- Projections show a 14% growth in seafood demand by 2030 versus 2020 levels, according to new research from McKinsey.
- More than 85% of the world’s fisheries are “pushed beyond their limits,” with amounts of wild-caught seafood flat and aquaculture unable to keep pace with demand.
- Markets — many of them newly developed — in Asia, Latin America, Europe and Oceania, are primarily driving demand; regulatory restrictions hamper growth.
Why it matters
Regulatory constraints — particularly those around new fish farming licenses — drive the lack of supply that’s causing this “looming seafood shortage,” according to McKinsey.
“To achieve well-managed fisheries, many regions have limited existing fishing licenses, which has made new quotas a scarce resource,” the research notes. Some of these restrictions are enacted to ensure more sustainable fish farming.
One of the upsides of alternative seafood is that the sector doesn’t face the same restrictions, since products are typically created in the lab, not on a farm. Theoretically, this makes them “one option for scaling production.”
Plant-based seafood products have been in the market for years and currently do about $14 million in retail sales in the US, according to the report. Products normally use GRAS (generally recognized as safe) ingredients and don’t need premarket approval to launch.
Cultivated products are another matter. No cultivated fish company anywhere in the world has yet received regulatory approval to sell to consumers. The process (harvesting fish cells and cultivating them in bioreactors) is fairly new in the food world and not yet proven at scale, so these products will not hit the market overnight, despite there now being a regulatory pathway in the US and some other regions.
Regulatory matters aside, alt-fish startups must overcome similar challenges faced by the rest of the alt-protein sector: price, taste and texture, and nutrient content in products.
“Once these products are more established in the market, it remains to be seen how consumers will respond, and how products continue to develop accordingly,” says McKinsey.
Much of that will come down to how startups are branding and marketing products to consumers. This is perhaps the biggest place alt-seafood can learn lessons from the alt-meat sector, where many companies have struggled to communicate their value proposition to customers.
As the report notes, “the industry still must work to identify target core consumers and develop messages that resonate with them.”