ABSTRACT

Tilapia has become one of the more popular seafood entrees in the U.S. As total seafood demand increases, and wild catch has reached maximum sustainable yield, aquaculture products have filled the demand. As high quality tilapia products began to appear, its recognition as a quality seafood product has increased in the U.S. In the 1980’s most of the demand was for live fish which were grown in the U.S. In the late 1980’s, whole frozen fish imported from Taiwan began to appear in U.S. markets. During the 1990’s imports of fresh and frozen fillets of tilapia have rapidly increased in volume.

Taiwan continues to be the single largest exporter to the U.S., supplying over 50% of all tilapia products. Mainland China, Thailand and Indonesia are significant exporters to the U.S. as well. Many tilapia producers have begun processing in their home countries, exporting fillets. So far, most fillets from Asia have been supplied frozen, while products from Costa Rica and Jamaica have been sold fresh.

Several of the largest tilapia producers and exporters to the U.S. have jointly funded the Tilapia Marketing Institute (TMI). The TMI has begun a broad ranging program to increase U.S. demand for tilapia products. The Institute is pursuing a generic campaign to increase demand for all product forms of tilapia.

INTRODUCTION

Tilapia has been called the "Fish of the 90’s" by seafood writers in the US. This has been reflected in the rapid increase in consumption by American consumers. No records of consumption were determined before 1992, when imports of tilapia were first reported as a separate commodity. Since that time consumption has grown to over 51,645 metric tons of live weight equivalent fish. (Live weight equivalent is calculated as 1.1 times the weight of frozen fish and 3 times the weight of a fillet). Per capita consumption has increased from 0.08 kg in 1993 to 0.19 kg in 1998 (Engle 1997, Posadas, in press). Tilapia sales have exceeded those of trout in the U.S. each year since 1995.

Early marketing

Before 1986 virtually all U.S. demand for tilapia products was met by domestic production. Most of this demand was for live fish from Oriental restaurants and grocery stores. Small farms in the western and southern U.S. supplied Oriental communities on the West Coast and in urban centers of the South. Fish were transported live to markets either by the producers or by independent live haulers. Around 1986, imports of frozen whole tilapia from Taiwan began to appear on the US West Coast. These products were distributed primarily through Oriental markets.

Demand for tilapia has grown as Oriental and other ethnic consumer groups have increased in number and in level of disposable income. Other groups of early consumers were international aid workers and biologists who were acquainted with tilapia during international work. The general public's knowledge of tilapia slowly increased as small farms were started around the U.S. and international travelers tried tilapia dishes in other countries. Tilapia distribution has now widened to include seafood restaurants and seafood counters in some grocery stores. In the late 1980’s, tilapia producers in the state of Idaho devoted considerable resources to developing markets on the U.S. West Coast. In the 1990’s, Rain Forest Tilapia and Regal Springs Tilapia have developed markets on the U.S. East Coast. Rain Forest imports most of its product from Costa Rica while Regal Springs imports tilapia from Indonesia.

Organization of the Tilapia Marketing Institute (TMI) should provide a further boost to demand in the US. TMI was founded in 1998 and funded ($250,000) by several large producers and marketers with the goal of increasing awareness and demand for tilapia products (TMI 1999). TMI has nine producer members and one member from the packaging industry. The TMI strategy is to position tilapia by identifying its most favorable attributes and matching these to the needs of a target market. It expects to accomplish this by working closely with food journalists to prepare informative stories reporting on tilapia and its place in the seafood market. A series of strategic messages will be developed which will be highlighted to create a strong image of tilapia with consumers. Several themes will then be presented to the food press to reinforce and diversify the basic message about tilapia. Key positioning statements, phraseology and themes have been proposed and are under consideration by the TMI members.

TMI’s generic campaign will be designed to benefit all tilapia producers and product forms. No differentiation will be made between U.S. and foreign products. However, all producers will be under pressure to insure that only the highest quality products would be offered to the market. With a generic campaign, all producers suffer if any one should distribute poor quality fish. Additional members are being recruited in order to generate additional funding to support marketing efforts directly, to increase the potential of getting government funds to support marketing, and to bring producers together to insure that only high quality products reach the market.

PRICING

Prices for tilapia products vary considerably across the U.S. Live fish sold by the producer will range from $2.20 to $6.60 per kg at the farm. Prices for processed forms also vary considerably (Table 1.)

Table 1. Typical prices for Tilapia products sold in the U.S. (August 1999.)

(Developed from personal communications and advertisements)

Some of the price range in product forms is due to size differences of the products. In general, larger fish and larger fillets will bring a higher price per kilogram. In the U.S. market, consumers prefer live fish greater than 450 g. Fish of 700 - 800 g bring the highest prices. Fillets are typically graded into 4-6 ounce and 5-7 ounce packages, with the larger grade bringing $0.20 to 0.50 more per kilogram.

