Improving seafood freshness at the port markets of Phu Quoc, Vietnam with Japanese seafood technology pilot

For three weeks in July and August, Meros senior analyst Hiroki Seki dove into the Vietnamese seafood industry, moving from Phu Quoc Island, the largest island in Vietnam and a part of Kien Giang province, to Rach Gia, the capital city of Kien Giang province, to Ho Chi Minh City, interviewing seafood experts, visiting fish markets and discussing the growing market for premium fresh fish. This research is all part of an on-going pilot project funded by JICA (Japan International Cooperation Agency) to increase the incomes of fishermen and reduce food-loss by improving the freshness of the fish sold in Phu Quoc. The project is led by three fishery companies from Japan’s Yamaguchi Prefecture, the westernmost tip of Japan’s main island. The three companies, Yutaka, Fujimitsu and Nishi-F, aim to introduce Japanese technologies for maintaining fresh fish quality into Phu Quoc’s main seafood market, and Meros is supporting by investigating the regional market demand for fresh seafood among seafood end users in Phu Quoc, Rach Gia and Ho Chi Minh.

Seafood today is mostly sold at markets on the streets in Phu Quoc and is rarely sold at supermarkets. Seafood is sold by fishmongers who sell many kinds of locally sourced seafood such as horse mackerel, squid and octopus. These markets are visited by not only by general consumers but also buyers from the local restaurants. Therefore, the markets can get extremely crowded during busy times of day.

Fishmongers selling fish on the streets of Phu Quoc.

Two challenges dominated the struggle to maintain seafood freshness along the supply chain in Phu Quoc

1. After the seafood is caught, proper refrigeration measures are not taken on the boat, causing an immediate decrease in quality

2. After seafood is landed, the freshness deteriorates during the distribution process before reaching the end-users due to inadequate refrigeration.

As a result of these cold chain weaknesses, much of the seafood arriving at the Phu Quoc market does not end up sold for human consumption, but instead ends up as feed for farmed fish or discarded. To address these challenge, we are conducting a pilot project between January 2022 to August 2024 to introduce several Japanese technologies that may be able to increase incomes of the fishermen as well as decrease food-loss and maintain good prices for high quality fresh seafood.

Specifically, we are:

1. Manufacturing and installing a machine to produce slurry ice at the port in Phu Quoc

Slurry ice is a sherbet-like ice that can penetrate the fish, cooling its body temperature quickly. The machine was designed by Japanese companies Remice and Yutaka and manufactured in Japan. It will soon be shipped and installed at Phu Quoc port.

2. Converting existing ships’ wooden tanks to FRP fish tanks

FRP (fiber-reinforced plastic) fish tanks have a higher tolerance to heat than wooden fish tanks.

3. Bringing cold storage boxes from Japan

These boxes are made of styrofoam with a special coating and have enhanced heat-resistance. By putting the rem ice inside these boxes, fish can be transported from the harbor to end-users without a decrease in freshness.

Here is an example of bonito kept fresh using slurry ice in Amami Oshima, an island in Japan.

Over the next months, our partners will monitor the boats, like those pictures below, which installed FRP fish tanks filled with slurry ice to see whether this has improved the freshness of fish compared with fish caught by conventional methods. We also use the cold storage boxes to see whether the fish can maintain freshness all the way to the end users, such as restaurants and supermarkets.

But to make these cold chain investments sustainable long-term, it is critical to know- is there really demand from Vietnamese end users for fresher fish?

This was Meros mission. We investigated the interest in fresh fish among Vietnamese end users through interviews and visits with over 30 restaurants, hotels, and fish processing companies in Phu Quoc, Rach Gia, and Ho Chi Minh City.

And indeed, we found out that there’s very high demand for fresher fish, driven both by the growing hotel and restaurant industry, as well as the fish processing industry.

Development on Phu Quoc island is advancing rapidly, with many luxury hotels and an increasing number of tourists coming to enjoy its beaches and seafood delicacies. Hotels and restaurants are seeking fresher fish to meet the demand of tourists who are willing and interested in paying for premium seafood.

In Rach Gia, there are many fish processing companies and they too are looking for fresher fish. In particular they process squid in a large volumes into ready-to-eat forms, mainly for export. They are looking for fresher squid in order to produce higher quality products that they can sell at higher prices.

In Ho Chi Minh City, with rising incomes and a boom in Japanese cuisine, the demand for raw fish dishes like sashimi and sushi continues to grow. While Vietnamese consumers can already eat raw fish dishes at many restaurants in Ho Chih Minh City, this fish is often imported from overseas, such as salmon from Norway.

