Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Assessing Metro Niche Market
Demand for North Carolina
Mariculture Products
Christopher F. Dumas, Ph.D.
Professor of Economics
Department of Economics and Finance
University of North Carolina Wilmington
James D. Wilde
Graduate Research Associate
Master of Marine Science Program
University of North Carolina Wilmington
Black Sea Bass, Centropristis striata
June 15, 2009
Funded by North Carolina Biotechnology Center Regional Development Grant Program
Grant No. 2008-RDG-4003. Supplemental funding from North Carolina Sea Grant minigrant
program 2008. Cost share support from Center for Business and Economic Services, University of
North Carolina Wilmington. In-kind support from Aquaculture Program, Center for Marine Science,
University of North Carolina Wilmington.
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
ADDITIONAL COPIES OF THIS REPORT
Copies of this report may be obtained from:
North Carolina Biotechnology Center
15 T.W. Alexander Dr.
PO Box 13547
Research Triangle Park
North Carolina 27709-3547
USA
PHONE: 910-541-9366
PHOTO CREDITS
Fish illustration on cover by Duane Raver, Jr. from the book Fisherman's Guide--Fishes of the
Southeastern United States. 2008.
All photos in text: Mr. James Wilde, Graduate Researcher, Center for Marine Science, University of
North Carolina Wilmington, Wilmington, NC. 2008-2009.
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
TABLE OF CONTENTS
EXECUTIVE SUMMARY .......................................................................................................................................................... v
INTRODUCTION ....................................................................................................................................................................... 1
SIGNIFICANCE TO THE REGION ........................................................................................................................................ 2
STUDY GOALS AND OBJECTIVES ...................................................................................................................................... 2
STUDY METHODOLOGY ........................................................................................................................................................ 3
BSB Fish Sample Production Methods .......................................................................................................... 3
Pre-trial Survey ....................................................................................................................................................... 3
BSB Farvest and Shipping Methods ................................................................................................................ 4
Survey Sample Frame ........................................................................................................................................... 4
Survey ......................................................................................................................................................................... 6
Product Attributes ................................................................................................................................................. 6
Restaurant Characteristics ................................................................................................................................. 7
BSB Prices.................................................................................................................................................................. 7
Regression Analysis .............................................................................................................................................. 7
RESULTS ...................................................................................................................................................................................... 9
Numbers of Seafood/Sushi Restaurants and Survey Sampling Rates .............................................. 9
Percentage of Seafood/Sushi Restaurants in Upscale Niche Market ................................................ 9
Survey Response Rates ........................................................................................................................................ 9
Estimated Numbers of Upscale Niche Market Restaurants by Metro Area ................................... 9
Niche Market Restaurant Characteristics .................................................................................................. 10
Fish Purchasing Preferences and Behavior ............................................................................................... 10
Desirable Fish Product Characteristics ....................................................................................................... 10
Comparable/Substitute Fish Species ........................................................................................................... 11
Product Availability ............................................................................................................................................. 11
Product Form (Live Whole, Fresh Whole, or Frozen Fillet) ............................................................... 11
BSB Product Characteristics and Preferred Preparation Methods ................................................. 12
Product Origin, Production, Promotion and Labeling Characteristics ........................................... 12
Monthly Demand Model for Black Sea Bass in Metro Niche Markets ............................................. 13
Estimates of Metro Niche Market Demand ................................................................................................ 15
An Extended Example for the New York City Niche Market .............................................................. 15
DISCUSSION AND CONCLUSIONS ................................................................................................................................... 16
REFERENCES ........................................................................................................................................................................... 21
APPENDIX 1 -- Survey Instrument..................................................................................................................................79
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
TABLES ...................................................................................................................................................................................... 23
Table 1. Survey Sampling Rates by Metro Area. .............................................................................................. 24
Table 2. Percentage of Seafood/Sushi Restaurants in Niche Market by Metro Area. ....................... 24
Table 3. Survey Response Rates by Metro Area. .............................................................................................. 25
Table 4. Estimated Total Number of Seafood/Sushi Restaurants in Niche Market by Metro Area.
............................................................................................................................................................................................... 25
Table 5. Upscale Niche Seafood/Sushi Restaurant Characteristics, All Four Cities ........................... 26
Table 6. Upscale Niche Seafood/Sushi Restaurant Characteristics, New York City ........................... 27
Table 7. Upscale Niche Seafood/Sushi Restaurant Characteristics, Philadelphia .............................. 27
Table 8. Upscale Niche Seafood/Sushi Restaurant Characteristics, Atlanta ......................................... 28
Table 9. Upscale Niche Seafood/Sushi Restaurant Characteristics, San Francisco ............................ 28
Table 10. Chefs' Assessment of Relative Importance of Black Sea Bass Product Attributes for
Consumer Acceptance. ................................................................................................................................................ 29
Table 11. Chefs' Preferred Preparation Methods for Black Sea Bass. ..................................................... 30
Table 12. Descriptive Statistics for Variables Used in Market Demand Regression Analysis--All
Metro Areas Combined ................................................................................................................................................ 31
Table 13. Descriptive Statistics for Variables Used in Market Demand Regression Analysis--New
York City ............................................................................................................................................................................ 32
Table 14. Descriptive Statistics for Variables Used in Market Demand Regression Analysis-Philadelphia ..................................................................................................................................................................... 33
Table 15. Descriptive Statistics for Variables Used in Market Demand Regression Analysis-Atlanta ................................................................................................................................................................................ 34
Table 16. Descriptive Statistics for Variables Used in Market Demand Regression Analysis--San
Francisco ........................................................................................................................................................................... 35
Table 17a. Multiple Regression Model Results. ............................................................................................... 36
Table 17b. Multiple Regression Model Results (continued) ........................................................................ 37
