With the increase in consumers’ attention to the way their foods are produced and the resulting desire for them to be produced in an environmentally friendly, sustainable way without unwanted or harmful ingredients a market for organic products has opened up. Although “organic” has long been mainstream and is considered a global trend it is today still little more than a niche market. What is true of organic products in general is particularly true of organic products from aquaculture for growth of the organic seafood segment is lagging well behind the dynamic development of conventional aquaculture. This is often felt and reported very differently by the media and organic fans but the facts are clear: whilst conventional aquaculture production has risen every year by an average 5 to 7 per cent since 1970 and has in the meantime reached nearly 70 million tonnes (without algae and aquatic plants) production from organic farming is still only around 50,000 to 100,000 tonnes per year. Probably no one knows exactly how much organic fish and seafood is produced since statistics in this segment are meagre. The industry is changing all the time, new organic companies are set up, others quietly turn their backs on their organic farming concept and return to conventional production. And then there are companies that produce to both conventional and organic standards and here the shares of the two fields can vary depending on the market situation. According to the most recent statistically firm estimation, there were just under 250 certified organic aquaculture companies in operation in 2008. Nearly half of them were in Europe.
Europe is the centre of organic aquaculture
There were allegedly 123 certified organic farms in Europe in 2008. Together they accounted for 0.2 per cent of European aquaculture production – which at that time amounted to 2.3 million tons. The “top five” among the organic producer countries were UK, Ireland, Hungary, Greece and France. Together, they were said to have produced between 4,200 and 4,700 tonnes of organic seafood, whereby organic salmon clearly dominated with a share of over 90 per cent of total production. The strong focus on salmon is understandable since the prices paid for organic salmon are 30 to 50 per cent higher on some financially strong European markets. Interest in organic products is highest in France, Germany, Switzerland and UK. In France, organic fish faces tough competition from Label Rouge products that are trusted at least as much as organic products by consumers. Behind the success of the organic segment in Germany are not only specialist organic markets but also discounters, some of whom occasionally or – if the available quantities allow – quite often offer organic fish. A problem of the mostly small-sized organic farms is, however, that the quantities they produce are too low and the processing facilities not sufficient to make the products “attractive” for larger retail chains. Apart from that, the higher cost of organic farming means that the price of the final product is higher, and few retailers want to pay more. With that, a lot of organic producers have to resort to direct marketing locally, and this can be a problem in rural regions where demand for organic products is often lower and people do not have as much money available as city dwellers.
Optimistic growth prospects up to 2030
The statistical records of production volume from organic aquaculture in non-European countries often have much bigger gaps. In the organic scene itself people mostly assume that New Zealand is the biggest producer country outside Europe. Depending on the anticipated market situation between 500 and 800 t organic salmon are said to be farmed there every year. In spite of the so far sobering performance of organic aquaculture, expectations for the industry’s future continue to be high. According to forecasts by the FAO (Organic agriculture, environment and food security, edited by Nadia El-Hage Scialabba and Caroline Hattam, Rome, 2002) worldwide production could rise to 1.2 million tonnes by the year 2030. That is admittedly a much greater volume than we have seen so far but even that would only correspond to an organic share of 0.6 per cent of total production of global aquaculture. Not a fantastic result, particularly since it is assumed that the growth rate of conventional aquaculture will become weaker by 2030. If the FAO forecast for the dissemination of the organic idea is to become reality it would have to spread beyond Europe and evoke enthusiasm in other regions of the world. Not only with regard to production (some companies only produce to organic standards because they hope for better export opportunities) but in respect of demand, too. No one in the numerous food markets in Asia is seriously interested in organic products, and most people don’t even have any idea of what the term “organic” means. If developing countries fail to become more involved in organic production in the future, however, the simulation models for the expansion of the segment will hardly be feasible. It is precisely these countries that contribute more than 90 per cent to global aquaculture production and, compared with that, Europe’s aquaculture production is almost meaningless on a global scale. And this is not likely to change in the foreseeable future, either, for in many parts of Europe aquaculture is going through a phase of paralyzing stagnation.
