The market analyst and seafood consultant from Lexington, Mass., told community leaders from Southwest Alaska cities meeting at Anchorage Jan. 26 that aquaculture must be part of the picture, in the face of growing global demands for seafood and growing efficiency in fish farming.

“If I was a rural Alaska community concerned about long-term viability, I would like to have aquaculture to supplement (wild seafood),” he said.

Sackton, who operates the largest daily seafood news service in North America, said he realized that aquaculture is a controversial subject in Alaska. Still, he said, among the world's major seafood producing regions, only Alaska and Russia are not seeing huge growth in aquaculture. Meanwhile, Norway, Iceland, New Zealand, China, Thailand, Vietnam, Chile and Canada all have significant aquaculture production, as well as wild fish production, he said.

Aquaculture will come to dominate the global seafood supply, and Alaska must have a pro-active approach to fish farming, along with a defensive strategy to maintain its position in the world's seafood supply chain, he said. Sackton said he felt aquaculture in the state would not undermine the markets for wild Alaska fish.

Sackton's advice to participants in the Southwest Alaska Economic Summit, an annual event organized by the Southwest Alaska Municipal Conference, was to support consolidation among major processing players, like Trident Seafoods and large Japanese corporations like Maruha, while continuing to promote the wild Alaska products consumers prefer.

Seafood has always been a global commodity, and Alaska was developed in part for its seafood resources, particularly in halibut and salmon, he said. Now the balance of power between producing and consuming regions has changed, and Alaska can no longer expect to set the price for its own seafood, he said.

According to Sackton, the single most important factor changing the seafood industry is the growth of aquaculture. Consolidation among buyers and processors is also having major impact, as global sourcing reduces the importance of producing regions, he said.

Increased consumer demand has boosted the price of seafood, with high prices for crab, salmon, cod and halibut, he said. The factors behind that expanded demand range from a bird flu scare in Europe that increased demand for seafood, including ready-to-eat meals, to increased publicity about the health benefits of seafood, and a growing retail interest in seafood products, he said.

Along with increased demand for seafood has come exponential growth trends in aquaculture, from finfish to crustaceans, Sackton said. As the aquaculture industry progresses, there is more efficiency in production and consolidation of markets, he said.

Alaska is certainly feeling the impact of aquaculture, Sackton said. Wild salmon still appeals to a large, but niche market, while major buyers, like the Japanese, are also buying Chilean coho salmon. There has also been a huge expansion in the growth of farmed cod and halibut, he said.

Major buyers, like Wal-Mart, Costco, Carrefour and Royal Ahold, have forced sellers to consolidate, he said. In fact, Carrefour, a major European retailer that recently opened its 90th store in China, entered into an agreement in December to acquire Ahold Polska, making Carrefour the No. 2 Polish food retail market. Royal Ahold, based in the Netherlands, is an international group of supermarkets and food service operators in the United States and Europe.

The need to consolidate is based on companies' need to be bigger to protect their margins by meeting major customers' demands for greater efficiency and lower prices, he said. Larger companies have global sourcing opportunities, the ability to target different markets and to manufacture in different locations. An example, Sackton said, is some processing of Alaska wild salmon and crab in China.

Seafood sellers need to consolidate to be able to effectively sell to retailers, he said. Retailers, meanwhile, need consistent supply and are always comparing seafood to other products they can sell for more profit.

When seafood prices get too high, retailers will abandon the product, as they did in late 2005 when the price of some crab rose to more than $4 a pound in U.S. and Japanese markets. The result was a huge amount of unsold crab, until Alaska sellers decided to sell for whatever price they could get, he said. The lower prices cleared out inventory and brought back retail buyers, subsequently helping to firm up market prices, he said.