The industry is set to return to growth, with revenue expected to grow 2.7% and total $9.8 billion.
Los Angeles, California (PRWEB) October 26, 2011
The Seafood Preparation industry is projected to grow at a moderate rate over the five years to 2016 due to the continued recovery of US fishing activity following the 2010 BP oil spill and moderate growth in domestic and export demand for seafood, according to IBISWorld, the nation’s largest publisher of industry research. Domestic demand for seafood is anticipated to increase as income and spending grow along with the strengthening economy. In addition, continued trends toward healthy eating will further increase per capita seafood consumption. Supply issues surrounding fish populations and overfishing will linger, but growth in fish supplies through aquaculture and imports should quell concerns. In addition, moderately rising seafood prices will aid industry profit because operators will be better able to plan costs and pass down cost increases to consumers. Over the five years to 2016, IBISWorld forecasts industry revenue to grow at an average rate of 3.7% per year to $11.7 billion, including a 1.1% nudge in 2012.
According to IBISWorld analyst Josh McBee, the Seafood Preparation industry has faced major hurdles over recent years. “The recession cut demand for seafood products, resulting in weak sales, falling profit and an array of other negative consequences,” says McBee. “Then in 2010, just as demand was returning, the Deepwater Horizon oil spill in the Gulf of Mexico dealt another blow to seafood processors.” All commercial and recreational fishing activities in a massive section of the Gulf were temporarily closed as cleanup efforts commenced, slashing supply to processors across the country. “In 2011, the industry is set to return to growth, with revenue expected to grow 2.7% and total $9.8 billion. Revenue is expected to fall 0.9% on average annually during the five years to 2011.”
A major driver of industry growth following the recession will be strengthened consumer spending brought about by rising incomes. In 2009, disposable income fell for the first time in more than a decade, cutting demand for seafood. In 2011, seafood demand will grow marginally as Americans gain confidence in the strengthening economy. Per capita disposable income will rise 1.6% over the year, recording stronger growth than in the previous five years. Seafood is relatively pricey, so rising incomes and increasing consumption due to awareness of health benefits will further spur demand.
The availability of seafood supplies has been an issue for this industry in the past five years. Decades of overfishing in some US waters are creating headaches for the entire seafood supply chain, from fisheries to seafood processors. The aquaculture industry represents an alternative source of supply for seafood. Although prices for farmed fish are higher, fish produced from commercial farms offer processors greater predictability. However, the Fish and Seafood Aquaculture industry (IBISWorld report 11251) is currently limited in its ability to expand production and is facing increased competition and penetration from imports.
The Seafood Preparation industry is characterized by a low level of concentration. Major players include, Trident Seafoods Corporation, Nippon Suisan Kaisha Ltd., Dongwon Enterprise Co Ltd., Bumble Bee Foods LLC and Thai Union Group.
After slowly recovering in 2011 and 2012, the industry is expected to grow at a solid rate over the five years to 2016. IBISWorld forecasts that industry revenue will increase at an average rate of 3.7% per year to total $11.7 billion. Domestic demand for seafood is projected to increase due to income growth and continued trends toward healthy eating and convenient foods. Over the period, demand and revenue will also rely on the domestic fish stocks and production, which will depend on wild catch, aquaculture and raw seafood imports.
For more information, download the full report from IBISWorld on the Seafood Preparation industry
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