We visited a Japanese restaurant in Rach Gia that serves a variety of sushi and sashimi, mostly sourced from overseas. Japanese cuisine such as sashimi and sushi is increasingly popular in Vietnam, and demand for raw seafood ingredients sourced from Vietnam is growing

The pilot fishing expeditions in Phu Quoc using the new technologies are expected to be completed by the end of this year. If we can demonstrate capacity to maintain greater freshness in domestically caught seafood compared to conventionally caught seafood, along with strong market demand for fresh seafood at restaurants, hotels and processors, similar initiatives may begin in other regions of Vietnam. If all goes well, in the near future, it might be possible to enjoy delicious sashimi and sushi from domestic Vietnamese fish in many restaurants and hotels across the country.

We were so appreciative to the dozens of Vietnamese seafood end-users who shared their views and experience, including a fish freezer manufacturer in Ho Chi Minh City (left) and the chef of a Japanese restaurant in Phu Quoc (right).

If you are interested in learning more out this project or Meros’ wide range of other experience in Vietnam and in global seafood and fisheries, please don’t hesitate to reach out!

Meros Fieldwork: Japanese premium fruit struggles to stay on top in an increasingly innovative Hong Kong market

After years of aiming at a one trillion yen export goal, in 2021, for the first time, Japanese agricultural, forestry and fishery products’ export value finally exceeded one trillion yen ($9.09 billion USD).

Export Value of Japanese Agricultural, Forestry and Fishery Products (2017-2021)

Source: Japanese Ministry of Agriculture, Forestry and Fisheries

Hong Kong has long been a core market for Japan’s food and agriculture exports and it accounted for about 20% of Japan’s total exports in 2021. In particular, Japanese fruit is very popular in Hong Kong as premium fruit.

There are three main reasons why Japanese fruit has long been considered a premium fruit in the Hong Kong market. First, the fruit itself is considered by consumers to be extremely tasty with a beautiful appearance. Secondly, Japanese fruit tends to be nicely packaged, so  between the appearance of the fruit itself and the attractive packaging, Japanese fruit is often used as a gift in Hong Kong. Finally, Hong Kong consumers’ general image of Japan as a supplier is positive: Japan is considered to be clean and safe with high quality products.

Strawberries, apples, and grapes are especially in high demand, with each export value exceeding two billion yen ($18.18 million USD). In recent years, however, other countries have been putting effort into developing new higher quality varieties, improving growing methods for existing varieties, developing creative gift packaging, and actively marketing their products. As a result, Japan’s position is increasingly under threat.

Meros recently worked in Hong Kong on issues of fruit branding and fruit variety market protections. We looked at three important premium fruit markets and what the rising new suppliers are doing to take on Japan’s long-time lead in the Hong Kong market.

Strawberries in Hong Kong

Japanese strawberries are exported to Hong Kong mainly from winter to spring. Korean strawberries are also exported during this same period. However, according to fruit importers and retailers in Hong Kong, Japanese and Korean strawberries are not in direct competition. The reason is that consumers feel Japanese strawberries are superior in taste and juiciness and are willing to pay higher prices (at the highest end, Amaou, the most common Japanese variety in Hong Kong costs about 130 HKD (16.90 USD) per pack). Korean strawberries are about half the price of Japanese strawberries, but have typically been inferior in taste and juiciness to the Japanese berries. But newer Korean brands and varieties are catching up.

A new variety called Kingsberry, which began to be imported from Korea a few years ago, reportedly has almost the same quality and similar price range as Japanese strawberries. At present, Kingsberry is not a threat to Japan because of its limited supply and low recognition, but Korea appears to be marketing Kingsberry in Hong Kong with Korean government support. If consumers awareness grows and the supply increases in Hong Kong, it is likely to become a strong rival to Japanese strawberries.

Japanese Yuubeni variety strawberries from Kumamoto Prefecture, $109 HK per pack (left) and Korean Berry Licious brand strawberries $89 HK (right) sold side by side in Hong Kong.

Apples in Hong Kong

Japanese apples are exported to Hong Kong mainly from fall to spring. Hong Kong also imports apples from countries other than Japan, including the US, China, and New Zealand. Imports from New Zealand in particular have increased in recent years. New Zealand has been putting effort into developing new varieties and is actively marketing these new apple varieties to other countries. Because New Zealand is located in the southern hemisphere, their apple season is the opposite of Japan, and New Zealand apples are mainly exported from spring to summer. However, improvements in storage technology are lengthening the period when apples can be sold, and the sales periods of Japanese and NZ apples are beginning to overlap. This should be worrying to Japanese apple exporters.

