July 8, 2008

Convincing Consumers Your Food is Safe

I've always enjoyed shrimp, but it has been a year since I've grilled it, ordered it in a restaurant, or sampled it as a party hors d'oeuvre. Last June, the U.S. Food & Drug Administration temporarily halted the import of some Chinese shrimp and other fish [BusinessWeek.com, 6/28/07] because they contained carcinogens and antibiotics -- probably the result of what they were fed in huge cramped fish farms. The FDA continues its "Import Alert," and as of April, had detained and tested nearly 3,000 shipments of aquacultured seafood from China, releasing less than half into the U.S.

China isn't the only exporter of shrimp to the U.S. -- it comes from dozens of other countries -- and I figure other countries use similar fish-farming techniques. The nonprofit FishWise recommends sticking with U.S. farmed and wild shrimp only. Unfortunately, waiters in restaurants and the guys behind the fish counter generally don't know, or care, where the shrimp they scoop for you come from, and it's not considered good form to ask the host at a party where the shrimp platter originated. Easier just to do without.

Apparently I'm not alone in abstaining. Shrimp sales in the U.S. were off 7% last year, according to a report prepared by trade organization Infopesca for the U.N.'s Food & Agriculture Organization, with much of the decline coming in the second half of the year, apparently because of the FDA's action.

Escaping a Bad Reputation Easy for me, but what do you do if you're in the business of importing shrimp, and you've taken pains to ensure your shrimp isn't contaminated and you've had it certified as organically raised and free of chemicals and antibiotics? How do you let the marketplace know your product isn't like everyone else's?

That's the challenge facing John Battendieri, founder and CEO of Blue Horizon Organic Seafood a three-year-old company that sells shrimp imported from special farms in Ecuador where, according to Battendieri, the shrimp is raised in pristine low-density conditions much different from most of the world's fish farms. "We know the folks who raise our shrimp personally," says Battendieri. "We can trace a bag of shrimp back to the pond in which it was grown."

While Blue Horizon has expanded its markets and sales to take advantage of the fears around Chinese shrimp, Battendieri thinks sales could be a lot better, except for two big problems associated with trying to sell eco-friendly shrimp. First, there are no official U.S. standards for organic fish, as there are for other organic foods, such as fruits and vegetables. In fact, California passed a law in 2005 that says, among other things, you can't label fish you sell as organic until federal standards for such labeling are set, and those are still a ways off. California is Blue Horizon's largest market.

Getting the Word Out Second, you don't get much opportunity in the fish section of most supermarkets to explain what makes your fish special. That's because the supermarkets pretty much determine how the fish are displayed in the fish counter, and most don't provide a lot of background about where the fish come from or how they are raised. And as I said, the guys behind the counter tend not to be interested in such minutiae. So, while the grocer's fish-buyer sees a multicolored flyer from Blue Horizon promoting "Certified Eco-Farmed Bulk Shrimp," the consumer more likely will see only a sign saying "Shrimp, $12.99 lb."

To get around the organic-labeling problem, Blue Horizon uses respected outside organizations to certify its shrimp, such as Naturland, a German organic farming association. That helps in selling to stores, but still doesn't give you the "organic" label to put on the fish you sell to consumers.

Educating the Public And Blue Horizon is shifting to selling more prepackaged frozen shrimp, for which it has control of the packaging design and wording. "For us, the message is our product certification by three different certifiers to be free of the chemicals [that have been associated with Chinese shrimp]," says Battendieri. The company is also working to educate grocers so they'll provide consumers with more information about the distinctive qualities of his company's shrimp.

Blue Horizon's attention to differentiating itself in a suspect crowd is paying dividends. Battendieri is expecting sales to at least triple this year, to $6 million or more, up from last year's $2 million. Future growth "is all about education at this point," says Battendieri.