The world is coming through the COVID-19 impacts in various ways. Some countries are doing better than others. Some industry sectors have thrived, some have survived and sadly many have disappeared. Seafood has had both good and bad outcomes, but the most important aspect is if you have survived the global pandemic then you need to be getting organised for your next chapter and ensure you are in the box seat.

There is no single seafood industry COVID-19 story. The degree of exposure, impact and recovery for sectors and businesses, whether wild caught or farmed or where you are in the supply chain, varies from positive, neutral, negative and in a few cases, catastrophic.

The closer you were to your market, likely the better outcome you have had. The longer the supply chain the more you probably suffered from the logistical nightmares that were experienced. If your emphasis was on high valued white tablecloth restaurant trade, then you would have suffered more compared with those that engaged in retail/supermarket sales.

The ability of producers to be fleet of foot and be prepared to adapt and change to alternative markets was strongly highlighted in success stories. Conversely if you were locked in to exporting only live and fresh product you would have been sucked into a negative vacuum.

In Australia it has been reported that those supplying domestic retail and take-away food service markets which normally compete with fresh international imports experienced a rise in demand

and in some cases, price. As a result, value of these types of domestically sold products generally

remained relatively stable with any decline in production volumes offset by rising domestic prices. At the opposite end of that positive scenario was that live and fresh export products were significantly negatively impacted due to a decline in both price and volume, noting particularly that the value of Lobster and Abalone exports declined by 45%, while live and fresh seafood exports overall declined in value by 32% compared with the five-year average for the same period.

No matter where you are on the chain you likely experienced substantial transaction costs because of adaptation to ensure business continuity. New laws reacting to C-19; higher levels to ensure food safety; increased logistical costs; improving packaging; labour issues such as physical distancing and other preventative health measures including COVID-19 safety planning and biosecurity requirements for imported and exported products, etc.

Governments across the world have struggled to find perfect solutions which is not unexpected in the circumstances. Some have dug deep to implement grants/loans and programs, but it has been hit or miss and impacts will be felt for many years.

In Australia, the pandemic effects on aquaculture production and value were not as bad as they could have been as the sector has a lower exposure to live export markets and a greater focus on retail markets. Additionally, the production is not large by world standards and quantities cannot be rapidly adjusted in response to disruptions. Of course, those engaged in exports such as Oyster and Abalone growers did experience interruption and impact.

Imported seafood is important to Australia’s seafood industry as they contribute approximately 65% of Australian seafood domestic consumption. China, Thailand, Vietnam, New Zealand (NZ) and Indonesia are the top five countries by value from which Australia imports seafood which lead the frozen and canned sectors and overall, both have done very well throughout the pandemic period. This is especially so in lower price-point fish sold by food service businesses, including fish and chip shops, Asian style food-court vendors and the lower tier dine-in outlets, such as cafes, pubs, and clubs. Imports are also important in the food catering sector which services accommodation and travel, hospitals, aged care, prisons, cruise ships, etc. These sectors rely on affordable, shelf stable, ready to use, portion controlled, no waste products, typically frozen cartons of processed seafood – requiring form and volumes not produced in Australia. Clearly an opportunity for future thinking in Australia.

Retailers have benefited from selling imported frozen product (thawed) at wet fish counters and those nimble operators who invested time and effort into changing packaging to enable wholesale product intended for the food service to be split into retail ready packs found life profitable. Being adaptable saw more versatile companies seizing new opportunities by diverting product destined for restaurants to be sold at wet fish counters thus eliminating potential losses.

What the pandemic has seen is a change in direct sales from producers to final consumers and whilst small in proportion of total sales by volume this maybe an area for the future expansion. In Australia, the market was affected by the disruption to export and competing import markets for live Australian seafood and by COVID-19 preventative health measures introduced which had the effect of curtailing regional tourism and visitation and thereby seafood tourism in these areas.

For example, farm gate sales of products such as fresh Oysters were affected by the drop in inbound international tourism. The decline in direct sales decreased more dramatically during the lockdown phase as restrictions on domestic travel reduced tourism visitation levels to regional areas while physical distancing restrictions limited the operations of farm gate retail outlets. This resulted in farm gate outlets shutting and staff lay-offs and strongly impacted revenue as farm gate prices are typically higher than wholesale.

In some States, sales of Oysters and Finfish species by producers via home delivery or fishing ports close to metro areas increased especially during the lockdown phase. ‘Back of the boat’ sales of Rock Lobster increased as producers were no longer able to sell the normal volumes into export markets in China. This trend continued across the lockdown and initial easing phases as the price of product into these export markets remained low even when resumed. It was reported from a survey of Tasmanians about food access and supply, 22% reported buying Rock Lobsters directly from fishers during the COVID-19 lockdown period (UTAS 2020).

In a survey it was reported that aside from loss of sales, employment costs were impacted. Thirty-five percent of farms reported an average of 15% increase in labour cost due to COVID-19, driven by increased safety requirements, the space and equipment needed to manage excess oyster inventories and heightened biosecurity risks. Seventy-seven percent of farms accessed government support programs.

Our industry is subjected to a wide range of cost variables, many of which are not easily controlled, and the pandemic has become another of these creating ‘the perfect storm’ to deal with. It is even harder in our area of food production as most of our stock is underwater and not in minds eye like it is in say the beef industry. Riding out the storm will take a lot of doing and much can be learned from sharing information and knowledge.

The Fishmonger suggests you follow these tips: -

Happy Fishmongering!

References:

2016-128-Product-Impacts-COVID19-Report-01Mar2021.pdf (frdc.com.au)