Table 18a. Estimates of mean monthly upscale niche seafood/sushi restaurant demand for
farm-raised BSB by metro city and season.1 ...................................................................................................... 38
Table 18b. Estimates of mean annual upscale niche seafood/sushi restaurant demand for farmraised BSB by metro city.1 .......................................................................................................................................... 38
FIGURES..................................................................................................................................................................................... 39
Figure 1. Restaurant Seating Capacities Across All Sampled Niche Restaurants in All Four Metro
Areas (N=115)................................................................................................................................................................. 40
Figure 2. Average Entrée Prices Across All Sampled Niche Restaurants in All Four Metro Areas
(N=114). ............................................................................................................................................................................ 41
Figure 3. Type of Clientele for All Sampled Niche Restaurants in All Four Metro Areas (N=120)
............................................................................................................................................................................................... 42
Figure 4. Fish Purchasing Frequency for All Sampled Niche Restaurants in All Four Metro Areas
(N=120) ............................................................................................................................................................................. 43
Figure 5. Current Black Sea Bass Market Penetration Across All Sampled Niche Restaurants in
All Four Metro Areas (N=120) ................................................................................................................................. 44
Figure 6. Importance of Fish Size to Restaurant Chefs in Niche Market (N=97)................................. 45
Figure 7. Chefs' Preferred Black Sea Bass Fish Size (N=120) ...................................................................... 46
Figure 8. Chefs' Willingness to Purchase Smaller-Sized Black Sea Bass (N=120) .............................. 47
Figure 9. Chefs' Willingness to Purchase Smaller-Sized Black Sea Bass at a Discounted Price
(N=120) ............................................................................................................................................................................. 48
Figure 10. Importance of Fillet Yield to Restaurant Chefs in Niche Market (N=97) .......................... 49
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 11. Chefs' Assessments of Comparable/Substitute Fish Species for Black Sea Bass
(N=120) ............................................................................................................................................................................. 50
Figure 12. Importance of Continuous Availability (of fish supply) to Restaurant Chefs in Niche
Market (N=98) ................................................................................................................................................................ 51
Figure 13. Percentage of Chefs Reporting Problems with Availability of Comparable/Substitute
Fish (N=120) .................................................................................................................................................................... 52
Figure 14. Percentage of Chefs Reporting Problems with (Ocean-caught) Black Sea Bass
Availability (N=120) ..................................................................................................................................................... 53
Figure 15. Importance of Live (vs. Fresh/Chilled) Product Form to Restaurant Chefs in Niche
Market (N=98) ................................................................................................................................................................ 54
Figure 16. Importance of Fresh/Chilled (vs. Frozen) Product Form to Restaurant Chefs in Niche
Market (N=98) ................................................................................................................................................................ 55
Figure 17. Chefs' Preferred Product Forms (N=120) ..................................................................................... 56
Figure 18. Percentage of Chefs Interested in Purchasing Frozen Fillets (N=120) ............................. 57
Figure 19. Importance of Product Taste to Restaurant Chefs in Niche Market (N=97) ................... 58
Figure 20. Importance of Product Freshness to Restaurant Chefs in Niche Market (N=97) .......... 59
Figure 21. Importance of Product Visual Appearance to Restaurant Chefs in Niche Market
(N=97) ................................................................................................................................................................................ 60
Figure 22. Importance of Product Skin Color to Restaurant Chefs in Niche Market (N=97) ......... 61
Figure 23. Importance of Product Flesh Color to Restaurant Chefs in Niche Market (N=97) ....... 62
Figure 24. Importance of Product Texture to Restaurant Chefs in Niche Market (N=97) .............. 63
Figure 25. Importance of Product Fat Content to Restaurant Chefs in Niche Market (N=97) ....... 64
Figure 26. Chefs' Preferred Product Fat Content (N=120) ........................................................................... 65
Figure 27. Importance of Number of Bones to Restaurant Chefs in Niche Market (N=97) ............ 66
Figure 28. Importance to Restaurant Chefs in Niche Market of Product Having Empty Digestive
Tract When Shipped (N=98) ..................................................................................................................................... 67
Figure 29. Importance of Domestic Product Origin to Restaurant Chefs in Niche Market (N=97)
............................................................................................................................................................................................... 68
Figure 30. Importance of Certification of Product Origin to Restaurant Chefs in Niche Market
(N=97) ................................................................................................................................................................................ 69
Figure 31. Importance of Product Traceability to Restaurant Chefs in Niche Market (N=97) ...... 70
Figure 32. Importance of Farm-Raised Production Method to Restaurant Chefs in Niche Market
(N=97) ................................................................................................................................................................................ 71
Figure 33. Importance of Ocean-caught Production Methods to Restaurant Chefs in Niche
Market (N=97) ................................................................................................................................................................ 72
Figure 34. Chefs' Preferred Production Method (N=120) ............................................................................ 73
Figure 35. Importance of Organic Production Methods to Restaurant Chefs in Niche Market
(N=97) ................................................................................................................................................................................ 74
Figure 36. Importance of Product Promotion by Grower/Supplier to Restaurant Chefs in Niche
Market (N=97) ................................................................................................................................................................ 75
Figure 37. Importance of Nutritional Labeling to Restaurant Chefs in Niche Market (N=97) ...... 76
Figure 38. Importance of Quality Certification to Restaurant Chefs in Niche Market (N=96) ...... 77
Figure 39. Estimated New York City Niche Market Demand Curve for Farm-Raised Black Sea
Bass...................................................................................................................................................................................... 78
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EXECUTIVE SUMMARY
Consumer demand for seafood products is growing both within the US and overseas, while the
supply of seafood is shrinking due to overfishing and restrictions on ocean harvests. Mariculture,
farming seafood products on land, is a rapidly growing industry that seeks to exploit this market
opportunity. North Carolina (NC) universities are leaders in the development of the biotechnology
needed to farm saltwater fish. The Black Sea Bass (BSB), Centropristis striata, is an example of a
high-value, high-demand marine finfish under development as a viable candidate for commercial
aquaculture. The traditional high-value retail market for BSB is characterized as a "niche" market
of upscale, gourmet, white table-cloth seafood and sushi restaurants (Berlinsky et al. 2000,
Copeland et al. 2005). In this study, the upscale niche restaurant market for BSB is defined as those
seafood-serving, non-buffet restaurants with an average dinner entrée price greater than or equal
to $12. A study of the potential niche market for BSB in NC found excellent chef acceptance of the
farm-raised BSB product and good demand at prices that would be profitable for NC growers, based
on NC production cost studies. The present study builds on the promising results of the NC study to
assess high-value, niche market restaurant demand for NC-farmed BSB in four metropolitan areas:
New York City, Philadelphia, Atlanta and San Francisco.
