Alaska, by far the largest producer of seafood by volume and value in the United States, is a critical bellwether for how the country's seafood sector is performing overall.
The Alaska Seafood Marketing Institute (ASMI) -- a state marketing agency funded in part by levies on seafood processors -- spends millions each year to promote Alaska seafood around the world, and serves as a critical spearhead for the industry in key markets.
A wide range of economic, geopolitical and biological factors impacted the state last year, and the agency is facing new challenges.
ASMI Executive Director Jeremy Woodrow took a look back at 2022, and offered his best predictions for what lies ahead in 2023.
What were the biggest challenges for Alaska seafood last year?
The invasion of Ukraine and sanctions against Russia led to uncertainty in the global marketplace.
Russia harvests many of the same seafood species as Alaska and, as a result, certain markets began to shift.
In addition to the devastating impact on our partners in Ukraine, overall uncertainty is never a good thing, as proven throughout the first two years of the pandemic.
While we have certainly experienced shifts in the global market, this has created both challenges and opportunities. In response, it has been critical for ASMI to work closely with the Alaska seafood industry so that we can focus our efforts on the right markets.
Shipping costs also continue to weigh heavily on the Alaska seafood industry. As a result many companies are reconsidering where their product might be reprocessed.
When shipping a product twice (once for reprocessing and then again to a final market), under current pricing it may now be advantageous to consider the cost of labor in the final destination versus total shipping costs. However, developing reprocessing markets takes time. I do believe that this will be worth the effort once established.
The closure of Alaska’s iconic red king and snow crab fisheries is top of mind and has, as expected, captured headlines. The science points to these closures as primarily a result of climate change and unfavorable ocean conditions.
The closures are a clear example of responsive fisheries management in action, but these actions have a huge financial impact on the communities, fishermen and companies who participate in those fisheries.
If there is any silver lining, it’s the many ways the industry has come together to better understand the stock declines, support the affected fishermen and communities, and find a sustainable and responsible path forward.
It’s critical to have scientific surveys to inform the health of these stocks so that they can continue to be monitored for potential future harvest. It’s an important challenge for ASMI to help Alaska seafood customers understand the complexities behind the crab fishery closures, while also connecting them to other Alaska seafood options.
Amid all the challenges, what milestones did you achieve last year?
ASMI celebrated its 40th year in 2021. So 2022 marked the beginning of a new decade. When ASMI was created, there really wasn’t another organization like it anywhere. After 40 years, numerous organizations, both large and small, have formed following a similar model to ASMI’s. This is good for the entire seafood industry, as it makes seafood more competitive against other protein categories.
Thanks to these many years of experience, and our relationships around the globe, ASMI has been very nimble, turning challenges into opportunities to diversify export markets and build demand in the domestic United States.
Our recent All Hands on Deck meeting of the Alaska seafood industry proved the ongoing importance and value of our core mission: working together to raise the economic value of Alaska seafood through marketing.
The Alaska seafood industry continues to be a key economic driver for the state of Alaska. The seafood industry is the largest private sector employer in Alaska, employing over 62,000 workers with a combined income of $1.75 billion (€1.6 billion) annually.
Despite our challenges, the Alaska seafood industry is as strong as ever.
What are the biggest challenges you expect for Alaska seafood in 2023?
Inflation is impacting consumer spending everywhere. Seafood is often viewed as a luxury purchase for many consumers and is often left out of the basket when money is tight. This is magnified in many overseas markets where the strength of the US dollar and import tariffs on Alaska seafood further increase the price point.
The healthy, wild and sustainable characteristics of wild Alaska seafood are difficult to match, and our research shows consumers of all generations agree. Positioning Alaska seafood as a good value under these attributes will be important.
Any changes or strategic shifts coming this year?
Market diversification will continue to be key to Alaska seafood’s long-term success. The Alaska seafood industry invested heavily in China and became a bit too reliant on the market for reprocessing and market growth. This was exposed in 2018 when tariffs were raised and then exacerbated throughout the pandemic and still continues to this day.
ASMI has been working with the Alaska seafood industry to develop new markets for both reprocessing and consumers. As I mentioned before, this will take time and resources to develop.
However, the price of the US dollar creates challenges abroad. In the near term, ASMI is focusing additional resources and efforts into the US domestic market to drive customer demand and sales.
Alaska just harvested the largest sockeye salmon run on record in Bristol Bay. The unprecedented volume of Alaska sockeye salmon creates an opportunity to introduce more consumers to an incredible product with such a great story.