If the seafood world put out a list of its rising stars, Argentine red shrimp might top that list.
Advances in harvesting techniques, processing, and management have helped grow the sector's landings, allowing expansion and further penetration into markets around the world, but most prominently, China and the United States.
Furthermore, since the species has a relatively short reproduction cycle – fully reproducing in 12 to 16 months – the industry has managed to harvest it without depleting resources over the years. In other words, there is a degree of natural sustainability to how the industry has operated, reinforced by government regulations and two fishery improvement projects (FIPs).
Matt Fass, the president of Newport News, Virginia, U.S.A.-based Maritime Products International, told SeafoodSource that his company’s experience with Argentine red shrimp goes back decades at the office of his multigenerational firm. For his father, it was not a product that deserved much attention. Seen as a mushier, less desirable product compared to other shrimp species, there are still many in the industry that have a dim view of its culinary characteristics. But those old hands may be missing the boat, Fass said.
There have been significant improvements in its quality, and Fass said that when properly harvested and processed, Argentine red shrimp is a truly unique item. What helps set the product apart, he said, are the small-scale, artisan fishers who have been harvesting it in Atlantic waters for several generation. This combines with the potential to be well presented as a product that can remind consumers of a lobster.
“It’s a beautiful product, it’s a fascinating fishery. Very old school – an artisan niche fishery,” Fass said.
A varied production base
Some of the remaining stigma around Argentine red shrimp has to do with the wide range of quality coming out of Argentina, Fass said. This can make the product confusing to retailers and consumers.
For Maritime, which processes all of its Argentine red shrimp products in Argentina and then sells to its customers in the United States, Fass stressed that the quality of the finished product is highly dependent on the capability of each individual producer. In the case of Maritime, the firm works exclusively with one Argentine producer, Grupo Veraz, which has two plants certified for full shrimp processing.
The commercial director of Grupo Veraz, Federico Angeleri, told SeafoodSource that part of the range buyers see in quality is due to the high volumes of shrimp that can be caught in a short period of time – as many as 18 MT of shrimp can be hauled in through one 12-hour workday. So the management of the catch is crucial to ensure the product starts the processing chain correctly, Angeleri said.
The fact that there is a large participation of small and independent fishers, while giving the product a unique story, also brings about challenges, Fass pointed out. There is also a large gap in the quality and scope of infrastructure between one producer to the next.
“Some [producers] have to take the catch seven hours to a plant and some have a BRC-certified plant within minutes,” Fass said.
In general, the industry has been pushing to prove its sustainability and improve the quality across the board. The nonprofit Center for Development and Sustainable Fisheries (CeDePesca) has been active in organizing seminars and creating opportunities for the industry and producers to discuss improvements for the industry.
Through its FIPs, the entity has also been advancing greater certification for the industry. The most recent meetings occurred in September 2017, bringing together Argentine authorities, industry representatives, and foreign importers of the product. According to a CeDePesca press release, these efforts have helped recovery research programs to manage the resource and protect against overproduction.
The buyers and new demand
Global demand for Argentine red shrimp has been increasing steadily over the last 10 years. For example, Fass said that the U.S. market only imported around 200 MT of Argentine red shrimp in 2011, but direct imports from Argentina to the United States grew to 4,500 MT in 2016.
Going back 10 years ago, the largest buyer of the product was Spain, and the industry’s landings were around 50,000 MT. This started to change dramatically in 2007, at which landings started to increase around 15 percent per year on average, Veraz’s Angeleri estimated. But the receiving markets were undeveloped, with too much shrimp flooding Europe and driving the price down, he said.
The U.S. market served as an attractive alternative to companies like Grupo Veraz. It provided a new source of clients, and an option to circumvent the dominant Spanish players who were present in the production, processing, and distribution of the product.
China has been another important source of growth for the industry. While much of this is for processing and resale abroad, Fass added that the domestic Chinese market is also improving for the product.
In the United States, Maritime Products International sells to a mix of both retail and food service buyers. Regarding format popularity, there is a solid split between headless-shell on and peeled/de-veined. Fass said now that Argentine red shrimp is well-known and even sought after in the United States, his company’s next goal is to increase sales of head-on formats. The Argentine red shrimp should be marketed as a complement to traditional shrimp products and species, he said – not seen as a true competitor.
Prices rise along with demand
One of the consequences of having more independent boats involved in the fishery is that prices tend to climb higher at a faster rate. This also adds to labor challenges and costs, which Angeleri said are the main concerns for Argentine producers.
Fass added that these higher costs at the production level can also complicate the rest of the supply chain, especially those who buy the shrimp and reprocess them outside of Argentina for resale.
Gus Michelena, sourcing manager for Miami, Florida, U.S.A.-based Camanchaca, with growing interest from large retail companies like Publix Super Markets, which added Argentine red shrimp to its product mix in 2016, average prices have risen by as much as USD 1.00 (EUR 0.84) per pound. As a result, Camanchaca was seeing average prices of USD 7.00 (EUR 6.51) per pound for peeled and deveined shrimp, wholesale for foodservice, Michelena told SeafoodSource at the 2017 Seafood Expo North America.
“Supply has been pretty consistent, but demand is going up and prices are going up,” Michelena said.
Improvements in infrastructure – a welcome development for the supply chain – have also pushed up costs and prices. However, even though the species has been managed well, Fass said that it is still necessary to prove this sustainability to consumers and the supply chain through formal certifications, another costly expense. The FIP covering the onshore fishery was created in 2015, and in March, CeDePesca announced the launch of the FIP covering offshore fishing of Argentine red shrimp, with the goal of eventually seeing both fisheries certified as sustainable by the Marine Stewardship Council.
"All major players in this fishery are involved with the FIP,” CeDePesca Chair Ernesto Godelman said. “The offshore (frozen-on-board) fleet is responsible for 70 to 80 percent of Argentine red shrimp landings and the FIP partners are making most of it, so we are really confident that this support will be key to get the necessary reforms to have this fishery MSC-certifiable within a very reasonable term.”
But in Argentina, there’s ongoing debate about who should pay the bill for these sorts of improvements, Fass said, as everyone involved in the fishery considers them important, but not all companies are as focused on sustainability and certification. Some are riding on the coattails of the rest of the industry, he said.
2017 outlook
The 2017 inshore season is underway and will run through early 2018. Angeleri said he expects that when the final catch numbers for calendar year 2017 are calculated, the total catch for the inshore and offshore seasons will sit at record numbers. The executive expects total landings to increase around 25 percent over 2016, and come in around 220,000 MT. Considering an industry focus on the headless product, this will amount to around 170,000 MT of exported product.
Even with supply increasing, the exponentially increasing demand for Argentine red shrimp has brought concern that its cost could accelerate past the comfortable price point of its buyers.
“Prices are going higher, although if you drew a chart and started seven or eight years ago, it is still lower than what it was,” Fass said.
Even with a heftier price tag, Argentine red shrimp still represent a great buy, Fass said.
Argentine red shrimp represent “A fantastic value for what can be just a beautiful and high-quality, wild-caught product that has been embraced by many consumers.”