A random sample of restaurants in the niche market was selected from each city. Restaurants were
contacted by telephone and appointments made for each restaurant chef to assess NC farm-raised
BSB in the chef’s restaurant kitchen. (Researchers at the University of North Carolina Wilmington
grew the BSB used in the study in pilot-scale facilities located in Wrightsville Beach, NC.) The
product was delivered via next day air or in person by a graduate research associate in the field
(depending on the chef’s wishes) to the restaurant for assessment. The chefs prepared the product
as desired and completed a survey. Survey data were assessed to determine the characteristics of
restaurants and customers in the niche market, desirable BSB product characteristics, and niche
market demand for BSB.
A total of 857 seafood/sushi restaurants were identified in New York City, 490 in
Philadelphia, 653 in Atlanta, and 714 in San Francisco.
Not all seafood/sushi restaurants met the criteria for being in the "upscale" niche market.
In New York City, 273 (36%) of seafood/sushi restaurants were in the upscale niche
market, 87 (19%) in Philadelphia, 85 (13%) in Atlanta, and 294 (41%) in San Francisco.
Thirty completed surveys were obtained from each metro city (subsequent analyses were
adjusted for different sampling rates across cities). Survey response rates varied from 49 to
75 percent across cities.
Average seating capacity per restaurant was 139.6, average dinner entrée price was $24.71,
the percentage of restaurant sales attributable to fish averaged 22.8 percent, and all
restaurants in the sample were open year-round (no restaurant in the sample waas open
only seasonally).
Most (42%) restaurants in the niche market purchase fish on a daily basis, with the
remainder purchasing fish weekly and daily.
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Over 60 percent of customers were local city residents, while about 18 percent were local
suburban residents, and about 14 percent were tourists.
About 25 percent of niche restaurants reported that they currently purchase BSB (when
available from ocean fisheries). About 81 percent reported that they would purchase farmraised Black Sea Bass if available at a price similar to that of comparable fish species, while
88 percent reported that they would buy BSB if it were available for a price twenty percent
lower than that of comparable fish.
Chefs reported that BSB could be considered a comparable/substitute product for a variety
of fish species, but snapper, grouper and striped bass were the most commonly reported
comparable fish.
Over 20 percent of chefs had experienced problems with the availability of fish comparable
to BSB, and over 40 percent had experienced problems with availability of ocean-caught
BSB.
Although many chefs currently have a preference for ocean-caught fish, a substantial
percentage (52 percent) either prefer farm-raised fish or are willing to substitute farmraised fish for ocean-caught.
The vast majority of chefs preferred fresh/chilled fish instead of live fish or frozen fish
fillets. The most-preferred preparation methods were sautéed (37 percent of chefs) and
baked (13 percent). Sushi, sashimi, and "other" were the next-most popular methods, with
11 percent of chefs selecting each.
Fish size (whole weight in pounds) was deemed very important by chefs, with the
optimal/preferred fish size being 1.5 to 2.5 lbs. Relatively few chefs were interested in fish
1 lb or less in size, even at a discounted price. Those chefs interested in smaller fish were
located in New York City and Philadelphia.
Chefs rated taste and freshness as the most important product characteristics. Visual
appearance of the product was very important, emphasizing the need for careful handling
when harvesting, packing and shipping fish. Skin color, flesh color, and texture also
received high importance rankings, while fat content and number of bones were of
moderate importance. With respect to fat content, most chefs preferred a moderate to high
fat content. Chefs' opinions were mixed on the importance of the product having an empty
digestive tract, organic production methods, and quality certification. Chefs thought that
nutrition labeling and product promotion/advertising by the fish suppliers were relatively
unimportant. Domestic origin/production and certification of product origin were of only
moderate importance to chefs.
Three statistical regression models were developed to estimate demand for farm-raised
BSB in niche metro markets. BSB price, restaurant seating capacity, and season of the year
have statistically significant effects on BSB demand, but average entree price, the
percentage of fish sales in overall restaurant sales, and availability problems with substitute
species do not.
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Taking the New York City niche market as an example, the regression model results indicate
that an increase in BSB price from $5.39/lb. to $7.00/lb. decreases BSB purchases from
29.63 lbs./month per restaurant to 17.5 lbs./month (assuming the price of substitute fish is
$5.39/lb. the average price of substitute fish in the city). Similarly, lowering BSB price to
$4.00/lb. increases BSB purchases to 40.75 lbs./month on average per restaurant. At a BSB
price of $5.39/lb., for every 100-seat increase in seating capacity in a New York City niche
market restaurant, farm-raised BSB purchases increase by 12.5 lbs./month for that
restaurant, on average.
Across all metro areas, restaurants purchase significantly more BSB in the summer season
relative to the fall, winter and spring seasons. When factors such as seating capacity and
season are the same, the number of pounds of BSB purchased per month per restaurant in
any of the three cities is approximately the same. However, the number of restaurants and
the average seating capacity of restaurants vary across cities, so aggregate demand for BSB
varies across cities.
Assuming that farm-raised BSB are sold whole, fresh/chilled, 1.5-2.5 lb. in size, at prices
equal to the average prices of comparable/substitute fish in each metro area, mean annual
estimates of aggregate niche market demand range from 97,066 lbs./year for New York City
to 21,972 lbs./year for Atlanta. Estimated annual demand from just these four metro cities
totals over 218,000 pounds per year. It is important to emphasize that this is an estimate of
niche market demand only; additional demand would also exist through other market
channels but probably at lower prices.
