Don Kelley, procurement manager at Western Edge Seafood in Claysville, Pa., says the consistent popularity of tilapia is largely supply-chain driven. “We have a species with all the availability and year-round consistency of an aquaculture product at a price point that is attractive,” he says. “We’re talking a $2 fish here. It’s hard to find a similar species.”
Because of that, he says, tilapia continues to be a core product for Western Edge, even as the company expands into other species.
Although farmed fish can certainly have some ups and downs, especially when impacted by weather or disease, Kelley says this year in particular has been smooth sailing for tilapia. “We saw very little impact of disease this year,” he says, which has helped keep supply at stable to abundant levels.
Disease, explains Kelley, is usually linked to weather, such as typhoons, rising water temperatures and genetics. With no major typhoons in China this year,
thankfully that part of the equation was missing.
Stable supply
Western Edge sources its tilapia from China, where there has been stable supply, he says, but with some tightening as some farms have converted to producing other species of fish or turned to shrimp to meet local demand.
“But we’re still able to buy all that we need,” says Kelley.
China was by far the largest supplier of frozen tilapia fillets to the U.S. market in 2011, exporting more than 261 million pounds to the United States, although that was down from 2010 by 37 million pounds. Indonesia was the second-biggest supplier of frozen fillets to the U.S. market with just more than 20 million pounds in 2011. On the fresh side, Honduras surpassed Ecuador in 2011, with a total of nearly 18 million pounds of fillets exported to the U.S. market versus 16.8 million pounds.
Regal Springs Tilapia, with headquarters in Miramar, Fla., has been growing at a rate of about 10 percent a year, says Jim Bruffy, director of sales and marketing. The “egg to plate” vertically integrated operator has farms and processing plants for frozen product in Java and Sumatra in Indonesia as well as a fresh tilapia operation in Honduras and its newest site in Mexico, which has recently started producing both fresh and frozen fish. Together, the operations produce about 1 million fillets per week, says Bruffy.
In creating its tilapia business, Bruffy says Regal Springs has focused on providing fish that avoid the negatives associated with farmed fish, such as off taste or disease issues.
The fish are raised in open cages and eat only antibiotic and hormone-free feed, says Bruffy. The newest site in Mexico has allowed the company to refine its process, he says, with the production facility just 15 minutes from the processing plant, allowing them to keep the fish in water until they are harvested. A laser detection system on the production line can detect pin bones and bloodspots, while a computerized grading system provides more accuracy on sizing. A new salt-free ice flushing system is also employed to get fish to their core temperature faster without comprising quality.
The Mexico plant adds about 400 to 500 employees to the 6,500 already working for Regal Springs, says Bruffy. As in its other locales, the Mexico operation provides education and medical care for employees as part of its sustainability mission, says Bruffy. “We’re about providing them with ways to sustain themselves and be our partners,” he says.
In addition to assisting its associates, Bruffy says Regal Springs has developed programs to recycle the various aspects of tilapia production, from selling scales to the cosmetics industry to using fish oil for biodiesel to creating fishmeal for use in poultry and livestock feed.
Value and versatility
Bruffy says tilapia is popular because “it’s a fish that doesn’t taste like fish,” meaning its mild taste appeals to even marginal fish eaters. Also appealing is its white, flaky, meaty texture and its price, which puts it below similar species such as grouper or mahimahi.
About 60 percent of Regal Springs’ business is frozen tilapia, which Bruffy says sells for $1.50 to $3 a pound, based on size. Meanwhile, fresh is more in the $4 range.
In the early part of the year, Western Edge’s Kelley says prices were very near production costs, which pushed some farmers to look to other, more profitable species. The cost of fishmeal has risen, he says, as the price of grain commodities has increased. Additionally, Kelley says there has been some overbuilding in aquaculture, so now there is some natural regression within the marketplace.
High Liner Foods buys a lot of tilapia, says Keith Decker, COO. “It’s our No. 4 species,” after pollock, cod and haddock, he says, and is used in all channels, but especially casual/family dining and retail.
The benefits of tilapia are its consistent supply and price. Still, notes Decker, the species could face some challenges as input costs continue to rise and competition from wild fish and farmed pangasius heightens.
“We’ll see a lot of wild and pangasius coming into the market,” he says, adding that pangasius import numbers continue to climb.
But even with the availability of cheaper pangasius, which is selling for around $1.10 to $1.20 a pound, that species hasn’t caught on with consumers the way tilapia has. “There’s a lot of tilapia on the menu and it’s front and center with consumers,” Decker says. Until pangasius, which also goes by swai and some other names, solves its marketing issues, tilapia will still be one of High Liner’s featured fish.
Decker likes tilapia because it takes well to flavors and coatings, which is how the company continues to feature it as it develops new products. “We’ll put out more in our FireRoasters line,” says Decker, who also noted expansion of tilapia in its UpperCrust and Pan-Sear offerings.
Among Western Edge’s customers, especially for retailers, the 3- to 5-ounce size is the most requested. “We like to say China is typically a 3- to 5-ounce economy,” says Kelley, and demand has accommodated itself to that. Retailers are looking at what provides the greatest cost benefit, he says, while on the foodservice side, choices are more culinary-driven.
Western Edge has been successful with some customized farming for larger sizes, with about 30 percent of supply in the 5-ounce or larger category.
“If you are culinary-driven and want plate coverage and a larger, meatier fish, then you’re probably looking in the 7-ounce range,” he says.
Drew Sherrill, executive chef for The Blue Star Group, which operates three restaurants in Colorado Springs, Colo., recently added tilapia to the menu at La’au’s Taco Shop. In November, the restaurant began offering tilapia tacos as an alternative to the mahimahi already on the menu.
Sherrill says as mahimahi prices have crept up, and with the availability of farmed tilapia from Colorado, the decision was made to add the species. Sherrill hopes tilapia will become a permanent part of the taco shop’s menu.
“We like it as an alternative to mahimahi,” says Sherrill, “and it syncs well with the other flavors on our menu.” He says while the plan is to source the fish locally, he would consider purchasing farmed tilapia from more traditional sources, such as the Pacific Rim.
As way of introduction to its customers, La’au’s offered three tilapia tacos with chips for $5 during a two-week promotional period. The fish is prepared in a chili marinade, says Sherrill, and topped with napa cabbage, corn and ahi de peru, a celery-based salsa.
While Nosh, another Blue Star Group restaurant, has a set menu that doesn’t lend itself to tilapia, Sherrill says he has offered tilapia at The Blue Star as well on a rotating basis.