Problems of understanding: Is organic more than sustainability?
Why is it that the organic philosophy arouses surprisingly little enthusiasm among producers and consumers in many regions of the world? Especially since there isn’t really any producer or supplier who would in principal reject the basic values of this production method. However, for most of them it is enough if they produce sustainably, adhere to the general rules of production, and manage to do without prohibited chemicals and medication. For in the meantime all of that is part of good practice in conventional aquaculture. Whilst the term “organic” is almost meaningless to a lot of people in developing countries nearly everybody in Europe is familiar with it. In spite of that, only very few can define it exactly. The word “organic” is mainly emotionally charged and a lot of Europeans explain the term by describing feelings and perceptions. That is why many people don’t understand why wild fishes from the fishing sector can’t be “organic” or that this term is reserved solely for aquaculture products. One of the basic expectations of organic products from aquaculture is that they should be produced as naturally and ecologically as possible. Animal welfare is just as important as doing without chemicals or – more importantly – without genetically modified components in fish feed. Consumer expectations of seafood from aquaculture are actually in many areas the same as the elementary requirements of the organic sector. It is thus all the more amazing that a lot of organic products have such difficulties on the market and often remain untouched in the fish cabinets at the retailer’s.
Nearly everywhere in the world people are paying more attention to environmental issues and they worry about the possible risks that aquaculture might entail. In spite of that, only a few are in a position to differentiate between certified organic products and products that have been produced sustainably and environmentally compatibly as is recognizable, for example, by the ASC logo. They lack the necessary technical knowledge, which is probably quite a disappointment to certification organisations. Most of them simply assumed that consumers were interested in the origin, path and production standards of the products they eat and that they would thus make sure they had sound information on these issues. However, this does not seem to be working. When deciding for or against a product most customers are guided more by the name of a certification body than by any objective criteria such as production standards. Some associations and organisations clearly enjoy more trust among consumers than others.
Consumer trust is a prerequisite for success
Are consumers simply indifferent or do they have a real problem of understanding? (… Which is certainly nourished by the bewildering flood of organic logos, seals and certificates, and thus by the certification organisations themselves). The confusion is too much for a lot of customers and even professionals can have difficulty differentiating between the specific criteria. In addition, some certifiers bicker among themselves, putting down their competitors’ labels and standards as inferior to their own. The organic industry divides between gold and silver standards, rarely raises a product to premium, and the risk of being degraded as minimal standard is much greater. This kind of nitpicking is for a lot of stakeholders not only irritating but can also lead to consumers’ losing faith in seals and certifications. Anyone who is unaware of what lies behind such jealousies (and that is presumably the majority of customers) soon switches off when such topics are being discussed and subsequently bases their buying decisions on clearer criteria. Near the top of the list is usually the price, which means that organic products will probably have bad cards. It is true that organic products cost more than conventionally produced foods. The feed costs alone are on average 35 to 40 per cent higher, and the additional effort for certification, lower stocking densities and the fees charged for the use of the logo have to be paid for, too. The producer has to spread these additional costs over his products. That is why organic certification organisations should avoid everything that could shed even the slightest doubt on the good organic image because at the end of the day it is always the customer who decides at the fish counter over the success or failure of a concept. Anyone who believes that they can increase the value of their own label by intentionally sowing doubts about competing labels is drilling holes in the boat in which the entire industry sits. And this is particularly true when there are already doubts about the credibility of the organic idea. For a lot of people find it hard to explain the flood of organic products that is suddenly filling the shelves at the discounter and some supermarkets. Especially since a lot of these organic products come from countries that up to now did not stand out for particularly high standards of production. The organic segment has lost its innocence and should avoid everything that might strengthen the emerging scepticism in the concept.