In summary, there is significant demand for farm-raised black sea bass in upscale niche
metropolitan markets at prices that would be profitable to NC growers based on current estimates
of production costs. Continued biotechnology research focused on improving BSB growth rates via
diet, nutrition and light/temperature optimization will likely increase production efficiency, leading
to lower production costs, and making the product more affordable for consumers and more
profitable for growers. Improvements in production, processing, and distribution efficiencies may
further reduce costs. Alternative packaging, branding and species-specific value-added processing
options may increase the value of the product. Finally, information on market demand for farmraised BSB in international markets (e.g., Hong Kong) would be valuable to assess potential export
demand for farm-raised BSB.
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INTRODUCTION
Consumer demand for seafood products is growing both within the United States and overseas,
while the supply of seafood is shrinking due to overfishing and restrictions on ocean harvests.
Mariculture, farming seafood products on land, is a rapidly growing industry that seeks to exploit
this market opportunity. Marine fish species, such as flounder and black sea bass, command higher
market prices than do freshwater species such as catfish and tilapia, yet saltwater fish have been
much harder to produce in a farm environment. North Carolina (NC) universities are leaders in the
development of the biotechnology needed to farm saltwater fish. Techniques for spawning adults,
raising juvenile fish, and cost-effectively growing adult fish to market size have been developed in
NC for both flounder and black sea bass (Berlinsky et al. 2000, Copeland and Watanabe 2006,
Copeland et al. 2002, 2003, 2005). Current biotechnology projects focused on the mariculture
industry include: (1) the development of genetic techniques to breed female-only populations
(females grow faster), (2) the development of the micro-scale equipment necessary to raise and
feed microscopic live prey for larval fish, (3) the development of environmentally-friendly water
cleaning and regeneration processes involving bio-engineering, and (4) the development of
alternative, nutritious, and low-cost fish feeds (including “organic” feeds for the organic foods
market) based on NC field crops and by-products.
The Black Sea Bass (BSB), Centropristis striata, is an example of a high-value, high-demand marine
finfish under development as a viable candidate for commercial aquaculture. The BSB is a
historically popular seafood fish that is endemic to continental shelf waters from Massachusetts to
Florida (Musick and Mercer 1977, Sedberry 1988). As such, it is an economically important
commercial fishing species for many east coast states. In NC, the 2006 commercial landing value
for BSB exceeded $1.7 million (NMFS 2006). In recent decades, however, overfishing and more
stringent commercial fishing regulations have significantly reduced ocean fishery landings of BSB
(NMFS 2007). Moreover, stock status reports for the fishery indicate that although BSB stocks are
beginning to recover, landings will be regulated for the indefinite future (NMFS 2007). Limited
availability of ocean-caught BSB seafood products, a high market price relative to many other fish
species, and evolving buyer preferences for new seafood products (Jensen 2006, Olsen 2004)
suggest that a farm-raised BSB industry may have a promising economic outlook in NC. Together,
these trends provide reasonable justification for an investigation of the potential demand for farmraised BSB in large metropolitan markets.
NC entrepreneurs are preparing to invest in commercial-scale mariculture facilities, but an
assessment of market demand and pricing is needed to optimize scale and growth of this new
industry in NC. The traditional high-value retail market for BSB is characterized as a niche market
of upscale, gourmet, white table-cloth seafood and sushi restaurants (Berlinsky et al. 2000,
Copeland et al. 2005). BSB production costs (Copeland et al. 2005, Dumas et al. 2007a, 2007b) and
demand for farm-raised BSB in the NC niche seafood restaurant market have been investigated
(Wilde 2008, Wilde et al. 2008). The NC study found excellent chef acceptance of the farm-raised
BSB product and good demand at prices that would be profitable for NC growers, based on NC
production cost studies (Wilde 2008). The present study builds on the promising results of the NC
study to assess high-value, niche market restaurant demand for NC-farmed marine fish in the much
larger markets of selected metropolitan cities: New York City, Philadelphia, Atlanta and San
Francisco, using restaurant survey/product trial methods developed and tested in NC.
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SIGNIFICANCE TO THE REGION
Mariculture techniques developed in NC use recirculating technology and innovative waste
treatment methods that minimize water requirements, require no water treatment lagoons, and
result in near zero water discharge. Although saltwater fish are produced, a coastal location is
unnecessary, as water is re-circulated and a continuous supply of saltwater is not needed—
therefore, mariculture facilities can be located anywhere in the state, providing a production
alternative for NC farmers. The University of North Carolina Wilmington is working with a local
entrepreneur to develop a full commercial scale demonstration mariculture facility for black sea
bass production to be located on the entrepreneur's land in Wilmington, NC. This facility will
develop production protocols for full scale production, transfer technology from the university to
fish farmers, and demonstrate production costs to lending institutions. Assessing the high-value
niche market demand is critical to NC start-up companies as they make decisions regarding
production volume, marketing channels, and product pricing. Study results provide NC fish farmers
with estimates of market demand for black sea bass from the high-value, fresh—chilled,
metropolitan direct market channel and will determine the impact of product pricing on demand.
Study results promote expansion of the mariculture industry in NC by reducing uncertainty
surrounding potential market demand and pricing. The study will save fish farmers money by
eliminating the need for each farmer to pay for a market demand study; study results will be made
available to all potential farmers. Such information is critical for obtaining business loans from
banks.
STUDY GOALS AND OBJECTIVES
Restaurant niche market demand for NC-grown fresh BSB was assessed in four metropolitan areas
(New York City, Philadelphia, Atlanta and San Francisco) via a field survey of restaurant chefs.
Following the methodology developed by Wilde (2008) for assessment of restaurant niche market
demand for fish via field surveys (see example survey in Appendix 1), upscale seafood restaurants
were identified in each metropolitan area based on restaurant lists obtained from YellowPages.com.
