Oysters

Part
01
of three
Part
01

#1/3: Oysters in the US - trends and issues

The key trends affecting the oyster market in the United States are the use of potato starch to grow oysters, front door delivery system to ensure the freshness of oysters, oyster shell recycling, and diversifying oyster consumption. Challenges in the market include climate change, too much rain, plastic pollution, and issues with bacterial infection.

Trends

1. Potato Starch for growth

The Charlotte Harbor National Estuary Program (CHNEP) has developed a new method of attracting oysters that does not use plastic bags for their oyster beds, but potatoes. Most oyster harvesters use plastic bags to make oyster beds because they are effective in filtering out fresh water. But this method has been proven to be a hazard to the environment. CHNEP, therefore, has developed the method of using potato starch to take the place of the plastic bags. This has become a big part of their oyster restoration project. According to Jennifer Hecker, the executive director of CHNEP, 3D potato starch netting will increase the growth rate of the oysters. Punta Gorda scientists revealed in May 2017, that 380,000 oysters settled in three of their sites that use potato starch netting.

2. Front door delivery

In order to preserve the fresh taste of oysters, reduce the safety risks, and eliminate the many health problems that are associated with commercial oyster distribution, shellfish harvesters like Real Oyster Cult, make front door deliveries of fresh oysters directly from the oyster farm. The present supply chain contains three to five different handlers/dealers who destroy the product due to prolonged time and exposure to warm temperatures. Oyster farmers are increasingly changing their distribution systems to provide easy access to their customers across the country by directly delivering oyster harvests from the farm to the market.

3. Shell Recycling

Oyster shells can be recycled by dumping them back into the ocean after consumption. The shells that are thrown back become homes for baby oysters. Each shell can house over 10 baby oysters. This method can protect the baby oysters during the most vulnerable stages of growth. Currently, recycled oyster shells are used to strengthen the oyster restoration in Chesapeake Bay tributaries, which is the largest restoration project in the United States. Wayne Witzke, working for Shell Recycling Alliance, collects oyster shells from 100-150 restaurants in a week, located in Washington DC, Maryland, and Virginia. The shells are sent to the University of Maryland Center for Environmental Science Horn Point Oyster Hatchery located in Cambridge, where they are aged for over a year. They are then washed with high-pressure hoses and placed in outdoor setting tanks for baby oysters to attach themselves to the shells. According to the operations manager of Shell Recycling Alliance, Tom Price, the amount of shell recycled accounts for over one-third of the total demand of 100,000 bushels every year.

4. Oyster Consumption

The United States has numerous oyster bars that provide customers with variety menus, giving them a unique tasting experience. At 167 Raw, located in Charleston, South Carolina, customers have the opportunity to taste a wide “array of high-quality oysters”. When the customers are not sure of what to order, their chef makes the selection for them and offers them a diverse experience. Cocktail oysters and dollar oyster nights are also a rising trend in oyster bars. This enables oyster farmers to harvest their oysters faster rather than waiting until the oysters each complete market size.

Issues

There are many concerns that are affecting oyster businesses across the country today. Businesses that are technologically advanced with modern facilities are also having trouble dealing with the growing challenges like viruses, bacteria, poisonous algae, salinity fluctuations, increased water pollution with plastic, and warm temperatures, in growing oysters.

1. Too much rain

Oysters require about 10 to 15 parts of salt concentration per million to survive, but in recent years, due to the flooding of freshwater by rains, the concentration level of salt has reduced in certain oyster bed areas in the country to zero. Heavy downpours in areas like Galveston Bay, has caused a large setback in the oyster industry, leading to the production of oysters to decrease from 3.68 million pounds to over 1.57 million pounds during the period 2013 to 2016. Galveston Bay harvests about 80% of the total oysters in Texas, but due to freshwater flooding, the production has decreased to one-third of the total amount.

2. Climate Change

According to a report by Investigate West, the waters of the oceans are turning acidic due to climate change, creating major problems in the growth of oysters and other shellfish. Ocean acidification has reduced the rate of oyster larvae survival to three-quarters of the usual rate. This reduction of survival rate is a huge crisis for oyster growers including the largest shellfish producer in the United States — Taylor Shellfish. A study conducted by the National Oceanic and Atmospheric Administration found corrosive waters on the surface of the Pacific Ocean. The scientists concluded that this was an extreme change in the water conditions which they didn’t expect to see “for another 50 to 100 years”. Acidic water is moving closer to the continental shelf disturbing shellfish and marine life on the nation’s shoreline.