Basic problems recognized but not solved
The well-intentioned objective of the International Federation of Organic Agriculture Movements (IFOAM) to define a generally binding framework for certifiers that would enable comparison of their labels and thus create prerequisites for their mutual acceptance looks more like tinkering with the symptoms than actually getting to the root of the problems. The provisional “IFOAM Standards for Organic Aquaculture” that were adopted in the year 2000 have in the meantime gained the status of fully fledged standards but have in no way succeeded in curbing the ever increasing flood of certification programmes. Although the organic concept did not reach aquaculture until relatively late – around the beginning of the 1990s – there are currently at least two dozen certification organisations in this segment. Most of them are financed privately but in some countries there are national organic labels and in the meantime even multinational guidelines, for example in the EU. This fact already reveals a structural problem in that nearly all certification organisations are located in western industrialized countries within Europe, North America and Australia, and together they do not even produce one tenth of worldwide aquaculture production. The organic standards they define differ not only from organisation to organisation and country to country but also from fish species to fish species and between the individual production stages in the value chain from the hatchery to processing. From an international viewpoint, if there is a common element that the numerous certification programmes share it is undoubtedly their inconsistency.
Organic sea bass for retail and restaurants
Naturally Atlantico, an organic fish farming company from the Canary Islands producing sea bass, is one of the representative of the approximately 125 organic fish farms in Europe. Established in 2011 as a family business, the company is a good example of a successful small-sized farm on the European market, with good perspectives to broaden its market internationally. In 2015 the company expects to produce 200 tonnes organic fish - 80% portion-sized and 20% larger fish up to a kg.
Certified with the European Organic Certification, the company focuses on the customer and the customer’s expectations, rather than the product. The company adheres to all the EU regulations for ecological aquaculture production. As an organic farm, Naturally Atlantico is subject to regular monitoring. Their production is inspected and audited by the Canary Islands Institute of Food Quality (ICCA).
The organic farming based on three main components:
According to Rafael Bernardez, the director of Naturally Atlantico, there is no difference in the time it takes for the organic fish to reach market size. Although the company has only produced four batches, he thinks that the rearing conditions make the fish grow faster than on conventional farms.
Mr Bernardez works mainly with supermarket retailers specialised in organic food. About a tenth of the production goes to restaurants interested in high quality organic food. Naturally Atlantico’s markets are currently mainly in Germany, France, and Mr Bernardez expects to start supplying the UK market in the next couple of months. Although a Spanish company, Mr Bernardez struggles to sell his production in Spain something he attributes to lower awareness about organic food in the country. Outside of Europe, the company exports to Canada and aims to start on the US market before the end of the year.
Explaining complicated issues in understandable language
In Europe, for example, private certifiers such as Krav (Sweden), Debio (Norway), Ernte (Austria), Biosuisse (Switzerland), Soil (UK), QCI (Italy) or Tún (Iceland) offer standards for selected aquaculture species. In Germany, several organisations and associations compete for customers: Bioland, Demeter, Biokreis and Naturland. Since early 2000 there have also been national aquaculture standards in France and the UK. On the other side of the globe the market leaders in the organic business are Biogro (New Zealand), BFA und NASAA (Australia). Since 2001, interested companies in Australia can also have themselves certified according to national organic standards. One of the few providers of organic standards in Asia is the private Organisation ACT (Thailand) that mainly concentrates on shrimp, the most valuable product in international seafood trade. Developments in the organic field in the USA proved particularly difficult. The US National Organic Standards Board (NOSB) which was given responsibility for this segment by the Department of Agriculture (USDA) only managed to present general standards for organic aquaculture in 2008 after eight years of tough and controversial discussions. A central point of contention was the feed used in aquaculture, especially feed for carnivorous fish species. The different stakeholders agreed relatively quickly on binding organic standards for herbivorous species such as tilapia, carp fishes, shellfish and crustaceans. But for all other species whose feed contains a share of fishmeal a relatively complicated regulatory system with seven-year transitional periods to organic or sustainably produced fishmeal, permissible maximum concentrations of fishmeal in feed, and further requirements (e.g. reduction of water pollution during farming in net cages, dioxin and mercury residues through fishmeal feeding) was devised. Whether fish farmers, scientists or responsible politicians, conservationists, animal rights or consumer protection activists, nearly every party involved in the discussion process at the NOSB tried to anchor their interests and concerns within the organic standards. The final outcome was a highly complex, convoluted legal document that hardly offers any orientation to the man in the street. At least as long as he feels little inclination to look seriously into the material.
