Projections from McKinsey reveal a concerning trend in the seafood industry: a 14% growth in demand by 2030 compared to 2020 levels. This surge in demand is primarily driven by markets in Asia, Latin America, Europe, and Oceania, with many of them being newly developed. However, the supply of seafood is struggling to keep up, as more than 85% of the world’s fisheries are already “pushed beyond their limits.”
The research highlights the regulatory constraints as a significant factor contributing to the looming seafood shortage. In many regions, existing fishing licenses are limited to ensure the sustainable management of fisheries. This scarcity of new quotas hampers the industry’s ability to meet the growing demand. While these restrictions aim to promote sustainable fish farming practices, they inadvertently contribute to the supply shortage.
Interestingly, alternative seafood products, such as plant-based and cultivated options, offer a potential solution to this problem. Unlike traditional fish farming, these products are not subject to the same regulatory constraints. Plant-based seafood products have been on the market for years and have already generated approximately $14 million in retail sales in the US alone. These products use generally recognized as safe (GRAS) ingredients and do not require premarket approval to launch.
Cultivated seafood products, on the other hand, face a different set of challenges. Despite the existence of a regulatory pathway in the US and some other regions, no cultivated fish company has received approval to sell to consumers. The process of harvesting fish cells and cultivating them in bioreactors is relatively new and unproven at scale. Therefore, it will take time for these products to reach the market, even with regulatory approval.
In addition to regulatory hurdles, alt-fish startups must also address other challenges faced by the alternative protein sector. Price, taste, texture, and nutrient content are all crucial factors that can influence consumer acceptance. McKinsey emphasizes the importance of branding and marketing strategies in effectively communicating the value proposition of these products to consumers. Drawing lessons from the alt-meat sector, where companies have struggled to resonate with customers, alt-seafood startups must identify their target core consumers and develop messages that truly connect with them.
The implications of the McKinsey report are significant for the seafood industry and consumers alike. The projected growth in demand coupled with the limitations on fishing licenses and the strain on wild-caught seafood highlight the urgent need for innovative solutions. Alternative seafood products offer a promising avenue for scaling production and meeting the rising demand. However, the industry must overcome regulatory, technological, and consumer acceptance challenges to ensure a sustainable and accessible seafood supply in the future.
In conclusion, the seafood industry is facing a looming shortage driven by increasing demand and regulatory constraints. Alternative seafood products, such as plant-based and cultivated options, have the potential to alleviate this shortage. However, the industry must navigate regulatory hurdles and address consumer preferences to successfully meet the rising demand for seafood in the coming years.