Alaska salmon may have market as powder in China

UAF economists, seafood scientists say protein powder made from Alaska pink and chum salmon a hit among Chinese

Date: 8/1/2004
Contact: Dr. Brian Allee, Director, Alaska Sea Grant College Program, 907-474-7086, allee@sfos.uaf.edu. Or contact Dr. Mark Herrmann, Professor of Economics, University of Alaska Fairbanks, School of Management, 907-474-7116, ffmlh@uaf.edu.
NR: SG-2004/NR217

Online report: An Economic Analysis of the Market for Wild Alaska Salmon Protein Concentrates in China [PDF; 878 KB]

Related Web sites
• Faculty Profile: Dr. Mark Herrmann, Professor of Economics
• Profile: Dr. Brian Allee, Director, Alaska Sea Grant College Program
• Faculty Profile: Dr. Chuck Crapo, Seafood Quality Specialist
• Faculty Profile: Dr. Lily Dong, Assistant Professor of Business Administration
• Faculty Profile: Dr. Quentin Fong, Seafood Marketing Specialist
• Advances in Seafood Byproducts: 2002 Conference Proceedings

FAIRBANKS, Alaska—Chinese children and their parents overwhelmingly preferred the taste of new protein supplements made from Alaska pink and chum salmon to their traditional supplements made from carp, according to a study conducted by University of Alaska Fairbanks (UAF) researchers and funded by the Alaska Sea Grant College Program and the UAF School of Management.

Some 90 percent of those surveyed chose Alaska salmon powder over powder made from Chinese grass carp. The finding, based on surveys and taste tests conducted with 250 parents and their children in five large cities in China, may help Alaska's salmon industry create new products and markets for abundant but low-value pink and chum salmon.

Cathy Xu, a Chinese immigrant from Canada, conducted the study for her master's degree in economics at UAF.

"When I moved to Alaska, I had my first son," explained Xu. "I want him to be healthy. That's why I asked my sister to send me fish powder from China. She suggested that I find powder in Alaska because we have a lot of salmon here. But I tried and I couldn't find any. That's how I came on the idea of producing it. It might be possible for Alaska to ship it to China and compete with the local carp powder and make some profit from it."

Salmon powder is not currently made in Alaska, although years ago at least one Alaska seafood processor made it under a federal aid program for export to nations with acute food shortages.

Putting a new twist on the idea, Xu worked with Chuck Crapo, Marine Advisory Program seafood quality scientist at the UAF Fishery Industrial Technology Center in Kodiak, to produce a variety of powders made from pink and chum salmon. Crapo used modern processing methods that employ extremely low temperature to turn the fish into a low-fat, low-moisture powder containing an average 77.5 percent protein, substantially more than the average 55 percent protein found in grass carp powder. Five different powder samples were produced for the study. Some powders were made using just the salmon flesh, while others included the bones and skin. Some samples had a natural "fishy" taste, while other samples were sweetened with powdered sugar.

Before taking the salmon powders to China, Xu tried them out on a focus group of parents and children from Fairbanks' Chinese community.

"Most of the kids in the focus group liked the sweet powder," said Xu. "When I sent the samples to China I got the same result. Sweet-tasting powder tasted better than natural powder."

The taste tests also indicated that Chinese consumers preferred the powder be made of firm, early-run pink or chum salmon and that only the fish's flesh be used. Powder samples that included the bones and skin didn't rank well in the survey and taste test.

Mark Herrmann, professor of economics at UAF who guided the project, says Cathy Xu's research revealed what may be a lucrative market for salmon powder in China. He said millions of Chinese people regularly use carp powder as a source of protein. If their study is an indication, most Chinese consumers would gladly switch to salmon powder if it were available and the price was right.

"I think the most telling statistic was that after they tried all of the salmon powders and the carp powder, we asked them to choose their preferred product," said Herrmann. "Ninety percent of them picked salmon and just 10 percent picked carp. And of those 90 percent who picked salmon, 70 percent indicated they would like to buy it."

Xu also worked with Lily Dong, UAF assistant professor of marketing and an expert in Chinese consumer preferences, and Marine Advisory Program marketing specialist Quentin Fong to coordinate the taste test and survey. Dong said the market for products that use salmon protein powder as an ingredient is probably large, especially if the products cater to the diverse regional tastes of the Chinese people. She said the products should also say "Made in Alaska," since Chinese consumers, just like those in the United States, place a high value on quality and brand names.

"Alaska is known for salmon so it may be good to market it as an Alaskan product," said Dong. "I think it is going to send a signal of good quality and authenticity. So when it's Alaska salmon, people believe in it."

Low prices and declining markets are driving the effort to develop new products for Alaska pink and chum salmon. In 2003, Alaska fishermen harvested 500 million pounds of pink salmon along with 124 million pounds of chum salmon. According to the Alaska Department of Fish and Game, fishermen received an average 6 cents per pound for pinks and 16 cents per pound for chums. Much of the pink catch still ends up in cans, while a small but growing portion of the harvest is turned into flash-frozen fillets.

Globally, products that use protein from soy, whey, chicken and beef constitute a multibillion-dollar business. Brian Allee, director of Alaska Sea Grant, believes protein powder made from salmon and underutilized fish such as arrowtooth flounder could one day end up in a wide range of products, from foodstuffs to nutritional supplements to cosmetics.

"This is exactly the kind of research Alaska Sea Grant and the University of Alaska should be engaged in," said Allee. "One of our goals is to help grow the Alaska economy, to find new ways of doing business in markets around the world."

Allee said this study is a first step and that he hopes further research will investigate the best way to bring salmon powder to market. There are a lot of issues still to be worked out, he said.

"We want Alaska to get added value for the fishery products it produces," Allee said. "To really know the potential, there will have to be studies of how Alaska's energy costs, labor, packaging and shipping costs will affect the market price for these products."

Researchers did not study the economic potential of Alaska salmon as a player in the global fish protein powder market, nor did they estimate how much salmon might be used in the production of salmon protein powder.

"The focus of this study was really just to see if these consumers would accept it," said Herrmann. "Because if they wouldn't accept it, there's no reason to take the next step."

The Alaska Sea Grant College Program is a marine research, education and outreach service headquartered at the University of Alaska Fairbanks, School of Fisheries and Ocean Sciences. Alaska Sea Grant is funded by the National Oceanic and Atmospheric Administration in partnership with the State of Alaska and private industry.