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Alaska seafood industry sets sights on emerging economies

Alex DeMarban
Courtesy ASMI

An ancient dish, a long-lived clam with an offensive prosbiscus, and tons of good old-fashioned wild salmon could help the Alaska seafood industry expand its presence in two of the world's fastest-growing economies.

Seafood marketers in the 49th state have already won big by tapping into China and capitalizing on a growing preference for wild, natural fish. The world's second-largest economy vaulted past Japan last year to become the top importer of Alaska products, with seafood leading the way at nearly $1 billion in sales.

The state-supported Alaska Seafood Marketing Institute is also focusing on Brazil, a nation that loves Alaska seafood but directly imports very little of it. The country of nearly 200 million will soon become the world's fifth-largest economy and the marketing institute hopes to go along for the ride.

Brazilians have a hankering for steak and other beef dishes. But they have a growing appetite for fish, too, in part because of government policy encouraging people to eat healthy. Meanwhile, Brazil harvests very little seafood of its own, said Jose Madeira, the Brazilian face behind the institute's newly opened office in Sao Paolo.    

"Huge," is how Madeira, who was recently in Anchorage for meetings, describes the potential market for Alaska.

Right kind of cod

One obvious opportunity is bacalao, or bacalhau as the Portuguese spell it -- the hardy dried and salted cod that became popular after the discovery of the New World, when tasty stocks of cod were found on the Grand Banks off Newfoundland.  

Brazil is the world's largest consumer of the stuff, thanks to its booming population and Portuguese heritage. Brazilian diners prefer the whiter bacalao made from Pacific cod, which primarily comes from Alaska, not the yellowish Atlantic cod that often originates in Norway.

Packages of bacalao from Norway note its origin, but the packages of bacalao from Alaska say nothing about the 49th state. Portuguese salteries, which make the most highly prized bacalao, process both kinds of cod before shipping it to Brazil. Alaska seafood marketers have talked with representatives from those processors about highlighting Alaska on labels.

Portuguese processing companies are interested because they can sell Alaska bacalao at a premium, he said.

"So on the packaging there would be information saying it's from Alaska and why it's such a great food," said Joe Jacobson, the Alaska Seafood Marketing Institute’s international marketing director.

Salmon, too

Madeira also thinks there's a huge growth opportunity for salmon in Brazil. The country has the world's largest number of Japanese descendants living outside Japan, and they love Alaska salmon, he said.  

But Brazil imports 99 percent of its salmon from Chile, where it's farmed. The marketing institute, through seminars, ads, a new website and other marketing tools, hopes to convince Brazilians that Alaska wild salmon is superior.   

"We have to create the culture of wild salmon because it doesn't exist in Brazil," Madeira said.

Selling Alaska salmon in Brazil could take years to develop because stores in Brazil can easily buy the cheaper farmed salmon from their South American neighbor. But wild sockeye salmon could gain a quick following because its vibrant red flesh stands out next to farmed salmon.

Other opportunities in Brazil include selling more salmon roe because of the demand for sushi in Sao Paolo and other cities, as well as pollock, Jacobson said.

Cheaper energy needed

Like the bacalao, most of the Alaska seafood consumed in Brazil doesn't arrive there directly. Instead, it might be partially processed in Alaska -- heads and guts removed – before traveling to places like China. That country imports huge amounts of Alaska seafood that it repackages and sells in other countries, including the U.S.

Couldn't Alaskan companies sell seafood directly to Brazil?

Not easily, said Jacobson. One reason involves the enormous cost of power in rural areas, where generators suck down diesel fuel whose price is hitched to the global cost of oil. Alaska processors can't afford to store large quantities of frozen fish for long. So much of it is immediately sold to processors from other countries.

Lower electric prices could help some Alaska processors do more direct shipping, he said. Some processors are trying to do just that, pursuing cheaper power through renewable energy. Trident Seafoods in Akutan, for instance, is studying the possibility of tapping into geothermal vents.  

"Reducing energy costs would probably be the single most beneficial thing to our industry," he said.

The institute hopes to increase direct Alaska exports to other countries. That includes trying to convince buyers that purchasing seafood directly from Alaska yields a higher-quality product that’s only frozen once. For example, the institute has worked with smokers in Europe to buy frozen fillets of fish directly from Alaska companies.

53% boost to China

Alaska pink and chum salmon that's processed in China, packaged and sent to other countries as fillets, fish sticks or burgers helped drive the phenomenal growth in seafood exports to that country. That figure rose from $613 million in 2010 to $939 million in 2011, a whopping 53 percent increase.

Pinks and chums represented more than $250 million of that total. Alaska salmon, prized for being wild and sustainable, was in high demand by processors. That seems to have helped spark a bidding war that boosted prices. While the number of pinks and chums exported rose, so did the value of each fish, Jacobson said.

The Alaska marketing group, which has a main office in Shanghai with satellites in other Chinese cities, is making inroads at Chinese stores, too. There, Alaska seafood must compete with live critters because the Chinese like their meals as fresh as possible.

"If your fish isn't flopping around when they bring it to you, you're at a disadvantage," he said.

Alaska seafood is usually dead and frozen by the time it reaches China, but Alaska marketers have learned that Chinese consumers will buy seafood with the head on. "Looking into the eyes of a fish" is one way to ensure its freshness, he said.

Exports of Alaska fish with their heads on has grown for high-value products such as yellowfin sole.

Jacobson also notes that properly frozen and handled seafood  can be as good as fresh.  The group is working to convince chefs of that by working with them at seminars and in culinary schools.

Also popular in China are sea cucumbers and the geoduck harvested by divers in Southeast Alaska. The Chinese can't get enough of that worm-shaped sea cucumber and the phallic-shaped clam that can live more than a century.

Demand there has driven up the price "exponentially" for those products in recent years, but Alaska exports of those items are a small part of the overall picture, representing about $7 million in sales, he said.

Contact Alex DeMarban at alex(at)alaskadispatch.com