Can Consumer Preferences Drive Traceability in Seafood Supply Chains?

Editor’s Note: Every year, 40 or so students in the MIT Center for Transportation & Logistics' (MIT CTL) Master of Supply Chain Management (SCM) program complete one-year thesis research projects. The students are early-career business professionals from multiple countries with 2 to 10 years of experience in the industry. Most of the research projects are chosen, sponsored by, and carried out in collaboration with multinational corporations. Joint teams that include MIT SCM students and MIT CTL faculty work on the real-world problems. In this series, Sunitha G. Ray summarizes a selection of the latest SCM research.

Scandals involving the mislabeling of fish, slavery in the fishing industry, and the proliferation of illegal fishing practices have elevated the importance of effective traceability in the seafood supply chain.

However, to what extent do consumers of seafood products really care about traceability? For instance, how many customers in a restaurant worry about the sustainability of the halibut they are served, or whether the fish really is halibut and not an endangered species of grouper? Such issues have a significant influence on demand, and the design of seafood supply chains.

This MIT Center for Transportation & Logistics research project sheds light on consumer attitudes in the U.S. towards the traceability of seafood products. The research included a detailed literature review, a direct market survey that collected 282 responses, and interviews with industry, NGOs, government stakeholders and consumer focus groups.

A fishy story

In 2017, three DNA-based surveys of restaurants in Los Angeles, CA, found seafood mislabeling rates of up to 52%. In 2014, The Guardian newspaper released the results of an investigation that revealed brutal cases of slavery aboard fishing boats in Thailand. Illegal, unreported and unregulated (IUU) fishing contributes to biodiversity loss, food insecurity and global warming.

There is also a huge economic cost associated with illicit practices in the seafood industry. IUU fishing results in an estimated fishing loss of $1.3 billion to $2.1 billion of seafood in the United States. The average annual food recall events in the US have more than doubled in the past decade, with seafood accounting for a third of the total.
Given these problems, how can the seafood industry ensure that its products are sustainably sourced, and not subject to fraudulent practices?
Do consumer preferences matter?

Enter whole-chain seafood traceability. Traceability in the U.S. seafood industry is fraught with many challenges due to the industry's complex, diverse supply chain as well as a high incidence of imports and a lack of standard data vocabulary.

There has been a litany of recent initiatives. These include new policy changes with the introduction of the Seafood Import Monitoring Program (SIMP) in 2017, advocacy from NGOs and industry organizations and the establishment of a global working group called Global Dialogue on Seafood Traceability. However, there are still no common standardized Key Data Elements (KDEs) that fulfill the informational needs of all the three primary drivers of traceability: regulatory authorities, supply chain actors and consumers.

While government and industry drive existing traceability implementations, the role of consumers as a driver remains largely unexplored. Consumers are demanding information about quality standards, freshness, and sustainability practices about the fish they purchase. But these credence attributes are difficult for consumers to obtain and are not a priority today.
However, consumers can drive a change in behavior in the industry. Their power was demonstrated in the 1990s, when a video of dolphins harmed during tuna fishing went viral in the media and consumers boycotted tuna purchase during the “dolphin-safe tuna” campaign. In 2015, the mislabeling of cod declined from 34% to 0% in Irish supermarkets after extensive media coverage raised public awareness.

The MIT Supply Chain research shows that consumer preferences do carry some weight on seafood traceability KDEs. However, it is not big enough to influence standards and global practices. There may be several reasons for this conundrum, such as constraints in the purchasing ability of consumers, too many intermediaries who wield influence over the supply of seafood, and deliberate masking of awareness about seafood's challenges.

Interestingly, the research results also show that specific demographic and social characteristics of consumers – such as the frequency of consumption, affluence, education and urban coastal habitats – drive higher preferences for traceability. The findings show that as consumers become educated, they become more affluent, which results in higher consumption of seafood. It can be inferred that populations of consumers who consume seafood frequently (i.e., a few times a month) care more about traceability, and this attitude triggers a higher propensity to pay a premium for high-traceability KDEs.

The future of traceability

There's a lot that can be done to move the needle forward on traceability, such as educating consumers and mid-level supply chain actors, policies continuously calibrated to changing industry and consumer needs, further research including identification of all drivers and stakeholders, and developing global minimum viable KDEs that take local factors into account.

Seafood traceability systems are an essential part of informational governance. An integrated approach to harmonizing KDEs will not only reinforce traceability and informational governance, but also result in more traceability implementations, higher adoption rates and sustainable practices globally.

The SCM research project U.S. Consumer Preferences for Seafood Traceability was authored Sunitha G. Ray and supervised by Dr. Alexis Bateman, Research Scientist, MIT CTL, and Director, MIT Sustainable Supply Chains. For more information on the research please contact Alexis Bateman at: [email protected] or Sunitha Ray at [email protected].

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