3. Plastic pollution

Plastic pollution is a global issue. According to the Seattle Aquarium, people consuming oysters and other shellfish might be “ingesting up to 11,000 particles of microplastics” every year. With the current trend of consumption, the number could increase to as much as 780,000 microplastic particles every year by the end of the century. It was found that there is an estimated 150 million tons of plastic in the oceans today. The plastic, when broken down into smaller pieces are consumed by marine life like oysters and are then consumed by humans, which in turn causes numerous health problems including death.

4. Bacteria infection

Oyster harvesters and fisheries are on ‘high alert’ due to gastrointestinal illness and other problems that are caused by bacterial infection (Vibrio Parahaemolyticus — VP) in oysters. Bacteria growth in waters is caused not due to pollution but because of warmer temperatures. Bacterial infections have been affecting people in the oyster business for years. According to CDC, VP causes over 80,000 illnesses every year in the country, with over 50,000 of those cases due to contaminated food (which includes the consumption of oysters). The United States government has brought about plans to test and control the conditions of oyster harvests in the country to ensure the control of bacterial infections. The plans are put into motion during the ‘high-risk’ months from May to October of every year since it is during this time that there is a high risk of VP. The DMF (Division of Marine Fisheries) regulates oyster harvesters while the nation’s Public Health regulates the dealers who purchase from the harvesters.

Conclusion

To wrap up, we have identified four key trends and four challenges that are affecting the oyster market in the United States. The use of potato starch to grow oysters, ensuring freshness through front door delivery systems, and recycling oyster shells are some key trends in the market today. People are consuming oysters in diverse ways, with the most trending ways being dollar oysters, cocktail oysters, and oyster bars. Challenges that are currently affecting the oyster market include the pollution of plastic, flooding of rainwater, climate change, and bacteria infection.

Part
02
of three
Part
02

#2/3: Oysters in the US - Market size and growth

The total market size for oysters on the half shell in the United States in 2018 is an estimated $160.4 million and is expected to grow at a CAGR of 2.5% to $190.7 million by 2025. A deep dive of my findings is below

Total oyster market

According to the Maine Farmed Shellfish Market Analysis, the market size for both whole and shucked oysters in the United States in 2016 was $215 million, which represents 895.3 million whole oysters, about 39% of which are shucked for the meat. This market breaks down regionally in the following manner:

650 million oysters worth $104 million come from the Gulf of Mexico
116.4 million oysters worth $38.7 million come from the Mid Atlantic
76.9 million oysters worth $42.9 million come from the Pacific Northwest
47 million oysters worth $27.6 million come from the Northeast
5.1 million oysters worth $1.5 million come from the Southeast

The $215 million market size in 2016, represented just under 11% of the total $2 billion fish and seafood market in the United States ($215,000,000 / $2,000,000,000 = 0.1075).

Whole oyster market

Please note that the information provided on the Seafood Health Facts website is older than Wonder's typical guideline of 24 months, but the information is science-based and has not changed since it was first published. Therefore, I elected to include its definitions of whole and shucked oysters.

Based on information from the Seafood Health Facts website, oysters are sold in two forms: whole and shucked. Whole oysters are required for oysters on the half shell, which are then opened by restaurants and served raw. The Maine Farmed Shellfish Market Analysis report indicates that 59% of the oyster volume and 71% of the oyster value is allocated to whole oysters. The remaining 41% of the volume and 39% of the value is for shucked oysters, the meat of which is the "edible portion removed from the shell and sold in pints, gallons, trays or other containers."

Therefore, the market size for whole oysters, which are necessary for oysters on the half shell is 528,292,000 pieces worth $152,659,000. The breakdown by region is:

325 million worth $55.25 million from the Gulf Coast
94.6 million worth $35.0 million from the Mid Atlantic
61.5 million worth $35.1 million from the Pacific Northwest
44.6 million worth $26.3 million from the Northeast
2.54 million worth $1.0 million from the Southeast

market growth

The Maine Farmed Shellfish report shows the oyster industry in North America as a whole is expected to grow at a CAGR of 2.2% through 2025; however, the United States is projected to outpace that average by a mere 0.03% (2.5% — 2.2%) growing at 2.5% through 2025 (this was calculated by taking the expected growth rates from each of the five regions in the United States, adding them together, and dividing by 5). This growth rate significantly outpaces the projected growth rate of 0.3% for the entire United States fish and seafood market.

