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Seafood and Aquaculture Marketing Handbook
Seafood and
Aquaculture
Marketing
Handbook
Carole R. Engle
Kwamena K. Quagrainie
Madan M. Dey

SECOND EDITION
This [second] edition first published 2017 © 2017 by John Wiley & Sons, Ltd
Edition history: Blackwell Publishing Ltd (1e, 2006)
Registered Office
John Wiley & Sons, Ltd, The Atrium, Southern Gate, Chichester, West Sussex, PO19 8SQ, UK
Editorial Offices
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apply for permission to reuse the copyright material in this book please see our website at
www.wiley.com/wiley‐blackwell
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Library of Congress Cataloging‐in‐Publication data applied for
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Wiley also publishes its books in a variety of electronic formats. Some content that appears in print may not
be available in electronic books.
Set in 9.5/13pt Meridien by SPi Global, Pondicherry, India

1 2017
Contents

About the authors xiii

1 Seafood and aquaculture markets 1
Global trends in seafood and aquaculture markets 1
Where are most aquaculture crops produced? 4
What are the major species cultured worldwide? 5
What are the major finfish species caught and supplied
to world markets? 7
What countries are the major markets for seafood and aquaculture? 8
Trade in seafood and aquaculture 9
Are aquaculture products different from agriculture products? 9
Characteristics of aquaculture products 9
Market competition between wild‐caught and farmed finfish 12
Consumption trends in seafood and aquaculture markets,
expenditures, effects of income, and at‐home versus
away‐from‐home purchases 13
Aquaculture market synopsis: tilapia 14
Summary18
Study and discussion questions 19
References19
2 Demand and supply: basic economic premises
22
What is economics? 22
Demand23
Population27
Income27
Consumer tastes and preferences 28
Consumer behavior 28
Supply29
Costs of production 31
Technology31
Price determination 32
Elasticity32
Demand elasticity 34
Cross‐price elasticity 36
Price elasticity and total revenue 37
Elasticity of supply 38

v
vi   Contents

Market structures and implications for competition and pricing 38

Special demand and supply conditions 39
Aquaculture market synopsis: salmon 40
Summary44
Study and discussion questions 45
References45
3 Seafood and aquaculture marketing concepts 47
What is marketing? 47
Marketing plan 48
Market products 48
Supply chain and value chain 48
Processors49
Market or distribution channels 50
Transportation52
Wholesaling53
Brokers54
Retailing54
Food grocers 55
Livehaulers56
Restaurants56
Direct sales 56
Profit margins 57
Economies of scale in marketing 58
Supply chain management 58
Pricing systems 59
Price determination 59
Marketing margins, marketing bill, and farm‐retail price spreads 60
Pricing at different market levels 62
Price behavior, trends, and fluctuations 63
Geographic markets 64
Product storage 65
Market power 65
Advertising and promotion 66
Product grades, quality, and marketing implications 67
International trade 69
Aquaculture market synopsis: shrimp and prawns 70
Summary76
Study and discussion questions 76
References77
4 Market trends 80
The role of imports in U.S. seafood markets 80
U.S. seafood consumption 82
 Contents   vii

Food consumption away from home 84

Convenience in food preparation and consumption 85
Demand for healthy and wholesome foods 86
Sustainability and seafood 87
Certification of sustainability 89
The Marine Stewardship Council (MSC) 89
The Global Aquaculture Alliance (GAA) Best Aquaculture
Practices (BAP) 90
The Aquaculture Stewardship Council (ASC) 90
GLOBAL Good Agricultural Practice (GLOBALG.A.P.) 91
Traceability and labeling of seafood products 91
Country‐Of‐Origin Labeling (COOL) 92
Ecolabeling of seafood products 93
Seafood and the “local food“ movement in the U.S. 95
Organic seafood 96
Wholesale‐retailer integration in the food system 97
Electronic Data Interchange (EDI) 98
The Efficient Consumer Response (ECR) 98
The Efficient Food Service Response (EFR) 99
E‐commerce100
Aquaculture market synopsis: Pangasius spp. (swai, basa, and tra) 102
Summary104
Study and discussion questions 106
References106

