What’s the value proposition for alternative seafood?

Billions of people rely on healthy oceans as a source of livelihood and food, and the demand for fish protein is only increasing. Projections reveal a growth of 14 per cent by 2030 versus 2020 levels. This means future growth cannot rely on incremental growth in wild-caught seafood. And while aquaculture has been the primary source of new fish supply in recent years, it has not been able to keep pace with demand. So-called alternative seafood—substitutes for popular fish and shellfish provide a solution  to help scale up seafood growth and provide high-end protein at the same time. Although still in its infancy, alternative seafood is promising  across three production options, each with its own advantages: plant-based, fermentation-enabled, and cultivated. Let’s dive deeper into this alt food source.

Healthy oceans are a source of jobs and food, and the demand for fish protein is only increasing. For example, a recent survey in Singapore showed a fivefold increase in the desire to purchase seafood compared with only ten years ago. The projections according to “The State of World Fisheries and Aquaculture 2022” by The Food and Agriculture Organisation (FAO), show growth of 14 per cent by 2030 versus 2020 levels, driven by growing markets in Asia, Europe, Latin America, and Oceania. That said, the amount of wild-caught seafood remains flat, with more than 85 per cent of the world’s fisheries pushed to or beyond their limits. This raises the question: as more nations develop, will there be enough seafood to meet growing demand? 

This means future growth cannot rely on incremental growth in wild-caught seafood. And while aquaculture has been the primary source of new fish supply in recent years, it has not been able to keep pace with demand. So-called alternative seafood—substitutes for popular fish and shellfish such as tuna, salmon, and shrimp—provides one way to help scale seafood and provide high-end protein. Although still in its early days, alternative seafood shows significant potential across three production options, each with its own advantages: plant-based, fermentation-enabled, and cultivated.

Alternative seafoods have begun to make a presence in Asian markets but not much is known about their current market share, the increasing involvement of big businesses and governments, and the long-term prospects for growth in the region. Commenting on the Asian alternative seafood market, Amod Salgaonkar, Co-Founder & Chief Operating Officer, A2S2 Enterprises, said, “Though Asia already leads the world in the traditional seafood trade, it is poised to gain global dominance in the nascent alternative seafood segment. There are many other startups working on plant-based seafood in different countries of Asia which may be expected to be seen in the coming years.”

Need to take notes from Alternative Meats 

Currently, alternative seafood is mainly produced by two types of technologies, plant-based and cell-based seafood. The former is already quite popular, preceded by the rapid expansion of the plant-based meat industry and caters to consumers looking to reduce consumption of animal-source foods. To meet this demand, upwards of 20 well-established companies have emerged and are producing products mimicking shrimp, both canned and raw tuna, fish fillets, and burgers as per The Good Food Institute. These products have reached the mass markets and are already available for purchase.

“To date, alternative proteins have focused on three widely consumed meat types: chicken, pork, and beef. But seafood is a much more diverse food class, with several species consumed in large volumes around the world. In an effort to understand the potential value proposition for alternative seafood at the species level, one needs to look at several popular seafood varieties and make comparisons around total production, share by source, and market size,” said Tom Brennan, Partner, McKinsey & Company.

In a recent report (The Next Wave of Alternative Seafood Solutions) published by McKinsey, the researchers gave an example of the tuna market to understand the potential value proposition for alternative seafood. According to the report, the tuna market is the third largest in terms of annual production. In addition, there are different price points and consumer expectations depending on the species, whether albacore, bluefin, or other premium tuna steaks. Players developing alternative seafood products will need to consider all of these points when making strategic decisions.

Barriers to Breakthrough

Alternative seafood remains a whitespace in the global alternative protein landscape. The number of companies developing alternative seafood for the U.S. and European markets is growing, but the majority of conventional seafood is produced and consumed in Asia. While conventional seafood has historically been plentiful in Asia Pacific, alternative seafood offers a safer and more sustainable form of seafood production. Before alternative seafood can scale, it will need to strike a balance between overcoming challenges and finding potential sources of advantage. Here are a few challenges- 

Controversy behind the nutritional profile

The nutritional advantages of the present seafood alternatives as a part of a healthy diet are still unclear and more work is required to improve their nutritional profile in terms of macro- and micro-components, by developing a new generation of reformulated products and providing a more complete nutritional information to consumers. 

