From imported products to "local specialties": China's caviar is in short supply overseas, and domestic consumption still needs to be cultivated
Every reporter: Fan Qianqian, Yang Xia, every editor: Chen Junjie
The most popular city this winter is "Erbin", which has taken over the "monstrous wealth". When the "Sichuan Red Panda", who was warmly received in Harbin, was about to return the gift, he found that he still had such a "high-end" specialty as caviar at home.
According to Sichuan News, on January 12, five large boxes of 1,200 cans of Sichuan caviar donated by Sichuan to the Harbin Municipal Bureau of Culture, Radio and Tourism arrived in Harbin and was signed locally at about 16 o'clock. It is reported that the company that produces the above-mentioned caviar is Sichuan Runzhao Fishery Co., Ltd. (hereinafter referred to as Runzhao Fishery), and its caviar brand is Fusita. On the same day, according to the official WeChat public account of Fusta Caviar, a few days ago, Fusta completed more than 100 million yuan in Series A+ financing, which was exclusively invested by Fengshang Capital.
The hot release of this wave of return gift "Erbin" also let the public know that the mainland actually occupies the main production of caviar in the world.
From imported products from the West to China's main products, how have Chinese enterprises become "invisible" hegemons in the industry? What are the "big players" in the mainland caviar industry chain? With the continuous expansion of production capacity, how will the mainland caviar industry develop in the future?
Recently, the reporter of "Daily Economic News" flipped through the public transfer prospectus (declaration draft) disclosed by Hangzhou Qiandao Lake Sturgeon Technology Co., Ltd. (hereinafter referred to as Sturgeon Technology), a leader in the global caviar industry, at the end of last year, and had an exclusive conversation with Sturgeon Technology executives and researchers who have studied the sturgeon farming industry for many years, trying to find answers to the above questions.
Image source: Sturgeon Technology's official website
China accounts for more than 60% of global caviar production
According to CITES (Convention on International Trade in Endangered Species of Wild Fauna and Flora), China's trade volume of farmed sturgeon caviar in 2017 was 135.90 tons, accounting for 25.3% of the total global sturgeon caviar trade. According to the "China Sturgeon Industry Development Report" prepared by the China Aquatic Products Circulation and Processing Association and the National Aquatic Wildlife Protection Branch.
This dominant position has expanded in recent years. In 2022, the caviar production of the leading enterprise Sturgeon Technology alone accounted for about one-third of the world's output, and in the same period, the caviar export volume of Sturgeon Technology accounted for 68.48% of China's exports. Sichuan Runzhao, the world's second-largest caviar company, accounts for 12% of global caviar production. In other words, the combined output of Sturgeon Technology and Sichuan Runzhao has accounted for about 45% of the world's total. In addition to the two leading companies, there are also other large and small caviar enterprises in China.
Today, China is the largest producer of caviar, accounting for more than 60% of the global market. It can be seen that China is now dominant in the caviar industry.
In the last century, the caviar industry was very different from what it is today. In a narrow sense, caviar refers specifically to sturgeon eggs, so sturgeon is an important resource for caviar supply. The last century was an era when wild sturgeon was harvested to make caviar, and the market supply of wild caviar rapidly decreased due to factors such as the decline of wild sturgeon resources. At the same time, the world's major caviar-consuming countries have successively enacted legislation to ban the trade of wild caviar, so that wild caviar has withdrawn from the market. This also provides an opportunity for Chinese companies to enter the caviar market.
After the ban on the trade in wild caviar, artificial farming gradually became the mainstream of global caviar supply. In order to achieve artificial breeding, the key is to break through the artificial breeding technology of sturgeon.
"When the industry was at its earliest, it was actually to overcome how to make seedlings eat artificial compound feed, if it can't be realized, it can't achieve large-scale breeding. Zhang Ying, director of the Harbin Experimental Station of the National Characteristic Freshwater Fish Industry Technology System and a researcher at the Heilongjiang Fisheries Research Institute of the Chinese Academy of Fishery Sciences, told the "Daily Economic News" reporter.
In 2002, the Heilongjiang Fisheries Research Institute realized the artificial breeding of mature sturgeon for the first time. Subsequently, the full artificial breeding of other types of sturgeon has been realized in China. According to Zhang Ying, after 2006, China has been able to achieve self-sufficiency in sturgeon fry, i.e., it does not rely on wild fry, and there is no need to import fry.
It was also in 2006 that Sturgeon Technology achieved the first export of artificially cultured caviar from mainland China. Now, after more than ten years of development, the scale of exports is growing day by day. According to CITES data, mainland caviar exports increased from 14.81 tons in 2009 to 291.29 tons in 2021. According to the EUMOFA (European Fisheries and Aquaculture Market Observatory), about 84% of the caviar imported by the EU in 2020 came from China, and about 66% and 60% of the caviar imported from China in the United States and Russia, respectively.
From the perspective of regional export volume, the joint research network report pointed out that according to China Customs data, in 2021, Zhejiang Province ranked first in the export volume of sturgeon caviar, accounting for more than 70%, and Sichuan Province ranked second, accounting for more than 19%. In addition, Fujian Province, Hubei Province, Yunnan Province, and Jiangsu Province also account for a certain proportion. It can be seen that the caviar industry is booming all over the country, from the southeast coast to the southwest inland.