5 Seafood market channels 109

Market channels for primary seafood products 109
Seafood distribution in developing economies 109
Seafood distribution in developed economies 110
Seafood distribution in the U.S. 112
Price discovery for primary commodities 113
Contracting and vertical integration in U.S. seafood business 113
Other transaction types in U.S. seafood business 115
Participation in food market channels 116
Distributors116
Wholesalers116
Channel ownership and control for secondary products 123
Consolidation and channel control 124
Channel coordination and leadership for secondary products 126
Channel agreements 128
Tying agreements 128
Exclusive dealing 128
Value chain analysis 129
viii   Contents

Channel conflict 129

Aquaculture market synopsis: trout 130
Summary132
Study and discussion questions 133
References134

6 Seafood and aquaculture product processing 136

Processing136
Structure of the seafood and aquaculture product processing industry 142
Concentration144
Vertical integration 146
Product characteristics 146
Entry into the industry 148
Plant location 149
Law of market areas 150
Capacity utilization 151
Innovation and branding 151
Challenges in aquaculture product processing 153
Aquaculture market synopsis: U.S. channel catfish 154
Summary158
Study and discussion questions 159
References159

7 The international market for seafood and aquaculture products 162

The basis for trade 162
Dimensions of the international market 163
Trade policy tools 167
Trade policy in seafood and aquaculture 169
The General Agreement on Tariffs and Trade (GATT) 169
The World Trade Organization (WTO) 170
U.S. Antidumping 172
Byrd Amendment, Continued Dumping and Subsidy Offset Act of 2000 172
Salmon trade conflicts 173
United States and Norway 173
United States and Chile 173
European Union and Norway 174
Blue crab conflict 174
U.S. crawfish and China 175
U.S. catfish and Vietnamese basa 176
Mussel conflicts 177
Shrimp conflicts 177
The Convention on International Trade in Endangered Species (CITES) 177
Aquaculture market synopsis: ornamental fish 178
 Contents   ix

Summary181
Study and discussion questions 181
Appendix 7A: The U.S. Antidumping Law 182
The U.S. Department of Commerce 182
The U.S. International Trade Commission (ITC) 183
References184
8 Marketing by aquaculture growers 187
Fish species and markets 187
Production systems and intensification 188
Sizes of producers 191
Supply response and biological lags 192
Commodities, markets, and niche markets for differentiated products 193
Farmers’ marketing alternatives 194
Sales to processors 194
Sales to livehaulers 194
Selling directly to end consumers 195
Marketing by fisher/farmer groups 198
Marketing cooperatives 201
Local cooperatives 201
Centralized cooperatives 201
Federated cooperatives 202
Mixed cooperatives 202
Marketing cooperatives as marketing agents 203
Marketing cooperatives as processing groups 203
Farmers’ bargaining groups 203
Marketing orders 205
Futures markets for aquaculture products? 206
Generic advertising of seafood and aquaculture products 207
Advertising of seafood – the National Fisheries Institute (NFI) 208
Salmon advertising – the Salmon Marketing Institute (SMI) 208
Catfish advertising – the Catfish Institute (TCI) 209
Tilapia advertising – the Tilapia Marketing Institute (TMI) 209
Trout advertising – the United States Trout Farmers
Association (USTFA)210
Aquaculture market synopsis: oysters 210
Summary213
Study and discussion questions 214
Appendix 8A: The Capper-Volstead Act 214
References216
9 Marketing strategies and planning for successful aquaculture businesses 219
Current market situation analysis 219
Market research 219
x   Contents

Competition222
Consumer attitudes/preferences 223
Analysis of business strengths and weaknesses 224
Developing the marketing strategy 226
Developing a retail outlet 227
Market segmentation 228
Products and product lines 229
Commodity markets 235
Niche markets 235
Value‐added products 236
Business organization and contracting 237
Sales238
The marketing plan 238
Aquaculture market synopsis: mussels 243
Summary247
Study and discussion questions 248
Appendix 9A: A sample market plan (hypothetical) 248
Executive summary 248
Vision248
Overall market situation analysis 249
References251

10 Marketing research methodologies 254

Types of research and design 255
Exploratory research 255
Qualitative research 256
Quantitative research 257
Data collection 257
Secondary data 257
Primary data 258
Sampling263
Questionnaire design 265
Response rate 266
Research on attitudes and preferences 266
Theories of choice behavior 267
Product research 268
Product ideas 268
Product testing 269
Market share research 270
Advertising research 270
Sales control research 272
Value chain research 273
Data analysis 275
 Contents   xi

