estimated at $5.54 billion, an 8% increase from the 2012. Total volume stood at 4.45 million metric tonnes, a 4% increase from 2012.
Source: NOAA
Source: NOAA
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Source: NOAA
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V.
KEY PORTS
In 2013, Dutch Harbor, Alaska received the most trade by volume of all ports in the US, followed by the Aleutian Islands, Alaska, and Kodiak, Alaska.
Top 10 US Ports by Volume, 2013 Rank
Port
Volume (Millions of Pounds)
1
Dutch Harbor, AK
752.5
2
Aleutian Islands (Other), AK
469.5
3
Kodiak, AK
425.6
4
Empire-Venice, LA
421.9
5
Reedville, VA
317.7
6
Intracoastal City, LA
248.9
7
Cameron, LA
194.7
8
Alaska Peninsula (Other), AK
187.2
9
Pascagoula-Moss Point, MS
171.1
10
Astoria, OR
158.7
Source: NOAA
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On the other hand, it was New Bedford, Massachusetts which received the most seafoodrelated trade by value.
Top 10 US Ports by Value, 2013 Rank
Port
Value (Millions of Dollars)
1
New Bedford, MA
379
2
Dutch Harbor, AK
197.2
3
Kodiak, AK
153.6
4
Aleutian AK
5
Alaska Peninsula (Other), AK
102.1
6
Honolulu, HI
95
7
Cordova, AK
91.5
8
Naknek, AK
88.6
9
Sitka, AK
84.3
10
Empire-Venice, LA
82.5
Islands
(Other),
104.9
Source: NOAA
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VI.
US CONSUMPTION & TRENDS
In an effort to be more health conscious, Americans may increase the amount of fish in their diet. The growing incidence of heart disease in America is well-documented; according to the Seafood Nutrition Partnership, heart disease alone results in at least 800,000 deaths per year in the US. Health organisations such as the American Heart Association recommend the intake of foods rich in omega-3 fatty acids twice a week, although only 25% of Americans adhere to the suggestions. There is a rising demand for safe seafood. Outbreaks of foodborne illnesses such as E.coli and salmonella, paired with ecological concerns following the Deepwater Horizon oil spill and the Fukushima Daiichi nuclear disaster have made consumers more cautious about their food sources. According to IBISWorld, per capita consumption of seafood declined 5.7% in 2011 and 4.7% in 2012. While some consumers are reacting by turning to locally-farmed seafood, there still remains concern over potentially hazardous fish procured from the Pacific Ocean and the Gulf of Mexico. Furthermore, the Food and Drug Administration as well as health organisations advise that pregnant and nursing women reduce their fish intake due to potential mercury toxicity. Consumption Patterns US fish consumption has decreased by almost 16% since 2005, when Americans consumed a record 16.6 pounds per capita. NOAA’s 2013 report estimated that the average American ate 14.5 pounds of fish and shellfish in 2013, a 0.7% increase from 14.4 pounds in 2012. Per capita consumption of fresh and frozen products remained constant at 10.5 pounds. Fresh and frozen finfish consumption was at 5.6 pounds per person, while fresh and frozen shellfish, primarily shrimp, accounted for 4.9 pounds per person. Canned fish product consumption was reported as 3.7 pounds, a 2% increase from the preceding year. Cured fish accounted for 0.3 pounds per capita, the same as the year before. Shrimp, salmon, and canned tuna accounted for 59% of total seafood consumption in 2013. The top ten consumed species have been consistent for the past ten years, with the exception of tilapia, whose share has increased steadily, scallops and flatfish, which have moved in and out of the list. Consumption of this freshwater fish has nearly doubled in the past five years, when per capita consumption was at 0.41 pounds.
Top 10 Species by Consumption, 2013 Rank
Species
Per Capita Consumption 14
(Pounds) 1
Shrimp
3.6
2
Salmon
2.7
3
Canned Tuna
2.3
4
Tilapia
1.4
5
Alaska Pollock
1.2
6
Pangasius
0.8
7
Cod
0.6
8
Catfish
0.6
9
Crab
0.4
10
Clams
0.4
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VII.
ROUTE TO MARKET
UK Export Opportunities According to NOAA’s import database, the top UK seafood imports to the US by value in 2014 were Atlantic salmon, followed by trout, canned sardines, and mackerel. The UK imported approximately $87 million of whole or eviscerated salmon and $47 million of fillets. Considering the popularity of salmon, and especially salmon fillets in the US, salmon exports present a strong market opportunity for British fisheries. Furthermore, British companies can take advantage of the trends mentioned in the previous section, including health and safety consciousness, by positioning themselves as producers of nutrient-rich seafood sourced from clean waters.
