Implementing traceability could unlock USD 600 billion for the fishing industry

“Where does your fish come from? Did its production contribute to the destruction of ecosystems? Was it caught illegally, or by slaves? Very often, it is hard to know.”

This is, how Planet Tracker, a non-profit financial think tank begins its “How to Trace $600 billion” report. These are very important questions asked by more and more consumers, which increases the desire of retailers as well to know more about the origin and the supply chain processes of the seafood products.

The report estimates, that the global seafood supply chain (all companies) generated a revenue of USD 1.8 trillion in 2020. Implementing traceability could provide several benefits like

• increased sales volume (buying traceable fish decreases the risk of illegally harvested, or bad quality products for the producers/retailers)
• increased price (according to surveys, consumers are willing to pay premium price for traceability information attached to the retail product)
• reduced direct costs of food recalls (several pilots had shown that traceability programs can decrease the cost of recalls by 60–90%)
• reduced staff costs (an integrated end-to-end solution removes the necessity to collect the same information at each supply chain company).

As they calculate, the increase in valuations of global seafood supply chain corporates could reach USD 600 billion, if the fishing industry would invest 1% of seafood sales value in traceability.

Then why isn’t it possible to trace back every fish to a farm or fishing vessel, yet?

Here comes an important metrics: according to the report,

only 29% of the current global seafood production is traceability ready in volume terms.

The term, “traceability ready” means that the fish is

a) harvested in a way that makes it acceptable for the harvester to be associated with its production (i.e. it is not too unsustainable or illegal), and

b) caught or farmed in an area where the challenges of implementing a traceability solution (levels of corruption and digitalisation) can be overcome.

And 71% of the global seafood production doesn’t fit in this “traceability ready” category.

Actually, according to the World Benchmarking Alliance’s Seafood Stewardship Index, the analysis of the largest 30 seafood companies shows, that none of the companies in the benchmark provided detailed explanations or evidence of implemented traceability systems that cover 100% of a company’s seafood portfolio as of 2020.

So what does the report suggest to overcome this challenge?

The report suggests two ways to improve the situation:

1. The financial backers of all of these companies need to improve the situation by introducing traceability-linked loans, which in practice, means companies would make time-bound commitments to achieve a certain level of traceability by a certain date. There could be proper KPIs set to measure if the companies fulfilled their commitments. In case a company achieved their target, the interest of the load could be reduced to make it compelling.
   This action would both to reduce the financial backer’s risk and to improve the fishing industry’s performance.
2. The other possibility is that traceability-related regulation tightening has the potential to improve the situation, by adding more and more details to the required data points which needs to be collected throughout the supply chain.

Our thoughts

Blockchain based, end-to-end traceability could provide several benefits for the fishing industry. Blockchain, as an immutable, decentralized technology to store and exchange critical tracking events data, a wide range of tools to collect the data throughout the supply chain, a logical structure of identification according to international standards are all components of a solution provided by TE-FOOD.

Read the whole report here:
https://planet-tracker.org/wp-content/uploads/2022/09/How-to-Trace-USD600-billion.pdf

TE-FOOD is the world’s largest publicly accessible, farm-to-table food traceability solution. Started in 2016, it serves 6000+ business customers, and handles 400,000 business transactions each day.

Website: www.te-food.com