The seafood industry in the US Midwest was turned upside down during the COVID-19 pandemic and is now coming back structured differently than it was before 2019.
Like the rest of America’s seafood industry, midtown seafood farmers, traders and vendors faced an existential challenge when COVID-19 first hit the country in start of 2020, forcing almost all companies – big and small – to make drastic changes to their operating models to stay solvent.
Safety concerns and lockdowns combined with a major shift from restaurant and wholesale to retail have forced players in the Midwest seafood industry to adapt or perish. In 2021, companies then had to deal with transport difficulties, supply chain interruptions and rising prices. Many have survived thanks to government support programs, although seafood sectors in US coastal states have received additional benefits through the CARES Act.
Lauren Jescovitch, fisheries and aquaculture extension educator for Michigan Sea Grant, said some businesses have been able to thrive during the pandemic as seafood retail sales have soared, while others have barely managed to stay afloat, and some were forced to fall back. In 2020, 248 companies held seafood processing licenses in Michigan, while in June 2022, only 233 remained. Jescovitch said Michigan’s seafood processing industry is now “just a different world” than before the pandemic, with a rift forming between businesses that opened earlier in the pandemic and those that waited to open, either due to market uncertainty or security reasons.
“Those are the places that have a harder time coming back,” Jescovitch said. “Those who stayed open with extra precautions took a risk and got away with it.”
Jescovitch says MiBiz most seafood companies in Michigan have shifted their operations to focus on retail, going from 80% of wholesale sales to 20% at retail to a reversal of that in 2022, with 80% of sales at the detail now. Even seafood processors have branched out into retail, opening storefront markets, with some installing drive-through windows.
In response to supply chain challenges, many seafood companies in the Midwest have sought more local seafood options. Fishmongers of Michigan, based in Grand Rapids, Michigan, USA, was founded in 2016 on a business model of importing seafood from Asia and South America and selling to restaurants and wholesalers local, but shifted to more local and regional sourcing in the wake of the COVID-19 pandemic, according to MiBiz. Fishmongers of Michigan co-owner Louis Hamper said the pandemic has led more Michigan seafood processors to source locally and focus on local sales, as his company has done by focusing in the independent grocery market.
“It was a good thing for us to focus more on those networks,” Hamper said. “That’s pretty much how we weathered the storm. We pivoted very quickly and were very lucky.
Caplinger’s Fresh Catch Seafood, based in Indianapolis, Indiana, has decided to go even more local in 2021, making the decision to raise its own catfish after suffering frequent shortages. Owner Andrew Caplinger said catfish is one of the most popular items his restaurant group sells – accounting for 800 to 1,000 pounds served a week. He hopes to raise about 500 pounds of this catfish from his own farm in southern Indiana.
“I’ve never done anything like this – I’ve sold dead fish all my life,” he said. “It’s difficult, and it can be risky. But assuming things go well and these fish grow as they should, we won’t have to consider raising our store prices again for some time.
Caplinger’s foray into fish farming is an exception to the declining size of the aquaculture industry in the Midwest, a trend that has accelerated during the pandemic. The number of aquaculture farms in the Midwest fell to 271 from 336 in 2010, according to the Associated Pressand the region accounts for only one-third of US fish farms, despite making up one-fifth of the country’s landmass.
Mike Searcy, owner White Creek Farms in Seymour, Indiana, said the biggest challenge he faced was finding processing capacity for the trout he raised. While Searcy sends its fish to be processed in the neighboring state of Kentucky, other aquaculture operations have only one market for their fish – Asian food markets, where the fish are sold alive. In response, Searcy is also considering adding a processing facility to its farm.
“We have demand from our local customers, but the biggest hurdle is the lack of processing – bridging that gap between farmer and restaurateur. It’s holding us back,” Searcy said. “When we’re competing with foreign markets and much cheaper labor, they can net groceries much cheaper than I can.”
Both Searcy and Hamper said a labor shortage — a problem across the United States — has also emerged as a significant impediment to their growth.
“After going through that initial change, we continued to grow,” Hamper said. “We’re in a growth phase right now and it’s really hard to get people to work.”
Joseph Morris, the former director of Iowa State University’s North Central Regional Aquaculture Center, said shopping patterns show consumers in the Midwest are eating more seafood, reflecting an increase in consumption rates. of seafood in the United States, which opens an opportunity for local seafood suppliers.
“The big hurdle to overcome – how can they produce a product, cost-effectively, to meet consumer needs while remaining in business?” he said. “How do you reach the growing market of people who want to eat fish?”
One solution sought by both small and large operations is land-based aquaculture, including recirculating aquaculture systems. Searcy uses such a system for its farming, and larger companies like AquaBounty, Superior Fresh, NaturalShrimp, TruShrimp and others are in various stages of constructing land-based seafood farming facilities throughout the region.
Farming fish in the United States will also be a more expensive proposition than importing it from overseas, where labor is cheaper, but with global seafood consumption expected to increase by 100 to 170 billion pounds by 2030, farmers in the Midwest have an opportunity to meet demand, according to Amy Shambach, aquaculture marketing outreach associate with Illinois-Indiana Sea Grant.
The key will be a successful marketing effort and proof to customers that there is a noticeable difference between cheaper imports and locally raised fish, Morris said.
“In terms of aquaculture in the Midwest as a whole, growth has to be tied to the exploitation of food fish. That’s where your market is – a consumer base,” Morris said. “There are consumers who want to eat more and more fish in the Midwest. We have to focus on that. A new generation of people are eating more fish and asking more often, “Where does my food come from?” This is where the Midwest comes in.
Photo courtesy of Purdue Extension Aquaculture Research Lab