Outsourcing: how does domestic aquaculture compete? 

Senior Biologist and Certified Fisheries Professional
Fisheries Technology Associates, Inc.

The political season is coming to a close, and a few key issues seem to have captured the moment. One of those issues, of course, is war. The other is outsourcing. Outsourcing is the newest buzz word in a political debate that will dominate the landscape, I dare say, for many years to come. Outsourcing is not new, particularly to the U.S. manufacturing sector, where formerly high-paying jobs have moved offshore to places where plentiful labor is available at a much lower cost.

This trend is not restricted to manufacturing. Production of all types, including aquaculture which can be labor intensive, and most recently technical services sectors, are experiencing shifts in the way business is conducted. Thanks to the information revolution and the ability to communicate and transport quickly and inexpensively, we are no longer chained to borders. In an aquaculture business environment here in the U.S. that is rife with burdensome regulations and societal pressures (namely, the NIMBY [not in my backyard] Syndrome), it’s no wonder that we satisfy our demand for fisheries products from overseas farms.

In some ways, outsourcing is good. Outsourcing holds down the prices we pay for the aquacultured products we consume. In a commodity-based economy—in other words, in an economy where price drives demand as opposed to quality or brand recognition—the group of producers or region capable of producing a product for the least cost will dominate the marketplace. Usually, price is king. In short, outsourcing keeps more of the consumers’ money in their pockets, and that’s not a bad thing.

On the other hand and for many obvious reasons, I hazard to guess that most of us (me included) would rather see production based here in the U.S. For other reasons that are not so obvious or self-serving, I suggest that we all treat this issue with a bit more urgency.

As a nation, we are becoming more and more dependent on foreign aquaculture production. In a manner similar to that of petroleum, I view this as a security issue. We have seen what can happen when dependence on imports gets out of hand. Indeed, our trade deficit in fisheries products is second only to petroleum! That’s saying a lot, and should serve as a warning.

In a politically and culturally harmonious world, we would be less concerned about aquaculture outsourcing. Our dependence on imports would not be used as an economic weapon against us. However, in the real world, we see our economic vulnerabilities exposed—for example, we all "feel" the rising prices of fuels, and we understand the potential consequences to our economic well-being. The same scenario may become true for our supplies of fish.

Economies have a way of sorting themselves out, despite the efforts of politicians, trade negotiators, and regulators. My crystal ball tells me that the future of aquaculture in the U.S. lies in our ability to create distinctions, create new and "higher-quality" demand, solidify market positions, and continue to find new ways to increase value and productivity. At the heart of all of this lies two words: marketing and invention. Marketing and invention (i.e., innovation) are what Americans do best. We can sell refrigerators to penguins. Build a better mousetrap? You’ve come to the right place.

In my view, invention and innovation must come first. We must produce higher-quality and higher-value products, do it with fewer natural resources, and with a more highly skilled and paid (but smaller) workforce. This will involve paying meticulous attention to product purity and freshness—qualities that, for the most part, will be lost on the high-volume, commoditized imported fare—and in highly efficient production facilities that may not yet exist. Then, here’s where highly skilled marketing comes into play.

Domestically produced products will be distinctive. Quality differences will be real and therefore worthy of a higher price at the seafood counter. In this new reality, branding is everything. The best tilapia won’t be called tilapia. It will have a thoroughly recognizable brand name. How did a facial tissue come to be known as a Kleenex? Marketing. How did cotton swabs come to be known as Q-Tips? Marketing. We’ve taken some steps with branding—particularly with catfish, trout, and striped bass. But we must make a much larger quantum leap forward. Brands and their associated qualities must become household words.

The highest-quality and highest value aquacultured products will be produced here in the U.S. in highly efficient, relatively compact (more highly intensive), technically sophisticated, and environmentally friendly facilities. New species and product forms will be our strong suit. Sure, the imported commoditized products will capture their share of the market. However, we will cater to a different and more discriminating and economically affluent and knowledgeable clientele at prices that are acceptable to them and allow us to maintain reasonable or even exceptional profitability. We will produce the "new models," the Lexus, and Mercedes-Benz of fishes. Until we stop clinging to old ways and old thinking, other nations will more successfully produce the Toyotas and Dodges.

Relative to many species, we may not now be able to compete on price. But, I am convinced that we can use ingenuity and our strengths to our collective advantage and regain market share, and reduce our dependence on imports.

Aquaculture in the U.S. must not simply die because it is out-competed by foreign competition or regulated into oblivion. In a real sense, our national security depends on us.