The export price of domestic caviar has been rising in recent years
Caviar, along with foie gras and truffles, is known as "the world's top three ingredients" and is also known as "black gold". As a "luxury", its price is high.
Nowadays, the price of caviar is gradually lower than before, but it is still not cheap compared to other condiments.
The gross profit margin of the caviar industry is also relatively high. According to the public transfer prospectus of Sturgeon Technology, the gross profit margin of the company's caviar products has been around 70% in recent years. Fuyuan Group, another caviar company preparing to go public on the U.S. stock market, mentioned in its prospectus that the company's gross profit margin in the first half of 2023 was 40%. Xu Pengfei said that the high gross profit margin of caviar enterprises is indeed a common feature of the industry.
In Xu Pengfei's view, sturgeon that can be used to process caviar needs to be farmed for 7-15 years before it matures. The long breeding cycle and high breeding risk make the investment risk of the caviar industry high. At the same time, there are few enterprises with large-scale sturgeon farming volume, which also makes the caviar production enterprises in the industry maintain a high gross profit margin as a whole.
In addition, the low volume of caviar "shipments" is also a factor. Zhang Ying calculated an account for the reporter, based on the annual export volume of 300 tons of caviar, the consumption of about 3,000 tons of sturgeon is needed.
With the advent of the era of artificial farming, the production of caviar has increased significantly, and the growth of the supply side will generally drive the price down. However, the reporter noted that comparing the data disclosed in the prospectus submitted by Sturgeon Technology in 2016 and the public transfer prospectus submitted when seeking listing on the New Third Board a few days ago, from 2013 to 2015, the average selling price of Sturgeon Technology caviar showed a downward trend, but in 2021, 2022 and the first half of 2023, this data is on an upward trend.
The industry is moving in a similar direction. According to Sturgeon Technology's public transfer prospectus, from January 2020 to January 2023, China's caviar export prices rose amid fluctuations.
Behind this is the rapid growth of market demand. Xu Pengfei said: "In the past few years, the global caviar market has been in a state of short supply. Our output can't keep up with the demand for orders. Many overseas customers are in high demand, which also provides us with higher bargaining power. ”
On the other hand, based on factors such as quality requirements, large upfront capital investment, and technical barriers, it is not easy to enter the caviar industry. To a certain extent, this has also caused a special competitive pattern in the industry, as mentioned above, the top two caviar companies have occupied more than 45% of the global market, with a high degree of market concentration, which once again provides support for enterprises to improve their bargaining power.
The production process of caviar Image source: Sturgeon Technology official website
The domestic consumer market and domestic brand power need to be cultivated urgently
In fact, the special competitive landscape of the caviar industry also stems from the limitations of the industrial scale. According to data from Bergers Consulting, the global caviar market will reach 3.742 billion yuan in 2022. Compared with other industry markets, the caviar market of less than 10 billion is niche.
How to make the "cake" bigger is the focus of caviar companies and academia that are being considered.
From the supply side, increasing production is the key to expanding the market, and there is still a market gap for caviar. In the last century, when wild sturgeon was not banned, the world's largest annual consumption of caviar was as high as 1,988 tonnes, and in 2022 the export trade of caviar was around 550 tonnes.
Zhang Ying told reporters that the team is currently carrying out research on the cultivation of all-female seedlings. "Only the eggs of the female fish can produce caviar. In nature, the ratio of males to females is almost 1:1, if some technical means can be used to achieve all-female breeding in the early stage, it can save about 50% of the production cost of breeding and improve production efficiency. ”
Xu Pengfei told reporters that at present, Sturgeon Technology is laying out new breeding bases and laying out production capacity in advance. "Sturgeon needs to be farmed for 7-15 years (to produce caviar), so it is equivalent to at least 7 years in advance to lay out production capacity, and we are still doing this to expand the reserve breeding echelon to support future market demand. ”
The domestic consumer market still needs to be cultivated Image source: Sturgeon Technology's official website
From the demand side, how to do a good job in consumer "education" is the key, especially the cultivation of the domestic consumer market. At present, the caviar consumer market is more concentrated overseas, and more than 70% of its product revenue comes from overseas.
Opening up the Chinese consumer market is not an easy task, how to adapt caviar to the taste of Chinese is the key, to this end, the company has also made a lot of efforts, including promoting to domestic high-end hotel catering customers to replace imports with domestic products, co-branding with Chinese restaurants to cultivate dishes, and conducting food exchange meetings.
The good news is that thanks to the marketing promotion of Chinese caviar companies, the domestic consumption market of caviar has grown significantly in recent years. Xu Pengfei told reporters that in 2022, the company's caviar products will sell more than 10 tons in the domestic market, and last year it has climbed to 20 tons, and it is expected that the sales growth rate of the domestic caviar market will reach more than 40% in the next few years.
In addition, because foreign caviar brands often have a long history and high brand awareness, domestic caviar brands are not well-known in the international market, which also affects the profits of enterprises to a certain extent. In terms of brand building in foreign markets, Sturgeon Technology adopts the method of co-branding on the one hand, and on the other hand, it tries to use its own brand sales in emerging markets such as the Middle East. "In the future, we will also consider trying to carry out more in-depth cooperation with customers. Xu Pengfei said.
National Business Daily