It should be noted that virtually all forms are sold for the same prices, or even lower, than they were five years ago. Supply has at times exceeded demand, and prices have not increased. This pattern has been observed in other widely aquacultured products including trout, salmon, catfish, striped bass, clams, shrimp, and mussels. Newly domesticated stocks and rapidly advancing technology have managed to keep the costs of production down as supply rapidly increases from new and existing farms. The low prices further encourage demand, which has been met with new supply.

Shift in product forms.

1993 was the first full year in which tilapia imports were recorded as a separate fish commodity. Imports of whole frozen tilapia were 10,046 mt in 1993. Since 1993, imports of whole tilapia have increased steadily at 2,000 to 3,000 mt per year, reaching 21,534 mt in 1998. Recognizing the demand for fillet products in the U.S., growers in several countries began processing tilapia before exporting to the U.S. Import levels of frozen fillets rose quickly from 612 mt in 1993 to 2,347 mt in 1994. Frozen fillets have remained near this level into 1999. Fresh fillets have demonstrated a steady climb from 586 mt imported in 1993 to 3,590 mt in 1998 (Figures 1 and 2). Fresh fillets bring a slightly higher price in the U.S. Boneless, mild flavored fish fillets are preferred by American consumers and restaurant chefs. Tilapia fillets have been substituted for several more traditional fish products and this market niche will show the most rapid growth (Fitzsimmons and Posadas 1997).

In most of the producing countries, low labor costs encourage value adding through processing. Rapid advances in quality and dependability of land and air transportation have further increased the availability and quality of fresh tilapia fillets exported to the U.S. Several countries have also adopted Hazard Analysis at Critical Control Points (HACCP) procedures for their seafood processing regulations. This has encouraged processors to meet high standards and facilitated imports to the U.S.

Taiwan has been the major supplier to the U.S. but in recent years there has been a marked increase in production in Central and South America (Table 2.) The exports from some countries have decreased in recent years as their domestic markets have increased. Colombia and Mexico have ceased exports, while Costa Rica, Ecuador and Indonesia have increased (Fitzsimmons, in press). Figure 3 shows the distribution of tilapia supply (by Live Weight Equivalent) for the U.S. in 1998.

CONCLUSIONS

Tilapia markets in the U.S. are segmented between live fish, whole frozen fish, frozen fillets and fresh fillets. Growth in the live market has slowed in recent years. The traditional ethnic market demand (Los Angeles, San Diego, San Francisco, Vancouver, Houston, New Orleans, New York and most importantly Toronto) seems to be met and additional markets must be developed. Grocery stores and restaurants with live tanks, and local "farmer markets" are the mostly likely sectors to expand. Supplies of live fish from U.S. producers will continue to supply most, if not all, of the demand.

Markets for whole frozen tilapia are still large and demonstrate some continuing growth. This market, mostly supplied by product from Taiwan and increasingly the mainland of China, has a much lower growth rate than fresh fish fillets. Whole frozen fish still accounts for 50% of all tilapia imports. This product has the most uneven record for quality and the market price continues to sink. Improved quality of the fish should be a priority if market is to expand.

Frozen tilapia fillets have demonstrated almost no growth in imports since 1994. The primary source has been Indonesia and Thailand, but increasing amounts are imported from Taiwan. Additional marketing may be required to further expand this market. This should be a huge market, as this product form is used in restaurants and sold in grocery stores. Demand for frozen fillets will be a prime focus of the TMI.

Fresh tilapia fillets have demonstrated the most rapid growth of any tilapia product form. Some U.S. producers are now distributing fillets and imports have gone from 586 mt in 1993 to 3590 mt in 1998. The primary sources of fresh fillets have been Costa Rica, Jamaica and Ecuador.

U.S. consumption of tilapia is likely to continue expanding at a rate of 20% per year compared to virtually no increase in overall seafood consumption. Greater consumer awareness of tilapia as a product and increased marketing activity generated by the TMI and others (American Tilapia Association 1999) should further increase demand.

REFERENCES

American Tilapia Association 1999. www.tilapia.org

Engle, C. 1997. Marketing tilapias. Pp. 244-258. In: Costa-Pierce, B.A. and J.E. Rakocy. Tilapia Aquaculture in the Americas. Vol. 1. World Aquaculture Society, Baton Rouge, LA.

Fitzsimmons, K. and B. C. Posadas. 1997. Consumer demand for tilapia products in the U.S. and the effects on local markets in exporting countries.

Fitzsimmons, K. (in press) Tilapia aquaculture in the Americas. In: Costa-Pierce, B.A. and J.E. Rakocy. Tilapia Aquaculture in the Americas. Vol. 2.

Posadas, B. C. (in press) Tilapia marketing in the northern Gulf of Mexico Region. In: Costa-Pierce, B.A. and J.E. Rakocy. Tilapia Aquaculture in the Americas. Vol. 2.

Tilapia Marketing Institute 1999. Tilapia positioning research and recommendation. Upstream. Portland, ME.