A random sample of restaurants was selected from the list developed for each city. Restaurants
were contacted by telephone and appointments made for each restaurant chef to assess the new
product (maricultured BSB) in the chef’s restaurant kitchen. The product was delivered via next
day air or in person by a graduate student researcher in the field (depending on the chef’s wishes)
to the restaurant for assessment, together with a survey form. Fresh, maricultured BSB were
available from UNC-Wilmington mariculture facilities throughout the summer, fall and winter of
2008-2009. Chefs prepared the product as desired, completed the survey form and returned the
form to the investigators. Survey data were assessed using regression analysis to estimate
restaurant niche market demand for BSB in metropolitan areas. Results included estimates of
pounds of BSB purchased per restaurant per month and the influence of control variables on
pounds purchased. Control variables included restaurant seating capacity, average entree price,
season of the year, BSB price per pound, etc.
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STUDY METHODOLOGY
BSB Fish Sample Production Methods
Approximately 500 hatchery-reared BSB were grown in an outdoor, two-tank recirculating
aquaculture system (RAS) (see Carroll et al. 2005 for a detailed description of the RAS) to provide
fresh, farm-raised BSB product for the study. Individual tank stocking densities were maintained as
suggested by Copeland et al. (2003). Water conditions of 19-23° C, neutral pH and 33-34 g/L
salinities were maintained to ensure optimal environmental parameters. Multiple daily feedings of
commercial marine finfish pellets to apparent 100 percent satiation were administered 6-7
days/week and growth was monitored regularly until a target average market size of greater than
or equal to 567 g (1.25 lb) (per whole, individual BSB) was achieved.
Black Sea Bass pilot scale production facility, UNC-Wilmington, Wrightsville Beach, NC.
Pre-Trial Survey
A pre-trial survey of ten local (Wilmington, NC) upscale seafood and sushi restaurants was
conducted to help identify appropriate niche markets and the attributes associated with them, such
as average dinner entrée price and survey response rates. The pre-trial survey also provided
important feedback used to clarify survey question wording, establish sample sizes, and improve
sample packing and shipping methods.
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BSB Harvest and Shipping Methods
BSB were purged of feed 1-7 days prior to harvest and all commercial chemical treatments were
withheld from the RAS for the duration of the study. Market-sized BSB (greater than or equal to
567g (1.25 lb)) were harvested from tanks and euthanized using a humane, IACUC-approved
(www.iacuc.org) method that utilizes a standard commercial “chill-kill” technique for coretemperature reduction via a dense slurry of ice and fresh seawater. From one to six whole fish
were then packaged immediately to be shipped and received by restaurants within 24 hours of
harvest. Ultra-fresh BSB shipments were made using priority overnight commercial deliveries with
standard seafood shipping materials including corrugated cardboard boxes packed with Styrofoam
seafood boxes or inflatable “Coldpack” (www.coldpacksystem.com) systems. Thick, tightly-sealed
plastic seafood shipping bags store the BSB products within packages to ensure freshness and
prevent fin punctures that could potentially compromise product and shipment quality. Several
pre-frozen gel packs were packed with the product to control internal shipping temperatures. (BSB
were never shipped on ice based on pre-trial experience indicating a potential for reduced product
quality due to pools of freshwater from melted ice.) Shipping boxes were labeled “perishable” on
all outward-facing sides and sealed envelopes containing the survey instrument, return envelopes
and the appropriate contact information were taped conspicuously to the top of each box alongside
pre-printed shipping invoices. Phone calls were made to restaurants following shipments to verify
that the product arrived fresh and without incident.
Graduate researcher James Wilde harvesting farm-raised Black Sea Bass.
Survey Sample Frame
A sample frame (list) of seafood and Japanese/sushi restaurants was developed for each metro area
based on restaurant listings obtained from YellowPages.com in the summer of 2008. The
YellowPages.com website provided contact information (restaurant name, address, phone number)
for all restaurants in a given city, and provided separate lists of restaurants by category, including a
list of seafood restaurants, and a list of Japanese/sushi restaurants. The website also featured links
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
to restaurant webpages and, in many cases, pdf files of the full menus of the restaurants. The
YellowPages.com website listed 13,232 restaurants in New York City, of which 474 were
Japanese/sushi restaurants and 623 were seafood restaurants for a total of 857 seafood/sushi
restaurants. Similarly, 490 seafood/sushi restaurants were identified in Philadelphia, 653 in
Atlanta, and 714 in San Francisco. For each city, the seafood restaurant and Japanese/sushi
restaurant lists were pooled, and duplicate listings were dropped. Each restaurant listing was then
screened to ensure (1) the restaurant was not primarily a buffet (low quality fish), and (2) the
average dinner entree price was at least $12. These screens eliminated fast food and other
restaurants that were outside the high-value niche market.
Niche market seafood restaurant in Philadelphia.
Niche market sushi restaurant in New York City.
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Survey
Restaurants were drawn at random from the screened sample frame lists, contacted, and asked to
participate in the survey. In-person field survey interview appointments are made with the
restaurant chef and/or fish buyer. On the appointment day, the survey was conducted at the
participating restaurants using fresh black sea bass product samples shipped overnight from the
UNC-Wilmington mariculture facilities to the restaurant. A field surveyor explained the
study/survey to each survey respondent, and restaurant chefs were allowed to prepare the sample
BSB fish prior to survey completion. Additional restaurants were drawn at random from the
sample frame lists until at least 30 completed surveys were obtained for each metro area. This
resulted in differing sampling rates across cities (however, regression analysis methods were
adjusted to account for these differing sampling rates). Although surveyors were prepared to
provide Japanese language surveys, these were not needed, as all surveyed chefs either spoke
English or had a coworker in the restaurant who could translate the interviewer's questions.
Graduate researcher James Wilde interviewing restaurant chef.
