Market Analysis – 10171503 – Fish meal

Market Analysis Brief: Fish Meal (UNSPSC 10171503)

1. Executive Summary

The global fish meal market is valued at est. $11.2 billion in 2024, driven primarily by the expanding aquaculture industry. The market is projected to grow at a 4.8% CAGR over the next five years, reaching over $14 billion by 2029. The single most significant threat to the category is the high volatility of raw material supply, which is subject to climatic events like El Niño and stringent fishing quotas, creating intense price pressure and driving interest in protein alternatives.

2. Market Size & Growth

The Total Addressable Market (TAM) for fish meal is substantial and directly correlated with global demand for aquafeed and specialty animal feeds. Growth is steady, but supply-side constraints prevent more aggressive expansion. The three largest geographic markets are 1. China (as the largest consumer and importer), 2. Peru (as the largest producer and exporter), and 3. Norway.

3. Key Drivers & Constraints

1. Demand Driver (Aquaculture Growth): The aquaculture industry, which consumes over 65% of global fish meal production, is the primary demand driver. Growth in farmed salmon, shrimp, and tilapia production directly increases the need for high-protein aquafeed.
2. Supply Constraint (Catch Quotas): Supply is fundamentally capped by government-regulated fishing quotas, particularly for Peruvian anchoveta. These quotas are frequently adjusted based on biomass surveys and climate conditions, creating significant supply uncertainty. [Source - IMARPE, 2023]
3. Cost Driver (Energy & Logistics): Energy-intensive drying and grinding processes, coupled with volatile global freight rates, represent major cost inputs. Fluctuations in these areas directly impact final product pricing.
4. ESG Constraint (Sustainability Pressure): Increasing scrutiny from NGOs, regulators, and consumers over marine ecosystem health is driving demand for certified sustainable and traceable fish meal (e.g., MarinTrust, MSC). This adds cost and complexity but is becoming a prerequisite for market access.
5. Competitive Threat (Alternative Proteins): The development of viable protein alternatives—including soy, insect meal, and single-cell proteins (SCPs)—is a significant long-term threat. These alternatives are gaining traction as a way to mitigate price volatility and improve the sustainability profile of animal feed.

4. Competitive Landscape

Barriers to entry are High, driven by significant capital investment for fleets and processing facilities, the necessity of securing fishing licenses/quotas, and established global logistics networks.

⮕ Tier 1 Leaders * TASA (Peru): The world's single largest producer of fish meal and fish oil, leveraging massive scale and direct access to Peruvian anchoveta. * Austevoll Seafood ASA (Norway): A globally integrated seafood company with significant fish meal operations in Norway, the UK, and South America, focusing on high-quality meal from diverse species. * Oceana Group Ltd (South Africa): Africa's largest fishing company with significant fish meal production capacity, primarily serving regional and international markets with product derived from pilchard and anchovy. * Copeinca (China Fishery Group): A major Peruvian producer, now owned by the Hong Kong-based Pacific Andes Group, with a strong focus on exporting to the Chinese market.

⮕ Emerging/Niche Players * Innovafeed (France): A leader in insect-based protein (black soldier fly larvae) for animal feed, positioning itself as a sustainable, circular-economy alternative. * Calysta (USA): Producer of a single-cell protein (SCP) called FeedKind®, a non-animal, non-plant protein created by fermentation. * Daybrook Fisheries (USA): A key domestic producer in the U.S., specializing in menhaden-based fish meal from the Gulf of Mexico.

5. Pricing Mechanics

The price build-up for fish meal is dominated by the raw material cost. The typical structure is Raw Fish (55-70%) + Processing/Energy (15-20%) + Logistics (5-10%) + Supplier Margin (5-15%). Pricing is typically quoted in USD per metric ton and is highly correlated with the price of soybean meal, its closest commodity substitute.

The most volatile cost elements are raw material availability and energy. * Peruvian Anchoveta Price: Directly tied to government-set quotas. The cancellation of the first 2023 fishing season due to El Niño effects caused spot prices to surge by over 30%. [Source - IFFO, July 2023] * Industrial Energy Costs: Natural gas and electricity are critical for drying plants. While global energy prices have stabilized from 2022 peaks, regional volatility remains a risk factor, with price swings of +/- 15% in key production zones over the last 18 months. * Ocean Freight: Container and bulk shipping rates from South America to Asia or Europe can fluctuate significantly. Rates saw a >50% decline from their pandemic-era peak but have shown recent volatility due to geopolitical tensions.

6. Recent Trends & Innovation

• Alternative Protein Investment (May 2023): Major feed producer BioMar Group announced a strategic partnership with a leading insect meal producer to secure long-term supply, signaling a structural shift in feed formulation strategies.
• Digital Traceability Adoption (January 2024): Several Tier 1 suppliers have launched blockchain-enabled traceability platforms. These systems provide buyers with verifiable data on catch location, species, and time of harvest to meet stringent EU regulatory requirements and corporate ESG goals.
• Quota Disruptions (November 2023): Peru authorized a second anchovy fishing season quota of 1.68 million metric tons, providing temporary relief to the market after the cancellation of the first season. However, this figure was still below historical averages, keeping supply tight.

7. Supplier Landscape

8. Regional Focus: North Carolina (USA)

North Carolina is a net importer of fish meal, with no significant local production capacity. Demand is driven by two core sectors: the state's growing aquaculture industry (trout, catfish) and its large, established swine and poultry industries, which use fish meal in starter feeds for young animals. Proximity to the Port of Wilmington facilitates imports from both the US Gulf Coast (menhaden meal) and South America (anchoveta meal). The primary considerations for sourcing into NC are logistics costs from the port and ensuring compliance with FDA and state-level feed safety regulations. The demand outlook is stable to moderately increasing, tied to the health of the state's animal agriculture sector.

9. Risk Outlook

10. Actionable Sourcing Recommendations

1. Mitigate Peruvian Dependency. De-risk from El Niño and geopolitical exposure by increasing the share of non-Peruvian fish meal. Initiate qualification and contracting with US-based menhaden suppliers (e.g., Daybrook) or North Atlantic producers. Target sourcing at least 25% of total volume from outside Peru within the next 12 months to build supply chain resilience and create price leverage.

2. Pilot Alternative Proteins. Hedge against price volatility and enhance ESG credentials by formally evaluating protein alternatives. Launch a pilot program within 9 months to test feed formulations incorporating insect meal or SCPs for a non-critical product line. This builds technical expertise and prepares the supply chain for a strategic, long-term reduction in fish meal dependency, protecting margins during price spikes.