The New Zealand apple brand most commonly available in Hong Kong is Envy. According to importers and retailers in Hong Kong, Envy sales are increasing in recent years because of its good taste, juiciness, and crunchiness, with a price is less than half of the typical Japanese apples. New Zealand also began selling an apple called Rockit, which is very small in size but not much different in price from Japanese apples. Rockit is sold in a unique vertical tube package and makes a good gift. It is already selling well in China among the wealthy. The supply of Rockit in Hong Kong is still limited, but there is no reason to think it won’t increase in the future.

New Zealand’s Rockit apples are marketed in branded plastic cylinder packaging and seem to be good as gifts in Hong Kong.

Grapes in Hong Kong

Japanese grapes are exported to Hong Kong mainly from summer to winter. In recent years, the most popular Japanese grape variety in Hong Kong has been the Shine Muscat. Shine Muscat is also grown in China and Korea and these countries sell during similar months as Japan in Hong Kong. Even though Japan, China and Korea are growing the same variety, there are differences in taste, crispness and size, and Japanese Shine Muscat tends to excel in these aspects.

However, according to local traders, the quality of Chinese Shine Muscat has been improving recently because of the improvement in cultivation methods, and some Chinese grapes are getting close to the Japanese quality level with a price is sometimes less than half of the Japanese Shine Muscat. In addition, Autumn Crisp, a grape brand developed in the US, has become increasingly popular in recent years in Hong Kong. Autumn Crisp is green seedless grape and looks quite similar to Shine Muscat, but is much less expensive.

Until recently, Japanese fruit were far ahead of fruit from other countries in terms of their taste, appearance, packaging, and recognition as premium fruit. However, because of the efforts of other countries, that gap is narrowing. In order to break out of this situation, Japan will need to put effort into developing new higher quality varieties, improving cultivation methods for existing varieties, trying more innovative and unique packaging, and actively marketing their products. Otherwise, there is a strong possibility that Japanese premium fruit will be replaced in Hong Kong by supply from other countries in the not-too-distant future.

Conversely, from the perspective of countries other than Japan, there is potential to gain even more share of the premium fruit market that has long been dominated by Japan. The gift market is particularly large in Hong Kong, where the number of people sending fruit as gifts is increasing, partly due to growing health consciousness. By focusing on packaging and effective marketing, it should be very possible for newer suppliers to take share in the fruit gift market in Hong Kong – and this should be wake up call to Japanese exporters to avoid becoming complacent in the changing Hong Kong market.

Carefully packaged Korean grapes (below) and similarly bright, but less expensive unpackaged Australian grapes (above) may rival Japanese premium Shine Muscat.

What were the high value products that Japan exported to tip it over the one trillion yen mark? Here is Japan’s exports by value by major category in 2021. Within Japan’s global trade, apples rank #13 in value.

Source: Japanese Ministry of Agriculture, Forestry and Fisheries

New!  Revised Meros – USDA Food Export Guides to Japan Online Now

Meros once again teamed up with the US Embassy Japan’s Agricultural Trade Office (ATO) to develop a new revised version of well-received series of export guides originally developed in 2019.  The series details the regulatory requirements for 24 specific products, from cheese to chocolate, seafood to spirits. While the aim of these guides is to support American SMEs who are interested in exporting food products to Japan, the detailed guides can be of interest to food exporters of all backgrounds.

Within the first month of their release in March 2022, the revised guides were downloaded over 1000 times.

The revised guides have added sections on new Japanese policy related to agricultural biotechnology as well as updated tariff schedules for each product to reflect changes that have come about since the US-Japan Trade Agreement came into effect on January 1, 2020.  Other changes include updated product labeling regulations as well as some product-specific changes.

USDA Meros Agricultural Biotechnology Japan Import
New sections include updates on Japan’s regulations on food and food additives derived from agricultural biotechnology.

Exporting to Japan can seem daunting with numerous required forms and official resources not always available in English. In these guides, we take potential exporters step-by-step from pre-embarkation to import clearance and lay out the expected forms and preparations necessary at each stage.

For new food exporters to Japan, common challenges include differences in food additive standards which may mean a product that is allowed for food products in the home country may not always be allowed in Japan.  Japan’s strict, low tolerance standards for agrochemical residues (MRLs) also trips up some potential exporters.  These guides aim to point out some of these common pitfalls in advance, so exporters are better prepared. They are not meant as “do-it-yourself” guides but as a tool to help exporters better navigate the export process together with their Japanese importers and distributors.  

We provide examples of required ingredients lists, manufacturing process charts as well as labeling for each type of product – but it is important for exporters to always keep in mind that requirements can change without notice – especially whenever sanitary or phytosanitary risks are involved. Ultimately, a successful export business to Japan requires ongoing vigilance for regulatory changes, as well as strong relationships with importers and partners in Japan.

Download the guides here.