In addition, certain regions are projected to grow faster, as "the growth of raw bars and the addition of oysters to menus as a relatively low cost, high margin item that is well-suited for sharing has led to a significant increase in demand for oysters." The report indicates the following growth rates for each region through 2025:

Mid Atlantic: 4.0%
Southeast: 3.0%
Northeast: 2.0%
Gulf: 2.0%
Pacific Northwest: 1.5%

Maine, which is located in the Northeast region, is expected to see its oyster market grow at a CAGR of 10% through 2020 and 6% through 2025. This is due to the rise in popularity of "cocktail oysters," which are smaller than typical oysters on the half shell served as main dishes. In addition, "the Maine oyster is viewed as the preeminent oyster in the marketplace because of water quality and low water temperature." What's more is that as of 2017, oysters have overtaken lobster as Maine's leading seafood product and this trend is expected to continue for the foreseeable future.

Using the 2.5% CAGR for United States oysters, we can calculate the approximate market size for both whole and shucked oysters through 2025:

2016: $215,000,000
2017: $220,375,000 ($215,000,000 x 1.025 = $220,375,000)
2018: $225,884,375 ($220,375,000 x 1.025 = $225,884,375)
2019: $231,531,484 ($225,884,375 x 1.025 = $231,531,484.375, rounded to $231,531,484)
2020: $237,319,771 ($231,531,484 x 1.025 = $237,319,771.11, rounded to $237,319,771)
2021: $243,252,765 ($237,319,771 x 1.025 = $243,252,765.275, rounded to $237,319,765)
2022: $249,334,084 ($243,252,765 x 1.025 = $249,334,084.125, rounded to $249,334,084)
2023: $255,567,436 ($249,334,084 x 1.025 = $255,567,436.1, rounded to $255,567,436)
2024: $261,956,621 ($255,567,436 x 1.025 = $261,956,621.1, rounded to $261,956,621)
2025: $268,505,537 ($261,956,621 x 1.025 = $268,505,536.525, rounded to $268,505,537).

Therefore, we can say that the market size for both whole and shucked oysters in the United States will be worth approximately $268.5 million by 2025.

The growth rate for whole oysters is not mentioned in this report or in any other market report currently available. However, with the main reason for growth is said to be the rise in popularity of oysters on the half shell, we can assume that the majority of the 2.5% CAGR belongs to whole oysters. As such, we can also assume the whole oyster market is expected to grow at approximately the same rate as the market as a whole. Thus, we can calculate the approximate market value through 2025 by multiplying the 2016 market size and each subsequent market sizes by the 2.5% CAGR.

2017: $156,475,475 ($152,659,000 x 1.025 = $156,475,475)
2018: $160,387,362 ($156,475,475 x 1.025 = $160,387,361.875, rounded to $160,387,362)
2019: $164,397,046 ($160,387,362 x 1.025 = $164,397,046.05, rounded to $164,397,046)
2020: $168,506,972 ($164,397,046 x 1.025 = $168,506,972.15, rounded to $168,506,972)
2021: $172,719,646 ($168,506,972 x 1.025 = $172,719,646.3, rounded to $172,719,646)
2022: $177,038,637 ($172,719,646 x 1.025 = $177,037,637.15, rounded to $177,038,637)
2023: $181,464,603 ($177,038,637 x 1.025 = $181,464,602.925, rounded to $181,464,603)
2024: $186,001,218 ($181,464,603 x 1.025 = $186,001,218.075, rounded to $186,001,218)
2025: $190,651,248 ($186,001,218 x 1.025 = $190,651,248.45, rounded to $190,651,248)

Therefore, we can say the market for whole oysters used for oysters on the half shell is currently worth about $160.4 million (2018) and is projected to be worth approximately $190.7 million by 2025.

Conclusion

The oysters on the half shell market is the same as the whole oyster market, which is currently estimated to be about $160.4 million and growing at a CAGR of 2.5% through 2025. Maine's oyster market is expected to experience a significantly higher CAGR, at 6% through 2025.
Part
03
of three
Part
03

#/3: Oysters in the US - Top 5 producers

Pacific Seafood, Goose Point Shellfish Farm & Oystery, AmeriPure, Ward Oyster, and Ballard Fish & Oyster Company are the top five producers of oysters in the US, based on available data.