Supply Structure The US seafood industry is very dynamic and fragmented with the presence of importers, regional distributors, wholesalers and sales brokers who form the major actors in the supply chain. UK exporters entering the market for the first time might find this slightly challenging and even inefficient in comparison to the UK. UK Fisheries
USA
Importer s
Sales Brokers
Wholesaler/Distributor
Restaurants Ex: Red Lobster, Bonefish Grill
Wholesale Clubs Ex: Costco, Sam’s Club
Local Retailers
National Supermarkets Ex: Wal-Mart, Kroger
Direct to Retailer This method is best for either exceptionally small or exceptionally large product orders or private label businesses. With the former, a small exporter may have an opportunity to sell small quantities directly to the retailer. The retailer may manage all importing dealings and logistics to store; or may not. Larger companies may handle these details themselves. Thai Union Group, for example, bypasses wholesalers by operating its own
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manufacturers’ sales branches and offices (MSBOs). More businesses are deploying this strategy to cut on operating and ultimately retail costs. Importer/Distributor Most companies use an importer to secure product within the US. The importers then sell these products (at a marked-up price) to a distributor, wholesaler, chain warehouse or foodservice distributor. The distributor will sell product into retail outlets. Most distributors are specialised, as some deal with certain supermarket chains, independents, etc. Sales Broker Food brokers are essentially sales people for hire. Given the huge number of US stores selling food, no company can afford an employed sales force that would cover more than a small fraction of the store universe. Brokers work on a commission basis, and may also charge retainers to work on introducing new products from smaller companies. Typical grocery commissions range from 2 to 5% of the product’s wholesale price.
Retail Chains Roughly one-third of seafood consumed in the US is purchased at supermarkets and local retailers for home consumption. Large retailers end to stock internationally-sourced products.
Top 10 Supermarket Chains Company
No. of Stores
US Retail Sales ($ billion)
Websites
Wal-Mart Stores Inc.
4,024
288.05
www.walmart.com
The Kroger Co.
2,625
108.5
www.thekrogerco.com
AB Acquisition LLC
2,238
56.44
www.albertsons.com www.safeway.com
Publix Super Market Inc.
1,097
30.56
www.publix.com
Ahold USA Inc.
761
25.98
www.aholdusa.com
H-E-B Grocery Co.
363
22.59
www.heb.com
Delhaize America Inc.
1,296
16.90
www.delhaizegroup.com
Meijer Inc.
213
15.40
www.meijer.com
Wakefern Food Corp.
141
14.70
www.wakefern.shoprite.com
Whole Foods Market
414
14.19
www.wholefoodsmarket.com
Source: Progressive Grocer
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Foodservice Chains About two-thirds of the seafood consumed in the US is purchased at restaurants and other food service establishments. Items such as fish portions, breaded shrimp, and clams tend be most commonly served at chain restaurants. Seafood may also be used in a variety of meals offered by mid-priced restaurants.
Top 5 Seafood Restaurant Chains Restaurant Chain
No. of Outlets
Revenue (In $ million)
Websites
Landry's Inc.
450
3000
www.landrysinc.com/concepts
Red Lobster
679
2600
www.redlobster.com
Bonefish Grill
206
622
www.bonefishgrill.com
Long Johns Silvers
1200
555.1
www.ljsilvers.com
Captain D's Seafood
520
499.9
www.captainds.com
Source: Nation’s Restaurant News
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VIII. KEY REGULATIONS AND TARIFFS Imported fish or seafood products cannot legally enter the US until the merchandise has been authorised by Customs and Border Protection (CBP) and the Food and Drug Administration (FDA), and estimated duties have been paid. It is the importer’s responsibility to arrange the examination and release of the goods.