Product Attributes
Characteristics of upscale restaurants and the BSB product were investigated to account for
variable market conditions characteristic of seafood and restaurant industries (Engle and
Quagrainie 2006). An evaluation of twenty-three BSB product attributes assumed to influence
restaurant chef acceptance of seafood products was conducted to help identify the most marketable
BSB product form (Wessells 2002). Examples of these BSB attributes include: freshness, fillet yield,
flesh color, traceability and taste. Restaurant chefs were asked to rate each BSB attribute on a scale
from 1-10, where 1 indicated a BSB attribute deemed unimportant, 5 indicated an attribute of
average importance, and 10 indicated an extremely important attribute. Responses for each
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
attribute are summarized in terms of minimum, maximum, mean, standard deviation, and
frequency distribution.
Restaurant Characteristics
Restaurant characteristics were evaluated to further investigate important product and market
attributes. Examples include clientele type, product purchase frequency (i.e., daily, weekly,
monthly), cooking style, preferred product form, size, and fat content. Results are presented using a
combination of tables and bar graphs for convenient comparisons. This analysis will help to
identify marketable BSB product forms in addition to providing additional insight into niche market
factors that have been found to influence demand, commodity value, and industry potential (Zucker
and Anderson 1998).
BSB Prices
Farm-raised BSB prices are hypothetical because the product is not yet on the market (oceancaught BSB are bought and sold, but farm-raised BSB are not yet widely available). Surveyed
restaurants were asked to consider three BSB price scenarios: BSB price the same as the price of
the most comparable/substitute species (as identified by the chef), BSB price 20 percent higher
than the substitute species price, and BSB price 20 percent lower than the substitute species price.
Substitute species prices are based on actual prices paid by the restaurants during the time of the
survey, as reported by the restaurants or the seafood distributors who supplied the restaurants.
Because substitute species prices vary by restaurant due to differences in substitute species type,
substitute species availability, and seafood suppliers used by restaurants, hypothetical BSB prices
vary as well, allowing the effect of BSB price on quantity of BSB demanded to be identified.
The price of the substitute species varies by restaurant, depending on the restaurant’s choice of
substitute species, such as grouper or snapper, and the restaurant’s choice of seafood supplier, such
as Sysco or Southern Foods. If the seafood supplier for a given restaurant was unknown, substitute
price was determined by averaging the prices for the given species over seafood suppliers in the
metro area. When common/generic fish names (i.e.: “snapper” rather than “vermilion snapper”)
were reported by survey respondents, prices for the most commonly purchased species group, as
reported by seafood suppliers, were used.
Regression Analysis
The goals of the regression analysis were to estimate farm-raised BSB niche market demand in
metro niche markets and to investigate the influence of market variables such as restaurant seating
capacity, BSB cost (price), average entrée price, and season on BSB demand.
Multiple regression analysis was used to estimate niche market demand for BSB on a per restaurant
basis. Per restaurant demand can be extrapolated to produce estimates of aggregate demand in
each metro area using estimates of the numbers of restaurants in each metro niche market.
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Pre-test survey results provided insight into the market variables that influence demand for BSB in
the niche market. Variables included: season, BSB price, comparable/substitute species price,
seating capacity, average dinner entrée price, problems experienced with BSB availability and the
availability of similar/substitute fish species, and seasonal restaurant closings. The regression
equation was specified as:
Equation 1.
poundsi,t,s
β0
β4bsbpricei,t,s
β7entreepri
β11philly i
β1springd β2falld β3winterd
β5bsbprsqi,t,s
β8entreeprsqi
β12atlanta i
β6seatcapi
β9fshintnsi
β13sanfrani
β10avalprobi
ei,t,s
The regression model explains the planned purchases of BSB in pounds per month (pounds) by
restaurant “i” in season of year “t” under price scenario “s.” Planned purchases depend on seasonal
dummy variables (springd, falld, and winterd; summer is the omitted default season), the price of
BSB (bsbprice), BSB price squared (bsbprsq), the seating capacity of the restaurant (seatcap), the
average price of a dinner entrée (entreepr), entrée price squared (entreeprsq), the percentage of
restaurant sales attributed to fish sales (fshintns), a dummy variable indicating whether the
restaurant reported problems with the availability of the substitute species (avalprob), and dummy
variables indicating the metro location of the restaurant (philly, atlanta, and sanfran; newyork is
the omitted default metro area), constant coefficients β0-β13 to be estimated by the regression, and
a random error term (e) (The random error term consists of two components in the random effects
panel data regression model). Seasons were specified as follows: winter (December-February),
spring (March-May), summer (June-August), and fall (September-November).
SAS statistical software (SAS Institute Inc. 2002-2003) was used to estimate all regression models.
Weighted regression analysis was used to adjust the regression results for differences in sampling
rates across metro areas. Random effects panel data regression ("PROC Mixed" procedure in SAS)
was used to adjust the regression results for correlation among multiple responses from a given
restaurant.
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
RESULTS
Numbers of Seafood/Sushi Restaurants and Survey Sampling Rates
Restaurant listings provided by YellowPages.com for the fall 2008-winter 2009 period indicated
that there were 857 seafood/sushi restaurants in New York City, 490 in Philadelphia, 653 in Atlanta
and 714 in San Francisco (Table 1). Restaurants were selected at random from these lists and
contacted until 30 restaurants in the targeted niche market from each city agreed to participate in
the survey.
To obtain the desired 30 participating niche restaurants per city, 169 restaurants were contacted in
New York City, 226 in Philadelphia, 293 in Atlanta and 148 in San Francisco, resulting in a survey
sampling rate of 20% of all seafood/sushi restaurants in New York City, 46% in Philadelphia, 45%
in Atlanta and 21% in San Francisco. Regression analysis results reported below are adjusted for
the different sampling rates across metro areas.
Percentage of Seafood/Sushi Restaurants in Upscale Niche Market
Not all seafood/sushi restaurants met the criteria for being in the "upscale" niche market. In New
York City, 36% of seafood/sushi restaurants were in the upscale niche market, in Philadelphia the
percentage was 19%, in Atlanta 13%, and in San Francisco 41% (Table 2).