A 2022 study which aimed to evaluate, for the first time, the nutritional quality of seafood alternatives launched in the global market from 2002 to 2021 and to compare them with conventional seafood products showed that the products had extremely variable nutritional profiles, and, in many cases, a substantial lack of nutritional equivalence with the corresponding conventional seafood products (lower protein contents, higher calories, higher fats and salt contents). 

The price point 

The most significant challenge for the alternative seafood industry is bringing the cost of production down to a level that’s comparable to what consumers are currently paying for higher-end species. In turn, these higher-end species are attractive for producers of alternative options, at least for the time being, because their target prices are more achievable. In fact, this is part of alternative seafood’s competitive advantage over meat: fish often sells at a higher price point. For example, some types of seafood, such as bluefin tuna, can cost $40 to $200 a pound for premium or superpremium cuts, which is a much easier price point to hit than $4.99 a pound for ground beef.

R&D efforts for better consumer acceptance

Plant- and cell-based seafood may eventually generate similar food system outcomes, but the major differences in production, regulation, and marketability require some separate lines of research. Public and independently funded fundamental research may help level the playing field. Other research areas outside the scope of this review will likely influence the growth of the alternative seafood sector and also merit research, including seafood coproduct valorisation, use of plant-based extenders in seafood, and substitutes or alternative production methods for high-quality animal feed ingredients, such as fishmeal and fish oil.

Additionally, alternative seafood products need to deliver on taste and incorporate strategic messaging about their nutrition and health benefits, such as their lack of mercury. While ingredient optimisation, sensory testing, and innovative manufacturing techniques will ultimately help products deliver on taste, frequent sampling and targeted marketing campaigns also play an important role in giving consumers a positive impression of alternative seafood flavours. 

Policy interventions 

It is essential to understand how markets for plant- and cell-based seafood are likely to develop in different regions, the main drivers of this development, and how these markets will interact with those for conventional seafood. Current growth projections are extrapolated from the alternative meat sector and the trajectories of individual businesses. However, the emerging nature and current small size of the alternative seafood sector makes it difficult to predict how it will interact with other sectors and be adopted by consumers.

Government guidance is necessary, especially regarding broader societal impacts, such as production methods that allow for more consistent, reliable, and localised seafood supplies that are more resilient to food system shocks, as most recently and dramatically highlighted by the global COVID-19 pandemic.

Nisha Marwaha, Consultant, Sustainable Aquaculture Program, WorldFish, Malaysia, said “Concrete policy and programme recommendations are necessary to guide the development of plant- and cell-based seafood to generate well-governed value chains that maximise societal benefits. This first requires an understanding of how plant- and cell-based seafood value chains are likely to differ from those of conventional seafood and an understanding of the influence of markets, policies, or stakeholders on its development. It is also important to determine which areas of plant- and cell-based seafood value chains offer the greatest opportunities for decent employment, especially for women, youth, and other marginalised groups.”

Boosting accessibility is a key

For plant- and cell-based seafood to contribute to food and nutrition security, they need to successfully enter growing markets. There is first a question of accessibility of plant- and cell-based seafood to consumers in various geographic regions, economic classes, and cultural and social groups. Decisions by plant- and cell-based seafood producers regarding species, product form, and inputs can be made with intention to reach specific markets. Likewise, there are important questions regarding the nutritional potential of plant- and cell-based seafood, how the nutrient profiles compare with those of conventional seafood, and how they might best be used as nutrient delivery platforms, especially where food-based solutions to hunger and malnutrition are being considered.

The potential of alternative seafood to contribute to inclusive, equitable, and sustainable food systems remains to be seen. Alternative seafood may complement existing initiatives for sustainable fisheries and aquaculture but could also introduce new stressors on food systems. The longevity of its popularity, its contributions to food and nutrition security, and its potential influence on the conventional seafood sector will help define its place as an emerging fad, common food, or feed ingredient. If, however, alternative seafood is here to stay, it is crucial that its development is supported by sound evidence, social and environmental standards are upheld, and planning and management are integrated with that of fisheries and aquaculture.

Mansi Jamsudkar


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