Upcoming trends in the industry
This article was written by IFFO and published in Frontline of Fisheries early February 2020
The world is changing rapidly and China is a good reflection of this fast-evolving landscape: transition from a manufacturing to a service-based economy, trade war with the United States, geopolitical moves across the world such as the Chinese Belt and Road initiative. In addition to these, digitalisation and competition to promote the most advanced technologies across the world, demands for transparency and accountability can be noticed everywhere.
Food, health and hygiene standards
Globalisation and digital tools make it easier for citizens to compare standards from one country to another. Food, health and hygiene standards now capture heightened attention worldwide and this will keep increasing in the coming years. This trend has become obvious in the upcoming trade talks between the United Kingdom and the United States following Brexit: should the UK stick to the standards that were set up by the European Union or accept the United States’ standards, such as those that include « chlorinated chicken » ?
IFFO can only applaud the intense scrutiny that feed and food are now facing, as food safety is of the utmost importance. Fishmeal and fish oil are high value ingredients, supplying nutrition in a unique package, and at IFFO we fully endorse the idea quality feed means quality food. Indeed, we believe that this trend will strengthen the drive for, and uptake of, certification schemes, which provide additional reassurance within the whole value chain, down to the end-consumers.
It is worth mentioning that certification has driven positive change within the marine ingredients industry. Since the creation of the Global Standard for Responsible Supply for fishmeal and fish oil, now known as MarinTrust, ten years ago, the industry has made tremendous progress, with now more than half of all marine ingredients worldwide being MarinTrust certified. At IFFO, we are keen to see this trend go even further and the Global Standard for Responsible Supply for fishmeal and fish oil ambitions to certify 75% of all marine ingredients by 2025.
When it comes to health and hygiene standards, fishmeal and fish oil are a well-known factor in the food industry: they carry with them decades of science, data and information regarding the safety and quality of the products. Some other feed ingredient industries show similar levels of supporting information, such as some of the plant-based ingredients like soy. That said, it is interesting to note that only 2% of soya and 19% of palm oil worldwide is certified annually, a performance well below that of the global fishmeal and fish oil industry. For some of the new ingredients, they face the reality of entering a mature feed ingredient market where because they are so new there may be a lack of regulation for their products, a lack of data and information, and a lack of track record of nutritional performance.
An increasing need for reassurance regarding traceability
Beyond safety and health standards, responsible sourcing and production, and continuity of supply are expected to remain strong drivers within the value chain. Responsible sourcing should be increasingly seen as a prerequisite in the food sector as both human rights and animal welfare increasingly come under scrutiny.
Sustainability has been a key word since the late 1980s, starting with the Brundtland report (1987) and culminating in the introduction of the United Nations’ Sustainable Development Goals a decade later (1995). Today, the fishmeal industry has to consider how to source, produce and distribute its products responsibly, protecting workers’ rights and welfare but also taking the livelihood of local communities into account on a long-term basis.
In the marine ingredients sector, concerns regarding the continuity of supply trigger a continuous rise of interest for additional raw materials – including improving the collection of byproduct material, and the use of algae, krill, zooplankton, mesopelagics, as new raw material sources that could supplement current fishmeal and fish oil production levels. These will keep being available only in limited quantities (five million tonnes of fishmeal and one million tonnes of fish oil annually) but will remain the foundation for aquafeeds because of their unmatched nutritional profile.
Regulations are needed to drive positive change
Certification can provide reassurance on sourcing and production practices but can’t replace regulations. At IFFO, we are convinced that regulations and law enforcement have a pivotal role to play in order to drive positive change. International organisations, governments and local authorities are key in any improvement process and are indispensable when it comes to support industry-led initiatives. Regulations keep evolving, as it recently did regarding safety and well-being on fishing vessels through the International Labour legislation (ILO 188). So will consumer expectations.
Marine ingredients : key players in the circular economy
The circular economy is a key component of sustainability. In the marine ingredients sector, the circular economy has always played an important role. Indeed,the processing of fish for human consumption gives rise to byproduct in the form of heads, viscera, frames, skins and others such as tails, fins, scales, mince, blood, etc. This material may constitute up to 70% of fish and shellfish after processing where fish fillet yield is species-dependent and is often in the range of 30 - 50% of the fish. The waste generated after processing is actually valuable raw material from which fishmeal and fish oil may be produced. As a raw material source, this material is still underutilised, especially in Asia, and there is scope for increased fishmeal and fish oil production from seafood byproducts. At IFFO, we expect the utilisation of byproducts to keep rising, especially in Asia, and we encourage this trend actively.
Digitalisation will support this positive change towards more responsibility. As technologies are becoming cheaper and faster, they will play a decisive role in compliance and transparency, optimal utilisation, and improve the value of products by providing advanced analytics, precision feeding, live feedback loops and traceability.
Rising incomes mean new expectations
The world’s population is growing at a fast pace, especially in Asia and Africa, generating an increasing need for proteins. Aquaculture contributes more and more to feeding the world’s population with highly nutritious products. 62% of seafood consumed worldwide is expected to come from aquaculture in 2030. To continue facing these needs, aquaculture relies on a good supply of quality feeds that farmed animals would eat in the wild.
As a commodity which is traded throughout the world, fishmeal and fish oil were impacted by the trade war between China and the United States. A solution is expected to be found in the near future.
More specifically, « imports have also been driven by China’s so-called “consumption upgrade,” which has spurred demand for overseas food products perceived to be safer and better quality », according to China Ocean Dialogue. Chinese seafood consumption has surged by 50% over the past decade. Between 2005 and 2015, demand for shrimp doubled, making China increasingly reliant on imports. This is very likely to remain true in the coming years.
Another trend which has been observed is related to petfood. The Chinese petfood market, fuelled by global trends, enjoys a growth potential. According to Kemin, only 2 to 4 percent of Chinese households own pets, compared with about 65 percent in the US. With rising incomes, the Chinese market has a huge potential, which is expected to drive an increase in the need for fishmeal and fish oil.
As a conclusion, we have no doubt at IFFO that the coming years will mean more focus on traceability and responsibility, with the support of certification schemes and digital tools. The marine ingredients industry will continue to contribute to feed the world’s population with nutritious products and will keep on raising awareness on emerging issues that need to be tackled in order to allow everyone to access healthy food while preserving the oceans’ health.