Tuna Industry Impact: Market Dynamics and Emerging Challenges
Snapshot of Global Canned Tuna Industry
Renowned as a significant player in the global food landscape, the canned tuna industry has a market value pegged at about $40 billion. An impressive marker for the industry is the U.S. as a primary destination, evidenced by the 2021 imported figures of roughly 637.9 million pounds of the fish. Most striking is that canned tuna represents a significant 71% of this remarkable figure.
The dominance of multinational corporations such as Thai Union Group, owners of the widely recognized Chicken of the Sea brand, is a characteristic feature of this industry. Yet, the industry has navigated through considerable turmoil over the past couple of decades.
Understanding the Challenges
Between 2000 and 2021, the industry recorded a steep 45% plummet in the per capita consumption of tuna within the U.S. This decline is attributed to several factors including evolving consumer tastes, market consolidation, concerns on sustainability and transparency, coupled with a persistent price-fixing scandal that sustained for almost a decade.
The Resurgence and Beyond
Intriguingly, the onset of the Covid-19 pandemic in 2020 led to an unexpected surge in demand for canned tuna. This resulted in the highest consumption level since 2011, signifying a strong comeback. Specifically, Thai Union witnessed a 19% profit augmentation compared to 2019, despite the tumultuous times.
However, times continue to be testing for the industry as a whole and for Thai Union specifically. With the ongoing inflation introducing cost-push pressures, the Russia-Ukraine conflict, and the looming existential threats of sustainability issues, climate change, and illicit fishing, the once tranquil waters seem increasingly turbulent.
Future Strategy
As the industry grapples with these challenges, Thai Union plans to combat the rising costs due to inflation and the war implications with price escalating and automation strategies. These are intended to cushion the impact and ensure the continuity of operations.
Yet, with mounting external threats including sustainability issues, climate change, and illegal fishing, the industry must innovate and adapt to ensure survival and ultimately thrive in the changing landscape.