Survey Response Rates
Overall, survey response rates were good but varied somewhat by metro area (Table 3). In New
York City, 56% of all contacted/sampled restaurants in the upscale niche agreed to participate in
the survey, in Philadelphia survey response was somewhat higher at 75%, in Atlanta 66%, and in
San Francisco 49%.
Estimated Numbers of Upscale Niche Market Restaurants by Metro Area
Based on the total number of seafood/sushi restaurants in each metro area, the number of
seafood/sushi restaurants contacted, and the number of contacted restaurants in the upscale niche,
estimates of the total number of restaurants in the upscale niche market in each metro area can be
obtained (Table 4). The estimated number of restaurants in the upscale niche in New York City is
273, in Philadelphia 87, in Atlanta 85, and in San Francisco 294.
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Niche Market Restaurant Characteristics
Descriptive statistics for several variables used to characterize the upscale niche restaurant market
for BSB are presented in Tables 5-9. All restaurants in the sample were open year-round (no
restaurants were open only seasonally). Table 5 presents average results for all 120 sampled
restaurants in all four metro areas. Average seating capacity per restaurant was 139.6, with a
minimum of 30 and a maximum of 425. Figure 1 shows the distribution of restaurant seating
capacities across all restaurants from all four metro areas. Most restaurants (71 percent) had
seating capacities from 75 to 175, and the most common seating capacity was 125; very few
restaurants had capacities above 275. Average dinner entrée price was $24.71, ranging from a
minimum of $14 to a maximum of $60. Figure 2 presents the distribution of average entrée prices.
The most common entrée prices (69 percent) ranged from $18 to $24; although about 9 percent of
entrée prices were above $40. The percentage of restaurant sales attributable to fish averaged 22.8
percent, ranging from 5 to 75 percent. Comparing results for individual cities (Tables 6-9, 25-30
sampled restaurants per city) with average results (Table 5), San Francisco restaurants were
smaller (smaller seating capacities) than those in other sampled cities. New York City and
Philadelphia had higher than average entrée prices, while entrée prices in Philadelphia and San
Francisco were lower. Sales of upscale seafood restaurants in Philadelphia and San Francisco were
relatively more "fish-intensive" (fish accounted for 25-27 % of sales) than were sales of similar
restaurants in New York City and Atlanta (fish accounted for 18-20 % of sales). Figure 3 presents
results on the type of clientele serviced by upscale seafood restaurants in the four metro areas.
Over 60 percent of customers were local city residents, while about 18 percent were local suburban
residents, and about 14 percent were tourists.
Fish Purchasing Preferences and Behavior
Results presented in Figure 4 show that 42 percent of upscale metro seafood restaurants purchase
fish on a daily basis, with 28 percent purchasing weekly, and 25 percent purchasing both on a daily
and weekly basis (the remaining 5 percent either reported "other" or did not report their frequency
of fish purchases).
Twenty-five percent of niche restaurants report that they currently purchase ocean-caught Black
Sea Bass (when available) (Figure 5), while seventy percent report that they do not (five percent
did not report). Eighty-one percent of restaurants reported that they would purchase Black
Sea Bass if it were available at a price similar to that of comparable fish species, while
eighty-eight percent reported that they would buy BSB if it were available for a price twenty
percent less than that of comparable fish.
Desirable Fish Product Characteristics
Niche market restaurant chefs were asked to assess several product characteristics of the Black Sea
Bass product samples. Chefs were asked to assess the relative importance of BSB product
characteristics on a scale of 1 to 10 (Table 10), with 1 indicating that the characteristic was not
important, 5 indicating average importance, and 10 indicating very important. The chefs were also
asked to report their desired amount or optimal level of some characteristics.
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Fish size (whole weight in pounds) was deemed very important by chefs, receiving an average
rating of 9 (Table 10). Figure 6 indicates that over 90 percent of chefs gave a rating of 8 or higher
to fish size. The optimal/preferred fish size was from 1.5 to 2.5 lbs. for 78 percent of chefs (Figure
7), with 8 percent of chefs preferring smaller fish, and 10 percent of chefs preferring larger fish.
To investigate whether the niche market would be receptive to smaller fish sizes, chefs were asked
whether they would purchase whole BSB of 1 lb. (or less) in weight for approximately the same
price as larger BSB. Thirteen percent of the chefs said yes, they would purchase the smaller fish,
but 82 percent said no (Figure 8). (Some chefs reported that the smaller fish are useful for cooking
and serving whole, as is the custom in some Asian dishes, whereas larger fish will not fit on a
serving plate when cooked whole.) When asked whether they would consider purchasing the
smaller fish if the price were discounted, more (25 percent) of the chefs said yes (Figure 9).
One reason for the importance of fish size is fillet yield, which chefs rated 8.49 in importance (Table
10). Over 75 percent of chefs assigned fillet yield an importance rating of 8 or higher (Figure 10).
Comparable/Substitute Fish Species
An often important factor in determining demand for a new product such as farm-raised Black Sea
Bass is the availability of substitute products, in this case other fish species thought to be similar to
BSB in terms of preparation methods and consumer acceptance. Chefs were asked "What other fish
would be most comparable to Black Sea Bass in your business? That is, Black Sea Bass would be a
reasonable substitute for what fish?" Chefs reported that BSB could be considered a
comparable/substitute product for a variety of fish species (Figure 11), but snapper, grouper and
striped bass were the most commonly reported substitutes, each being mentioned by thirteen or
more chefs (out of 105 chefs reporting). Mahi, tuna and branzino were also thought to be good
substitutes by five or more chefs.
Product Availability
Seafood products are sometimes unavailable at any price due to seasonal fisheries or fishing
regulations. Chefs assigned an importance rating of 7.45 (Table 10) to the "Continuous Availability"
of a seafood product. Indeed, 63 percent of chefs assigned availability an importance rating of 8 or
higher (Figure 12). Twenty-two percent of chefs reported problems with product availability for
fish species they considered to be comparable/good substitutes for Black Sea Bass (Figure 13). For
those chefs currently using Black Sea Bass (ocean-caught / wild-caught), forty-three percent report
problems with the availability of BSB (Figure 14).
