Seafood Traceability Makes for Better Products and a Healthy Bottom Line

The environmental benefits of seafood traceability are obvious: By tracking a fish through the entire supply chain – from capture to plate – you can ensure the fish wasn’t caught using illegal, unreported and unregulated (IUU) fishing practices. But many companies, like Norpac Fisheries Export, are discovering that traceability is also good for their bottom lines.

When Norpac set up an electronic tracking system in 2002 to monitor the fish it captures and sells, the company wasn’t trying to certify its seafood as sustainable, Norpac’s Managing Director Thomas Kraft says; the goal aim was to develop a tool to better manage the flow of the company’s product. It was only after the system had been in operation for a few years that Kraft realized it could help the company follow fish through the supply chain -- essentially creating a reliable audit trail for its product -- and guarantee its seafood was not captured using IUU fishing methods.

Under Norpac’s monitoring system, fishermen tag each fish with a barcode and record information about the vessel and the catch while offloading their boats: species, weight, and time and location of capture. Some of the company’s boats are outfitted with radio-frequency identification (RFID) tags; on these ships, fishermen wrap a Velcro strap with a RFID chip around each fish’s tail. Norpac’s RFID reader connects to a vessel monitoring system, which allows the company to identify where fish were caught within a few hours of capture, Kraft says. To further verify the ship’s catch, government observers document each fish caught once a boat lands and corroborate their records with vessel log books.

During the processing stage where fish are broken down into their component parts, processors assign barcodes for each part of the fish and tie the new codes back to the fish’s original barcode, Kraft says. Each of the four loins of a tuna will have a separate barcode, for example. To authenticate the company’s traceability data, Kraft says Norpac works with third-party auditors FishWise and MRAG Americas.

Is such a thorough tracking system time-consuming and labor-intensive to implement?

“It actually saves us time and money,” Kraft says. “It’s a value add to our business.”

Fish is a highly perishable product, so it’s invaluable for a fishing company to know what product it has in a timely manner – information a fish tracking system can provide, Kraft says. If a company doesn’t know its inventory, product tends to idle in storage, losing freshness and potentially ending up unsellable and wasted. On the other end of the spectrum, a company may short customers and lose a sales because it didn’t realize it didn’t produce enough product.

“There’s less waste [with our traceability system],” Kraft says. “It improves efficiency and our utilization of the material.”

Following fish through the supply chain can also improve customer service, according to Kraft: If a customer has a question about product it purchased, Norpac can track the fish’s barcode to quickly identify the issue and where in the chain it happened – a process that used to take days, now takes hours, Kraft says.

Businesses should also look at traceability as a risk mitigation tool, Kraft says, to protect their financial liability or prevent public relations crises.

“If [a store, restaurant, etc.] is buying fish from a company, and it comes out that they have IUU fishing in their supply line or use slave labor on their boats, that’s going to reflect poorly on [the buyer],” Kraft says.

But can traceability translate to higher profits? Can a fishing company using sustainable fishing practices fetch a higher price for a fish that it can track through the supply chain and demonstrate its environmental credentials?

“It’s not enough to say fish is moving toward sustainability,” Kraft says. “Customers appreciate that, but they don’t feel like they want to pay more for it.”

According to Kraft, a fully traceable fish, caught in an environmentally responsible way, doesn’t necessarily command a higher price, but it can attract new customers and open doors to new opportunities in the marketplace. However, he says, a company may be able to charge more for sustainable seafood if they can promote its excellent quality, proving that the fish is fresher and was in transit for a short period of time, for example.

Michael Carroll, vice president of the fisheries and aquaculture division at environmental consulting firm Vertex, agrees that sustainable seafood doesn’t always yield higher profits in consumer markets, citing a lack of peer-reviewed studies that show U.S. consumers will spend more on sustainably caught fish. But many studies indicate that consumers already pay more for high-quality fish from premium locations, such as lobster from Cape Cod, says Carroll, also a co-founder of BackTracker, a database system that helps companies follow fish through the supply chain and validate their data against government records.

Without a grounded traceability system, fishermen will struggle to see market premiums flow back to them through the market, Carroll explains. If a fishing company can verify the origin and attributes of the fish, using a traceability system like BackTracker, it has the opportunity to reap the higher price its product commands in the marketplace, he says.

“If a fisherman produces a high quality product from a premium location but doesn’t have the ability to pass data [about the fish’s capture] through the supply chain, he has no chance to get a higher price for that fish,” Carroll says.

In general, Carroll says that traceability – combined with a system to authenticate its data – should increase the value of products from most fisheries that strive for food safety, sustainability, quality, premium location or other “desirable attributes,” depending on the consumer and market.

Image credit: Flickr/Tom Godber