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November 7, 2016

QINGDAO, China — Canadian fishing firm Clearwater Seafoods plans to add scallops and products from its 2015 UK acquisition, Macduff Shellfish Group, to its portfolio for e-commerce sales in China.

Clearwater has recently started selling its products through e-commerce platforms, such as JD.com and Tmall, focused on lobsters and clams, Ian Smith, CEO, told Undercurrent News.

“We are very excited about e-commerce in China and are seeing rapid growth, from a low base,” said Smith, during the 2016 China Fisheries & Seafood Expo.

“There is opportunity for growth in our biggest categories, like clam and lobster. Also, we see openings to add other species to the portfolios, to sell on those platforms. Scallops, for example,” he said.

The company does sell scallops in China, but in relatively small quantities related to what it is selling in other parts of the world. Also, no sales are currently going through e-commerce.

“Also, there are openings for the Macduff products,” he said.

Macduff is already selling crab in China, which will likely be added to the e-commerce platform.

“They were already selling brown crab in this market; we are just going to be expanding it rapidly. We also see openings for [Macduff] langoustine and whelk in this market,” he told Undercurrent.

On e-commerce platforms, companies can “tell the story” of the product better than in conventional retail, as well as get more data, he said.

“You know who is buying your product; you know their ages, the average purchases per transaction. In foodservice, after you have sold the product, it is pretty opaque. We will have much better data on where our products are being consumed and by whom,” said Smith.

Smith clarified the “we” in China refers to the company’s importer and distributors who are partnered with the company. “We are not transacting in China, that is not our legal structure,” he said.

Double-digit growth

The company is on target to have double-digit growth again in China this year, which would be the sixth year in a row, said Smith. “In particular, the clam business and the lobster business are the leading growth areas.”

For the future, the company is looking to grow in three key channels: foodservice, retail and e-commerce.

“In foodservice, there are growth openings with our existing customers. There is an increased emphasis on expansion to “tier two” cites, which are growing at a faster rate,” he said.

“For retail, we are expanding our number of species, products and our retail customer base,” he said. Then, e-commerce is the third channel.

The company is also seeing growth in Japan and South Korea, he said. Asia has become its biggest sales region, more than Europe and the US, which is “not going to change”, said Smith.

“It is going to continue to grow,” he told Undercurrent. This is because of the strong demand and also due to Clearwater expanding its products for the Asian market.

For example, the company now has a higher volume of clams, due to the addition of a third vessel, Belle Carnell, last year.

“So, we can expand the market. We can also create new product formats,” said Smith.

In September, Clearwater announced plans to build another clam vessel, investing roughly CAD 70 million ($54m).

The investment will replace an existing 28-year-old clam vessel with one that can deliver significant productivity and efficiency improvements through a more efficient harvesting platform, the company said, at the time.

In Canadian lobster, the company is also expanding its procurement, in order to grow the markets in China and Japan, said Smith.

“Then, we can also grow the Macduff products in Asia. That is not shifting these out of Europe; we are also rapidly expanding our procurement of products, like langoustine, whelk and crab, in the UK,” he said.

Being bought by Clearwater gives Macduff more financial clout to expand purchasing outside the products caught by its own fleet.

“They can do more now, than they did in the past,” he said.

Although Asian demand is booming, the US market has also been strong in 2016.

“We continue to be very bullish on our ability to grow globally, led by Asia. But, the US market has not been a slouch,” said Smith.

Also, the free trade agreement with the EU should be a boost for Canadian seafood.

“It is certainly a big win. But, we are waiting to see what the speed of ratification is. You don’t want to bake it into your plan, as you don’t know how quickly the tariffs will come down,” said Smith.

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