From the Ocean To the Plate 0
About American Seafoods Company founded in 1988 25 th anniversary celebrated in 2013 Largest Catcher/Processor operator in the U.S. (6 active vessels) Largest CP quota holder in the U.S. Alaska Pollock as well as the Pacific Hake fishery 1,000+ employees All our fisheries are certified sustainable by the MSC Annual harvest(¹): 300,000mt+ In house global logistics (¹) 2014 catch numbers 1
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Noteworthy survey efforts from Dr. Ianelli 6 Surveys completed in 2016 that affect pollock in Alaska 1. Gulf of Alaska winter acoustic trawl survey (665 kt biomass in survey; down from 2015 but above average) Bering Sea winter 2. Bogoslof region (biennial) Bering Sea summer 3. Acoustic trawl survey (biennial) 4. Bottom trawl shelf region (annual) 5. Bottom trawl slope region (biennial) Aleutian Islands summer 6. Bottom trawl survey (biennial) Still processing Source: NMFS 3
Alaska Survey regions Gulf of Alaska Bogoslof region Bering Sea Aleutian Islands 4
EBS shelf environment Warm year in Bering Sea Source: Bob Lauth AFSC 5
EBS shelf environment Bottom temperature development past 3 years 2014 2015 2016 Source: Bob Lauth AFSC 6
Bering Sea pollock bottom-trawl survey trend Down from 2015 but still above average 7
Alaska pollock outlook Eastern Bering Sea Fishing conditions good. 2016 catches = TAC (1.340 million t) Spawning biomass above average Surveys moderate Lack of young pollock in surveys Warm conditions could negatively affect recruitment in medium term Data still being processed but seems likely to have 2017 similar to 2016 Gulf of Alaska 2016 Quota highest in recent decades (~170 thousand t likely caught) Source: Dr. Ianelli 8
Unit: 1,000MT U.S. Alaska Pollock Quota (TAC) by Region 1.600 1.400 1.200 +5.5% 25 year average: 1.25 mill MT 1.000 800 600 400 200 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Bering Sea Gulf of Alaska Aleutians Source: NMFS 9
Production trends B-season 2016 vs. 2015 Per October 1st, 99% of the TAC was taken = same as last year (numbers below in 1,000 mt) COMPARISON BY SEASON 1-Oct-16 3-Oct-15 B 2016 B 2015 15 vs. 2016 (%) Roe 0.4 1.11 (66.58) Surimi 118.0 115.2 2.46 Surimi Ratio 47% 48% PBO Fillets 80.8 77.7 4.00 PBI Fillets 2.12 2.84 (25.39) Deepskin Fillets 28.8 26.8 7.62 Sum Fillets/Blocks 111.8 107.3 4.12 Mince 19.9 15.0 32.86 Sum Fillets/Blocks/Min 131.7 122.3 7.65 Block Ratio 53% 52% Fishmeal 36.8 35.5 3.68 H&G 18.8 16.3 15.24 Source: NMFS 13
Production comparison 2016 vs. 2015 UNIT: 1000MT 2016 2015 15 vs. 2016 (%) Roe 14.8 21.9 (32.43) Surimi 198.1 202.3 (2.07) PBO Fillets 115.5 126.1 (8.39) PBI Fillets 4.8 6.1 (21.55) Deepskin Fillets 46.5 43.7 6.41 Sum Fillets/Blocks 166.9 176.0 (5.17) Mince 34.6 25.2 37.49 Sum Fillets/Blocks/Min 201.5 201.2 0.17 Fishmeal 64.0 61.0 4.88 H&G 33.5 54.7 (38.73) Source: NMFS 14
Roe: Alaska Pollock Market update Continue to be a very important product for industry Market struggles with high supply and weak/flat demand. Market in Japan in dire need of new product development that cater to younger people. Blocks: It s tough. 2016: PBO production down 9% compared to 2015 but supply from Russia is up. Pricing continue to be under pressure. North America and Europe are the key markets Asia is growing European demand is good but market somewhat uncertain due change of plant ownership in PL sector DS market in the U.S. slightly up 1x gaining market share over 2x ( in Europe and N.A.) Fillets / portions: Production is limited, but increasing. Small set-back this season due to small fish N. America key market. Europe growing again. Product diversification will continue in Alaska 15