Food and Drug Administration Requirements All domestic and imported edible seafood products intended for consumption in the US market are subject to regulation and examination by the FDA. In practice, the FDA conducts only a small number of inspections on seafood imports, typically when there has been cause for concern, as the examinations are expensive. All exporters will have to register their food facility with the FDA and get a registration number. Afterwards, importers of seafood must file the Prior Notice with the FDA before a shipment arrives in the US. Below is an overview of standards that will apply to UK food imports. More detailed information on FDA regulations and registration can be found on the agency’s website. Food Quality Hazard Control System
Analysis Critical Point (HACCP)
Bioterrorism Act
Food Safety Modernization
The FDA authority of the US requires all sea food and related products that are being introduced in the US market for edible purposes to implement a Hazard Analysis Critical Control Point (HACCP) system for identification of significant food safety hazards and to maintain control measures for elimination, prevention and minimization of any plausible damage to public health. The responsibility of ensuring the compliance with the HACCP as well as with the sanitation standard operating procedures in the traded sea food commodity lies with the party initiating the market entry i.e. the importer is responsible for ensuring compliances associated with all the imported sea food products. These measures include foreign facility and importer inspections, seafood sampling, and domestic surveillance of imported products. The Bioterrorism Act or the Public Health Security and Bioterrorism Preparedness and Response Act of 2002 became effective on 12th December 2003. This act mandates all the handlers, manufacturers, processors and packagers of sea food and related products in the US to be registered with FDA without which the right to entry in the US territory stands cancelled. The act also requires a prior notification to FDA about all the food products that are to be imported into the US territory. This ensures the track record of flow of edible goods into the country. The Food Safety Modernization Act requires importers to 19
Act
prove that their foreign suppliers have controls in place to ensure food safety; the certification can also be acquired from qualified third parties. Further, the FDA can deny entry of product into the US if they are denied access to the manufacturing facility.
Packaging and Labelling Low Acid Canned Food and Acidified Food Regulations
Country of Origin Labelling (COOL) Requirements
Low Acid Canned Food (LACF) compliance is based on the HACCP compliance put in by FDA, which requires all the processors of thermally processed low acid packaged foods in hermetically sealed containers or of acidified foods (AF) to register each processing plant. The products could only be imported and distributed in the US territory after submission and approval of the production process forms by the FDA. This law requires retailers to label all unprocessed, fresh and frozen seafood products. Labels must declare country of origin and method of production, i.e., ‘wild’ versus ‘farm-raised.’ Processed seafood, that is any that has been cooked, cured, or canned, and seafood that has been combined with other foods are exempt from this requirement. Specialty seafood stores and restaurants are also exempt.
Customs and Border Protection Requirements The US Customs and Border Protection’s responsibilities include assessing and collecting duties, taxes and fees on imported merchandise, as well as providing documentation to the FDA for required testing. The CBP advises consulting an import specialist at the desired port of entry to ensure that all regulations are being met. Importers also have the option to hire a Customs Brokers to file entry with CBP; this allows an expert to handle the complex details of importing food items. Lists of Customs Brokers can be found on each state’s port page. Species Protection Shrimp Exporters/Importers Declaration
The trade requirements for importing shrimps into the US requires all importers to have a DS 2031 form from the exporter testifying that the shrimp boats took necessary precautions to avoid harming sea turtles. This form is to be retained by the importer for three years after entry and must be made available to the CBP or the State Department upon request.
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US Fish and Wildlife Service Requirements The US Fish and Wildlife Service regulates the import and export of living or dead wild shellfish and fish products. Non-living shellfish and finfish intended for human consumption are exempt from Service Import requirements as long as they are not considered injurious or endangered species. A comprehensive document can be found here.
Food and Drug Administration Import Procedure Below is an outline of the import procedure from the FDA website which highlights the relationship between the FDA and US Customs during the process. All fisheries would need to register their food facility before exporting product to the US. The following steps occur after you have a FDA number.
Step 1: Importer or agent need to file entry documents with US Customs Service within five working days of the date of arrival of a shipment at a port of entry. Step 2: FDA is notified of an entry or a regulated food through: Duplicate copies of Customs Entry Documents (CF 3461, CF 3461 ALT, CF 7501 or alternative); Copy of commercial invoice; and
Surety to cover potential duties, taxes and penalties.
Step 3: FDA reviews the entry documents received from Customs for all seafood entries. The Agency then decides whether to release, visually examine, or sample a given shipment. Step 4A: If a decision is made not to collect a sample the FDA sends a ‘May Proceed Notice’ to US Customs and the importer of record. The shipment is released as far as FDA is concerned. Step 4B: A decision to collect a sample based on: Nature of the product; FDA priorities; and Past history of the commodity FDA sends a ‘Notice of Sampling’ to US Customs and the importer of record. The shipment must be held intact pending further notice. A sample is collected from the shipment. The importer of record may move the shipment from the airport to another port or warehouse. Step 5: If FDA obtains a physical sample it is sent to an FDA district laboratory for analysis. Step 6A: If analysis finds the sample in compliance with requirements the FDA sends a ‘Release Notice’ to US Customs and the importer of record.
