It is no secret that the global shrimp industry has had to shape-shift dramatically in the face of the pandemic, but Permira-owned feed behemoth Grobest says some changes that happened over the last year could transform shrimp production for years to come.
The first half of 2020 saw the foodservice industry badly hit by locked-down markets -- China in the first quarter, the United States and Europe in the second and third.
The drop-off in the global foodservice sector in the first half of 2020 greatly impacted the foodservice-reliant shrimp industry, which experienced negative growth overall in 2020.
Shrimp, which is tilted heavily toward the foodservice segment, saw retail sales pick up to "a surprising extent," albeit not quite to the extent needed to bridge the gap left by shuttered foodservice supply chains, Grobest CEO Samson Li told IntraFish. "People still need to eat," he said.
And all this re-channeling and changed consumer behavior mean the producing landscape has shifted, with a demand for different sizes and preparation of product to cater to home consumption.
Each Southeast Asian producing country has its own specialties, said Li, and what kind of product, the extent of processing and its sales channel have all determined the ranking of least and worst-hit in the pandemic.
One country has really stood out in Li's mind.
"Indonesia is perhaps the winner of COVID in 2020, mostly due to its sales channels," he said.
This is largely because of its huge volume share of the US market, where a consumer switch to retail has been strongest, but also because it was already retail-centric.
"Compared to Thailand or India or Vietnam, their connection with the retailers actually helped them to grow. They almost got tailwind in 2020," said Li, with fast growth and good prices.
In the bigger picture, Vietnam also gained an advantage. While the country's producers were forced to move large volumes of shrimp at discount prices into other markets when China shut down, their ability to produce a diverse range of products helped cushion the blow.
"They were selling all kinds of product, from commodity to well-prepared -- ready-to-eat and ready-to-cook. And also to East Asia, like Japan, Korea, Hong Kong, where they are looking at more high-value products. So Vietnam has been well positioned on that," said Li.
Despite the shrimp industry's challenges, Grobest retains an unerring commitment to the sector.
"Total consumption has not dropped too much and the retail pick-up gives a strong message," said Li. "The second half particularly sent a very encouraging message that people still have a strong appetite for shrimp."
Several strings to its bow
Grobest also works with the high-value marine fish segment, which has seen a similar market impacts to shrimp: despite COVID limitations, "demand is not dropping."
Li has witnessed a trend for consumers to eat more locally produced goods, particularly with concerns around COVID-related packaging fears in China. But he believes this will be short-term.
And despite a year of "strong headwinds," mergers and acquisitions are still very much in the cards for the Taiwanese company.
"There are still ongoing discussions," Li told IntraFish.
The company has been building talent across its regions over the last year, with several key hires and a focus on Vietnam, Indonesia and China, all markets in which the company wants to build. In the last year alone, it snapped up executives from big name competitors such as Nutreco, Regal Springs and Benchmark.
Its core product, functional feed, has also seen strong uptake, particularly in countries intensifying their shrimp operations, such as Thailand and Vietnam.
"We are looking at very robust growth," said Li. "We have the right people, the right R&D and the right science, so we are very positive about the future."
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