The costs behind certifications and private standards
Not only is the existence of multiple certifications and private standards a challenge for organic fish farmers, but so are the costs. Retailers and commercial brand owners are the main drivers of private food standards. As they are the primary distributors of fish and seafood products, most retailers move away from open markets towards contractual supply relationships, which leads to the increased dependence of the fish farmers and processors on the retailers. Consequently, the influence of the supermarket chains on the market results in an unequal distribution of certification costs across the supply chain. The FAO report from 2011, “Private Standards and certification in fisheries and aquaculture – Current practice and emerging issues”, states that the compliance with private standards and certification is a large financial expense for fish farmers and they carry the main cost burden. Both producers and processors take a significant share of the costs of certification, whereas the retailers gain the most benefits. For retailers, any costs involved in developing private standards are seen as an investment. The certification requirements for producers and processors are usually used by retailers, for example, as a reputation enhancement or a marketing tool to improve customer confidence in sustainability, traceability, safety, and quality assurance. Moreover, the certifications are used by retailers as a tool to strengthen the commitment between them and their suppliers.
When it comes to the costs for fish farmers and processors, they can depend on the size of the company, the type of operation, and the differences between the required practices and infrastructures to comply with the standards, compared with the actual status of the company. In fact, most of the main costs for producers and processors emerge from the latter. Despite the financial burden, a trend towards increasingly seeking certification for multiple standards by fish farmers can be observed in recent years. This is due to the fact that both producers and processors acknowledge the benefits of certification and private standards. Seeking certification leads to improved quality of their products. Admittedly, it is not only retailers that benefit from certification but also the fish farmers and processors. Through certification, producers can receive long-term contracts, strengthen their positions on existing markets and gain access to new niche markets.
Broad international range of organic standards
In Canada, the organic standards proposed by the General Standards Board (CGSB) were harshly criticised because they did not explicitly prohibit the use of antibiotics and chemicals and allowed up to 20 per cent non-organic feed and net cages in the open sea. The waves of tension ran high for with these propositions organic aquaculture would contribute to marine pollution and genetic impact on wild stocks through escapes. The very opposite was the case across the Atlantic in Denmark where strict national legislation with rigid rules and regulations make life difficult for trout farmers and the further development of organic farming a real challenge. Organic is not always the same, particularly in international comparison.
Already in 2007, so several years previously, the EU had set the goals, principles and general requirements for organic production of agricultural products, for the first time including aquaculture, with regulation (EC) No. 834/2007. Since 2010 EU Regulation 710/2009 has also been in force. This aims at uniting the various organic standards and national certification programmes in Europe under one umbrella. It defines criteria for the separation of organic and non-organic production units, lays down concrete measures for animal protection, and defines maximum stocking densities for important animal species. This EU legislation package is welcomed by many for whom the muddle of organic standards and certificates in Europe had long been a source of annoyance. Perhaps some certification organisations are less happy with it since with the umbrella guidelines and the EU organic seal come fears of the loss of potential customers and thus earnings. Although on the face of things some welcomed the EU measures, their praise was not quite sincere. They say the EU regulations are good, but don’t go far enough, their own are much better. And once again it is the consumer who will have to work out what all this bickering is about. If so many varieties of organic are possible, which is really the best?
Admittedly, definition and laying down of requirements and standards that are necessary for the production of organic products is not easy. Especially in aquaculture where different species are produced using some very different methods. Nevertheless, framework conditions have to be worded in such a way that they are understandable and logical for laymen and less deeply informed consumers. Because only those who understand what a lot of effort goes into farming organic products will ultimately be prepared to pay the correspondingly higher prices. Trust comes with transparency – and that begins with the formulation of standards.