The target market for fish farming consists of four main segments: wholesale, retail, consumer, and restaurants.
If you are considering getting into the fish farming business, you will need to decide which of these market segments to focus on because each segment has its own set of needs, requirements and buying processes.
As the aquaculture industry continues to grow and the market becomes more competitive, it’s critically important that fish farming businesses focus on what they know best and what they can sell. There’s a large variety of fish to choose from. There are different farming methods to choose from. And there are different markets to choose from. Making the right choices can be the difference between success and failure.
In this article, we’ll study each segment of the target market for fish farming and review the purchase decision factors that different types of customers take into account while selecting a fish farm to purchase from.
What is Fish Farming?
If you are considering getting into the fish farming business or are already in it you know what fish farming is. But for the sake of our discussion and to be sure we are on the same page, let’s define fish farming.
We define fish farming as follows:
Fish Farming is the art and science of raising fish for human consumption in a controlled environment.
Fish farming is a type of Commercial Farming and can be performed in ponds, cages, or tanks. The main difference between wild-caught fish and farmed fish is that the latter are raised under controlled conditions.
Target Market for Fish Farming: Who buys from a fish farm?
As we articulated in the introductory paragraph of this article, the target market for fish farming is composed of these main segments:
- Wholesalers
- Retailers
- Consumers
- Restaurants
Let’s look closely at each of these.
Wholesalers
Wholesalers buy from fish farms and sell to retailers. They are an important link in the supply chain because they provide fish farms with the capital necessary to grow their business and meet customer demand.
The main decision factors that wholesalers take into account when buying fish from a farm are price, quality, and quantity.
Wholesalers also supply fish in large quantities to processing plants. Fish processing plants turn the raw product into a variety of finished goods such as canned tuna, fish sticks, and salmon burgers.
Retailers
Retailers are the businesses that sell seafood to consumers. They include grocery stores, fish markets, and online retailers.
Smaller retailers will usually purchase fish from a wholesaler while larger retailers are able to buy fish directly from the fish farm. Some very large retailers may even have their own fish farms.
The main decision factors that retailers take into account when buying seafood are price, quality, variety, and freshness. They also consider the logistics of getting the product from the wholesaler or the fish farm to their warehouses and then from there to the stores. So transportation and storage costs are a factor in their decision-making process.
Consumers
Consumers are people who buy seafood for themselves and their families to eat. They usually buy seafood from retailers either in person or online. But some fish farms also offer to sell fish “direct to consumer” in which case consumers can get their fish straight from the farm.
The main decision factors that consumers take into account when buying seafood are price, quality, freshness, variety, and healthfulness. They want to be sure they are getting good value for their money and that the fish they are eating is healthy and safe for them.
Restaurants
Restaurants buy seafood to cook and serve to their customers. They usually buy fish from wholesalers or directly from the farm. This works out cheaper than buying fish from retailers.
The main decision factors that restaurants take into account when buying seafood are price, quality, and freshness. They also want to make sure they get a good variety of fish to serve their customers. At the minimum, restaurants need the kinds of fish which they regularly have on their menus.
Target Market for Fish Farming: Purchase Decision Factors
In the previous section we saw the main customer segments of the target market for fish farming and we also briefly saw the different purchase decision factors that they take into account while selecting which fish to buy from a fish farm.
Now, let’s list each of those purchase decision factors and take a brief look at them.
- Variety
- Quality
- Quantity
- Price
- Freshness
- Healthfulness
- Transportation & Storage
Variety
Wholesalers and Retailers are most interested in working with fish farms that offer a broad variety of fish. It is much easier for them to work with a few fish farms that can provide them with all the seafood they need than to work with many different fish farms, each specializing in a particular type of fish.
Quality
The quality of the fish is important to all customers in the target market for fish farming. But it is especially important to restaurants because their customers expect to get a certain level of quality when they eat out.
Wholesalers expect a different level of quality for the fish they sell to retailers as opposed to that of the fish they sell to processing plants.
Restaurants are pickier about quality than are consumers are because a restaurant’s reputation (and maybe even its license) depends on the quality of the food it serves.
Consumers too care about quality but could be willing to compromise on it just a bit if they can get a better price for the fish as long as the fish is still fresh, safe and healthy to eat.
Quantity
The quantity of fish that a farm can provide is important to wholesalers because they need to be able to get the seafood they need in the quantities they need it to supply to retailers and processors.
Buying sufficient quantities of fish from a fish farm also means that a wholesaler needs to go to fewer farms to get all the fish they need. Purchasing large quantities of fish also helps optimize transportation and storage costs.
Price
As with any other product that is being bought and sold, price is always an important consideration for customers in the target market for fish farming. But the different segments of this market look at price differently.
Restaurants need to be able to buy fish at a low price so they can make a profit on the dish when they sell it to their customers.
Wholesalers too need to be able to buy fish at a low price so they can make a profit when they sell it to retailers or processors. But unlike restaurants, wholesalers can buy in larger volumes and so can benefit from economies of scale.
Consumers too care about price but are also willing to pay more for fish that is fresh, safe, tasty and healthy to eat.
Freshness
Everyone who purchases fish – from the wholesalers to the consumer – cares about freshness. But for slightly different reasons.
Wholesalers want to buy fish from a farm that can deliver fish that was recently harvested because they will get a better price for it when they resell it to retailers or processors. It also means less time and cost for cold storage.
Retailers like the fish to be fresh because then they can keep it on shelves for a longer period of time without having to worry about it going bad.
Restaurants want fresh fish because they taste better and they can charge more for them. Also, restaurants can claim their fish is fresh and not from the freezer – a marketing benefit.
And Consumers too want fish that is fresh because it tastes better and is healthier for them.
Healthfulness
When we talk about the healthfulness of the fish we talk about two things – how healthy is a certain type of fish (eg salmon Vs tuna) and how healthy is the final dish (fried fish Vs steamed fish).
When purchasing fish from a fish farm everyone looks at the former, ie. the healthfulness of the type of fish and not the latter as the healthfulness (or lack thereof) of the final fish dish depends on the recipe.
While all fish are considered to be healthy in some form or another, certain types of fish are considered to be healthier. For instance, salmon, trout, herring, sardines, tuna and cod are considered healthy fish. And so these fish tend to command the greatest demand from wholesalers, retailers, consumers and restaurants.
Transportation & Storage
The final factor that affects the decision which fish farm to buy fish from is that of transportation and storage costs. This is especially important for the three businesses in the target market for fish farming – wholesalers, retailers and restaurants.
Wholesalers need to be able to transport the fish they buy from a farm to their warehouses and then from their warehouses to retailers and perhaps to restaurants. This needs to be done in an efficient and cost effective way. And because a fish has a “sell by “date, it has to be done fast.
The same applies to retailers who by directly from fish farms. Even though retailers can stock their shelves with fish, the sooner the fish reaches the store after it is harvested the longer it can stay in the store.
Even though restaurants and consumers may not be directly involved in the transportation and storage of fish, it still matters to them because it adds to the final cost that they incur when they buy the fish.
Summary
So, as we can see, the target market for fish farming is composed of a variety of different types of customers who make their purchase decisions based on a variety of factors. The main customer segments are wholesalers, retailers, consumers and restaurants.
The main factors that customers take into account before selecting a fish farm to purchase seafood from are Variety, Quality, Quantity, Price, Freshness, Healthfulness and Transportation & Storage.
As a fish farmer, you will need to select the customer segments you can target the best and then optimize your production processes and marketing strategies to focus on the purchase decision factors that are most important to your target market.