Since there were no available market reports identifying the top companies, I conducted an exhaustive search for revenue data to compile as much information as possible within the scope of a single Wonder request. However, since searching every relevant company in the US to identify the top five would be outside the scope of one query, I've provided the top five companies among those I was able to research in the allotted time. If you would like us to continue our search for additional companies, please submit a new request, and we'll be happy to pick up where we left off.

METHODOLOGY

I began by looking for existing market reports for the US oyster production industry, but I found no such reports offering insight into the top producers. I also noted in my research that the term 'producer' brought up a lot of varied results, mainly focused on growing, farming, or harvesting oysters. While I found a number of lists of oyster farmers or suppliers, I suspected these were not quite the results you were seeking so I continued my search.

Also, since oysters on the half shell are primarily prepared by a chef or at home using fresh oysters, finding producers of oysters on the half shell, specifically, proved largely elusive. So I searched for lists of oyster producers in general. From my research, it may be that the term 'processing' is more what you are after, so I explored this search strategy as well.

Ultimately, the companies I identified that appeared to meet your criteria are privately-held companies and do not publicly provide information on their revenues or production units. Therefore, I used business data aggregators, such as Owler, Hoovers, and Manta, to attempt to find revenue estimates, but many were unavailable.

FINDINGS

Oysters on the half shell are primarily prepared from fresh oysters, shucked at the time of consumption. Numerous articles and references suggest that oyster growers are increasingly selling their oysters directly to restaurants and consumers. Restaurants use their direct association with growers as part of their marketing tactics to bring in discerning clientele.

Over "130,000 tons of live oysters are harvested each year" in the US, and Louisiana is the top oyster-producing state, accounting for nearly half of the US harvest. In 2014, Louisiana alone produced 12.7 million pounds of oysters in an industry valued at $317 million.

A report on the Louisiana oyster industry states that oyster processors "physically transform oysters" into either half-shell or shucked, noting that "half-shell oysters are whole oysters, in-shell, intended for raw consumption." The processors evaluate the oysters to ensure they are the proper size and will be easy to shuck and clean.

OYSTER PROCESSING COMPANIES

Based on my initial research, I understood your request to be a search for the top oyster processors since these are the companies that prepare oysters for half-shell consumption. Since I found no market reports that offered insight into the key players in the industry, I relied on references to companies in industry articles, as well as the Seafood Source list of oyster suppliers and a list of oyster processors at the Sea-Ex trade seafood directory, which offered 14 US companies. I searched for revenue data for each of these companies, but since they are privately-held companies, revenue information was scarce. Also, some companies appear to no longer be in operation. All the companies listed below cite oyster processing among their offerings.

Pacific Seafood was referenced in numerous articles. They were the largest company I encountered with revenue of $239.41 million, according to Hoovers.

Goose Point Shellfish Farm & Oystery is an oyster farm that offers shucking and shipping. Their revenue is approximately $25.8 million.

AMERIPURE
Based in Louisiana, AmeriPure produces oysters from seed to shipment. Their revenue is approximately $22.3 million.

Ward Oyster is an oyster farm and hatchery that also does its own distribution. It has revenue of $6 million.

BALLARD FISH & OYSTER COMPANY
Ballard Fish & Oyster Company is an oyster farm that also processes its oysters. They have revenue of $5.3 million.

Additional companies for which I found revenue data included the following:

According to Manta, Crimson Bay Seafood has revenue of $2,129,374.

TAYLOR SHELLFISH
According to Owler, Taylor Shellfish has revenue of about $1.1 million.

According to Owler, Cedar Key Seafarms' revenue is under $1 million, but I was unable to find a precise figure.

TROPIC STAR SEAFOOD
Tropic Star Seafood Inc. has estimated revenue of under $1 million, according to Owler. Their website was down for maintenance at the time of this writing.

WANCHESE FISH COMPANY
The Wanchese Fish Company has estimated revenue of under $1 million, according to Owler.

PAGAN RIVER DOCKSIDE SEAFOOD
Pagan River Dockside Seafood has revenue of under $500,000, according to Manta.

Hoovers puts Sun Farm Oysters' revenue at $70,000, while Manta lists it at $74,051. I suspect these figures are quite low, but I was unable to find any other data on this company's finances. Also, I was unable to find a direct website for this company.

CONCLUSION

In conclusion, the top five oyster producers in the US, based on available data, are Pacific Seafood, Goose Point Shellfish Farm & Oystery, AmeriPure, Ward Oyster, and Ballard Fish & Oyster Company.
Sources
Sources

From Part 03