What We LearnedWe attended the National Fisheries Institute’s annual conference.

Here are the top 10 things we learned.

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In short…

The National Fisheries Institute held its annual conference in San Francisco. Here are the top things that we took away from the meetings and our conversations with attendees. Many of the charts and slides I’ve included are from the NFI and its panelists.

First, the good news. Americans are eating more fish. In terms of “ok” news, foodservice trends (where most seafood is consumed) show that the segment with the smallest share of seafood sales is also the fastest growing, and the segments which move the most seafood are flat to down. That will put pressure on the industry to learn how to menu seafood in quick service restaurants to participate in the growth that’s happening there.

Politics, particularly around imports, represent a potential headwind. Washington is looking at taxing imports, which could be bad given 90% of the seafood consumed in the US is imported (we import more seafood than all other proteins combined, and 20%+ of our seafood imports come from China).

Now to the details. For our core items, scallop landings look set to increase in ’17, driven by smaller scallops. We expect 20/30 and smaller domestic scallop prices to decline due to growing supply, which could be further driven by continued strength in the dollar (20/30 size is enjoyed by Europeans). It looks like haddock and cod will be relatively stable. And although many people are looking at mussels as a commodity, when you peel back a layer, there are dramatic differences in how they are priced.

We have more info in the slides that follow and would be glad to discuss this further should you have any questions.

Thank you for your support.

Peter Handy | President & CEOpeterh@bristolseafood.com

207-200-2555

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America ate almost 5 billion pounds of fish

4.92 4.90 4.85

4.89 4.87

4.66

4.50

4.57

4.64

4.96

4.20

4.30

4.40

4.50

4.60

4.70

4.80

4.90

5.00

'06 '07 '08 '09 '10 '11 '12 '13 '14 '15

Aggregate Seafood Consumption in the U.S.(billions of pounds)

Source: NOAA

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…and per capita consumption is growing too.

Source: NOAA

14.9 14.8 15 15.2 15 14.8 14.6 14.915.4 15.2

14.815.6

16.3 16.616.2 16.2 16.3 16 16 15.8

1514.4 14.5 14.6

15.5

0

2

4

6

8

10

12

14

16

18

0

2

4

6

8

10

12

14

16

18

'91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

Per Capita Seafood Consumption in the U.S.(pounds)

Fresh & Frozen Canned Cured

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Imports were a hot topic at the conference

Source: Cattle-Fax, NOAA

90%+The portion of the seafood consumed in the U.S. that is imported

22%The percentage of imported seafood that comes from China.

Seafood Beef Pork Poultry0

1

2

3

4

5

6 5.7

3.4

1.1

0.1

Total Protein Imports(billions of pounds)

With the U.S. considering a border adjustment tax (makes imports more expensive), all eyes were on imported seafood. Almost all of the fish we eat is imported… We import more seafood than all other proteins combined… China represents more than 20% of imports.

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Restaurant trends are mixed

Source: The NPD Group, Inc.

Change from 1yr agoShare of Seafood

Entrees SoldTraffi c Seafood Servings

Casual Dining 40% -3% 0%Midscale 26% -3% -1%Quick Service 22% 0% 7%Fine Dining 12% 0% -10%

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Expect more scallops to be landed in the US in ‘17

Source: NOAA, Urner Barry*Estimate, **Estimate, based on 13 months

36.4

30.0

34.1

38.8

46.0

-

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

'13 '14 '15 '16E* '17E**

U.S. Scallop Landings(millions of pounds)

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Scallops are getting smaller

Source: BASE New Bedford, MA

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More than half of global scallop supply comes from China

Source: FAO Global Fishery & Aquaculture Statistics

10

Outlook for cod supply looks stable

Source: Groundfish Forum

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Global supply of haddock to decline, but not by much

Source: Groundfish Forum

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There are significant differences in pricing among mussels

Source: The Gulf of Maine Research Institute, The Hale Group