Alaska Pollock Market update cont. Surimi: 2016 surimi production expected to be on par with 2015 (200k mt+). Demand is good in all three key regions (Asia, Europe and N. America). More push for sustainable surimi products in N.A. and in Europe. Species name now called out on retail packaging Product innovation growing H/G: Production continue to decrease. Brazil market growing Meal / Oil: Increasingly important to industry. 16
The big challenges Current core product pricing not sustainable long-term Rising costs Processing facilities (factories and vessels) need investments The Species name we need one species name across all markets The Trade name it is important not to confuse the consumers with inaccurate fish descriptions and we are doing something! 17
Pollock s identity crisis. Not initiated by industry. Scientists in Canada first to re-classify pollock as a Gadus sub-species based on advances in DNA sequencing revealed pollock closely related to Atlantic cod North American scientific community has largely adopted Gadus chalcogrammus as the valid scientific name International scientific community has been slower to adopt the new species name U.S. regulatory entities recognize pollock as Gadus but have not yet required use for documentation or labeling German government has notified industry Gadus is only valid name effective December 2017 Two different scientific names in use at the same time is unacceptable to industry We will push for wider adoption of Gadus name, but must be done in orderly fashion to avoid disruption of trade 18
Protecting the Alaska Brand Use of a specific, legally-identified geographic area (e.g. country, state or province) in a market name for a consumer-based product for items not from that region is a practice that inevitably leads to misleading consumers The EU has aggressively protected geographic descriptors for consumer products, including seafood from China, Vietnam and Norway The U.S. Government has taken action that limits use of the term Alaska as a geographic descriptor for Pollock The U.S. pollock sector will seek protection for the term Alaska in all markets, including the EU 19
GAPP - 2016 Highlights Schools Program 14% increase in USDA purchases year-on-year New USDA product in the works Whole Grain Fish Finger Launch of German PR Campaign Japan Media Tour Key Journalists visit Dutch Harbor McDonald s video https://www.youtube.com/watch?v=_1oorqa69qk 20
+5.5% Source: NMFS 23
MT North Pacific Hake (whiting) TAC 400.000 +11.5% 350.000 300.000 250.000 200.000 150.000 100.000 50.000 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016* U.S. Canada Source: Pacific Fishery Mgmt. Council 24
Pacific Hake TAC vs. Catch ('000mt) 2008 2009 2010 2011 2012 2013 2014 2015 2016 Coast Wide TAC 365 184 263 394 251 365 428 440 Coast Wide Catch 322 177 226 286 206 284 301 191 497 300-350 Left in Water 43 7 37 108 45 81 127 249 % of TAC 12% 4% 14% 27% 18% 22% 30% 57% Est. 25
2016 US Hake typical product mix 1. H/G/T (and WR) 2. Surimi 3. Filet blocks 4. Fillets (IQF) Main markets: Russia, Ukraine, Eastern Europe. Growing: China, Africa and Middle East Main markets: Domestic U.S., Europe. Growing: Asia Main market: Europe Main market: Domestic U.S. + Europe growing 26
+5.5% Source: NMFS 27
MT U.S. Pacific Cod TAC (BSAI + GOA) 300.000 250.000 200.000 150.000 100.000 50.000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016* BSAI GOA Source: Pacific Fishery Mgmt. Council 28
MT U.S. Pacific Cod Product Forms 140.000 120.000 100.000 80.000 60.000 40.000 20.000 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016* H&G CBO H&G J-Cut Fillets Source: NMFS * Numbers through Sep 24th 29
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