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Step 6B. If analysis determines that the sample ‘appears to be in violation of the Food, Drug and Cosmetic Act and other Acts’ the FDA sends US Customs and the importer a record of Notice of Detention and Hearing which Specifies the nature of violation(s); and Gives the importer of record 10 working days to introduce testimony as to the admissibility of the shipment. The hearing is the importer’s only opportunity to present a defence of the importation and/or present evidence as to how the shipment may be made eligible for entry. The importer has the choice of reconditioning the product (i.e. bringing the article into compliance, if this can be done), destroying it or re-exporting it. Step 7: If FDA approves the importers proposed reconditioning procedure, the reconditioning may then proceed under FDA supervision. Step 8: If the reconditioning is successful, FDA may release the goods; if not, the goods must be re-exported or destroyed, under US Customs supervision.
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IX.
USEFUL LINKS
Associations National Marine Fisheries Services
National Fisheries Institute
SeaShare
National Restaurant Association
National Grocers Association
Seafood Products Association
Seafood Nutrition Partnership
Seafood Industry Research Fund FishChoice
NOAA's National Marine Fisheries Service is the federal agency in the US which is responsible for the management, conservation and protection of living marine resources within the US Exclusive Economic Zone. It is a division of the Department of Commerce. It is an organisation which stands for the advocacy of the seafood industry in the US. Its horizon of operations spans across each element of the seafood supply chain in the country, and the organisation’s directory is available for public view online. The National Fishers Institute has several councils representing major seafood markets, including shrimp, salmon, and tuna. SeaShare is a non-profit agency which was formed with the aim of linking the North Pacific seafood industry to food banks across the country in an effort to provide high quality seafood protein to needy people in the US The National Restaurant Association (NRA) is the largest foodservice trade association in the world by membership and supports over 500,000 restaurant businesses. The National Grocers Association (NGA) is the national trade association representing the retail and wholesale grocers that comprise the independent sector of the food distribution industry. NGA hosts an annual conference with over 300 exhibitors. The Seafood Products Association provides resources on regulatory compliance, and conformance with customer requirements related to food safety, quality, and legality. The Seafood Nutrition Partnership is a non-profit that advocates for the health benefits of seafood consumption. The Seafood Industry Research Fund is a non-profit fund for seafood-related research grants. All research reports are available on its website. FishChoice is a sustainable seafood directory of approximately over 450 suppliers, used by over 3,500 seafood professionals.
Publications Seafood Source
Seafood Source is the leading industry resource that has 23
Fishermen's News
Fish Farming News
Commercial Fisheries News
Nation's Restaurant News
Progressive Grocer
Supermarket News
replaced print magazine Seafood Business. Seafood Source provides content on a daily basis, as well as a supplier directory and market reports. Fishermen’s News is one of the oldest commercial fishing publications on the Pacific Coast of the US It is considered to be one of the independently owned commercial fishing publications in the market. Fish Farming News is a national business newspaper providing coverage on the US aquaculture industry. The publication has over 7,500 readers in the industry. Commercial Fisheries News is the Northeast’s commercial fishing industry monthly newspaper. CFN covers waterfront and legal news. Regular features include market reports, a safety column, new boats, the enforcement report, and a classifieds section. Nation’s Restaurant News provides industry reports, trend information, and news coverage for the food service industry. Progressive Grocer is a monthly print and digital publication covering industry news, trends, data, and rankings. Supermarket News is a nationally circulated trade magazine for the food distribution industry. Their website features real-time news and a free daily e-newsletter service.
Trade Shows Aquaculture America Exposition
Seafood Expo/ Seafood Processing America
Global Seafood Market Conference
It is an annual food & beverage trade show and event which is organized by The World Aquaculture Society and features aquaculture industry in US This is the largest seafood related exposition, bringing together more than 20,000 buyers, suppliers, and other seafood industry professionals from over 100 countries. The conference focuses on developments in the international seafood market and is segregated by individual market levels based on price point.
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X.
CONTRIBUTORS
Lauren Dickerson & Niall Gordon UKTI USA Email:
[email protected] [email protected] Julia Orlov Project Manager, Altios International for UKTI Email:
[email protected]
If you are exploring the US market, have you considered Mexico or Canada? Mexico is a member of NAFTA and on the doorstep of the United States. If you would like to know more about the market for your product in these countries, you can commission a similar report to this one by contacting your local International Trade Team through the UKTI web site: www.ukti.gov.uk
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