Statistical summaries 275

Relationships between variables or responses 278
Discrete choice analysis 280
Conjoint analysis 282
Traditional demand analysis 284
Aquaculture market synopsis: baitfish 285
Summary288
Study and discussion questions 289
References291
11 Seafood demand analysis 293
Demand theory 293
Theoretical properties of demand 294
Approaches to modeling fish and seafood demand 295
Commodity grouping and separability 298
Other issues pertaining to estimating demand for seafood 299
Data301
Scanner data 302
Elasticities and flexibilities of seafood demand 303
Estimates of elasticities and flexibilities of seafood demand 304
Recent estimates of elasticities/flexibilities of seafood
demand in developed countries 304
Recent estimates of elasticities/flexibilities of seafood demand
in developing countries 318
Aquaculture market synopsis: crawfish 319
Summary323
Study and discussion questions 324
References  324
12 Policies and regulations governing seafood and aquaculture
marketing330
Regulatory frameworks for seafood and aquaculture 330
Food safety 331
Industry‐initiated programs 333
Regulation of food safety 335
Organic standards 338
Green labeling and standards 339
Marketing and transportation of live aquatic animals 340
Aquatic animal health and biosecurity 341
Aquaculture market synopsis: mariculture of grouper, snapper,
tuna, and cobia 342
Summary343
Study and discussion questions 344
References344
xii   Contents

Glossary347
Annotated bibliography of aquaculture marketing information sources 365
Annotated webliography of sources of data and information
for aquaculture marketing 373
Index390
About the authors

Carole R. Engle, Ph.D., is Owner/Manager of Engle‐Stone Aquatic$ LLC, a

consulting company that specializes in the marketing and economics of aquacul-
ture. She has more than 35 years of experience in the analysis of economics and
marketing issues of aquaculture in the U.S. and around the world. She has worked
in 20 different countries on all major continents, using her combined understand-
ing of aquaculture and economics to benefit aquaculture businesses and to assist
aquaculture research and extension scientists. She previously worked for 27 years
as Full Professor, Director of the Aquaculture/Fisheries Center, and Chairperson
of the Department of Aquaculture and Fisheries at the University of Arkansas at
Pine Bluff. Through Engle‐Stone Aquatic$ LLC, she continues to provide expertise
to aquaculture researchers, extension aquaculture scientists, and aquaculture
businesses on strategic planning, marketing, and financial analysis. She has served
as President of the International Association of Aquaculture Economics and
Management, the U.S. Aquaculture Society is a Chapter of the World Aquaculture
Society, and continues to serve on both the IAAEM and WAS boards. She is a
three‐time recipient of the Joseph P. McCraren Award of the National Aquaculture
Association, Researcher‐of‐the Year Award from the Catfish Farmers of America
and two‐time recipient of Service Awards from the Catfish Farmers of Arkansas.
She also serves as Executive Editor of the Journal of the World Aquaculture
Society and as Editor‐in‐Chief of Aquaculture Economics & Management.

Kwamena K. Quagrainie, Ph.D., is Associate Professor in Aquaculture Economics

and Marketing in the Department of Agricultural Economics at Purdue University,
Indiana. He leads Purdue University’s engagement efforts to the aquaculture
industry in Indiana as well as the efforts of Illinois‐Indiana Sea Grant Program on
aquaculture development in Illinois. He has over 20 years of industry and research
experience in economics and marketing issues related to both agriculture and
aquaculture. In addition to his work in the U.S., he works in Asia and Africa on
economics and marketing issues in agriculture, aquaculture, and fisheries. He
leads a team of interdisciplinary researchers from universities across the U.S. that
has developed an internationally recognized aquaculture program in Africa with
funding from USAID. He serves as a director on the U.S. Aquaculture Society
board, and chairs the board’s promotion and membership committee. He is an
Associate Editor of the Journal of Applied Aquaculture and coordinates the review
of submitted manuscripts with focus on economics and social sciences. He also
serves on the editorial board of Applied Aquaculture Economics & Management.

xiii
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