Product Form (Live Whole, Fresh Whole, or Frozen Fillet)
Fish products can be shipped live or killed. Killed fish can be shipped fresh/chilled or frozen.
These various product forms have different processing, storage and transport costs and different
end uses / consumer markets. On average, chefs reported a low importance ranking of 2.79 for
obtaining live BSB (vs. killed) (Table 10) with only eleven percent of chefs assigning an importance
ranking of 8 or higher, and 66 percent assigning the lowest ranking of 1 (Figure 15). However,
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
chefs thought that having access to fresh/chilled product (vs. frozen) was very important, assigning
an average importance rating of 8.60 and with over 83 percent of chefs assigning a rating of 8 or
higher to this product attribute (Figure 16). Indeed, over 85 percent of chefs indicated that killed
fresh/chilled was their preferred product form (Figure 17), with over 83 percent expressing no
interest in frozen fillets at a discounted price of 25 percent or more relative to the price of
fresh/chilled BSB (Figure 18).
BSB Product Characteristics and Preferred Preparation Methods
Not surprisingly, all chefs assigned the highest importance rating of 10 to the BSB product
characteristics "Taste" and "Freshness" (Figures 19 and 20). Aspects of taste and freshness
include: visual appearance, skin color, flesh (meat) color, texture, fat content, number of bones and
whether the fish are shipped with an empty digestive tract (purged before shipping). Chefs
assigned Visual Appearance an importance rating of 9.72, emphasizing the importance of careful
handling when harvesting, packing and shipping fish (Table 10 and Figure 21). Skin Color, Flesh
Color, and Texture also received high importance rankings, 8.71, 9.52, and 9.97, respectively (Table
10, Figures 22, 23 and 24). Fat Content and Number of Bones were of moderate importance,
receiving ratings of 7.72 and 7.47 (Table 10, Figures 25 and 27). With respect to Fat Content, 44
percent of chefs preferred a moderate fat content, 33 percent preferred a high fat content, and only
12 percent preferred a low fat content (Figure 26). The chefs' opinions were mixed on the
importance of the product having an empty digestive tract (Figure 28), assigning an average
importance rating of 5.09 (Table 10).
As part of the study, chefs were given samples of fresh, whole Black Sea Bass to prepare and
evaluate in their restaurant kitchens. Chefs were then asked to report their preferred preparation
method or methods for Black Sea Bass (Table 11). Chefs were allowed to select more than one
preferred method, if desired. The most-preferred preparation methods were sautéed (75 percent
of chefs) and baked (26 percent). Sushi, sashimi, and "other" were the next-most popular methods,
with 23 percent of chefs selecting each.
Product Origin, Production, Promotion and Labeling Characteristics
Chefs assigned a moderate importance rating of 6.93 to Domestic Origin/Production of the product
(Table 10 and Figure 29). Similarly, a Certificate of Origin and product route/shipping Traceability
were of moderate importance to chefs, who assigned them average ratings of 5.73 and 6.86 (Table
10 and Figures 30 and 31). These findings indicate that many chefs are willing to use foreignproduced product and that certification of origin is not so important as long as freshness and
quality are maintained. This implies that domestic production, per se, is not currently perceived by
chefs as an especially important product attribute. However, should imported fish suffer quality or
food safety problems (as happened recently with imports of other food products from China),
domestic production could become more valuable in the eyes of chefs.
With regard to general production methods--farm-raised vs. ocean-caught--chefs' opinions were
mixed ("ocean-caught" is also known as "wild-caught"). On average, chefs assigned a higher
importance rating to ocean-caught (7.78) as compared to farm-raised (6.24), but a substantial
percentage of chefs (39 percent) assigned an importance rating of 8 or higher to farm-raised
production methods (Table 10 and Figures 32 and 33). When asked directly which production
method they preferred, 43 percent said ocean-caught, 7 percent said farm-raised, and 45 percent
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
said that production method did not matter (the remaining 5 percent of chefs did not answer this
question) (Figure 34). This result indicates that although many chefs prefer ocean-caught fish, a
substantial percentage (52 percent) either prefer farm-raised fish or are willing to substitute farmraised fish for ocean-caught.
Chefs' opinions were mixed on the importance of organic production methods (average importance
rating 5.93), with about 20 percent rating it unimportant, 20 percent rating it very important, and
the remainder considering it of moderate importance (Table 10, Figure 35).
On the topic of product promotion/advertising, chefs thought that this was relatively unimportant,
assigning an average importance rating of 3.79 (Table 10, Figure 36).
Similarly, nutritional labeling was thought by chefs to be relatively unimportant (average rating
4.42) (Table 10, Figure 37).
However, chefs' opinions were mixed on the importance of quality certification (average rating
6.67), with 21 percent rating it unimportant, 32 percent rating it very important, and the remainder
rating it of moderate importance (Table 10, Figure 38).
Monthly Demand Model for Black Sea Bass in Metro Niche Markets
Three statistical regression models were developed to estimate monthly demand for farm-raised
Black Sea Bass in the upscale seafood/sushi restaurant market. Each model attempts to explain
pounds of farm-raised BSB purchased per month per restaurant (variable "pounds," which is the
dependent variable in the model). Twelve observations with all necessary data were available for
each of 101 restaurants (not all surveyed restaurants were included in the regression analysis
because not all restaurants answered all survey questions necessary for the regression analysis),
providing 1212 panel data observations for the regression analyses. (A random effects model,
Model 3 below, was used to adjust the analysis for the panel nature of the data.) The twelve
observations for a given restaurant differ from one another by season or by fish price.
Model 1 is a basic multiple regression model. Model 2 adjusts the results of Model 1 for differing
sampling rates across cities (see Table 1 for sampling rates). Model 3 adjusts the results for both
differing sampling rates across cities and the panel nature of the data (i.e., multiple observations
per restaurant). Descriptive statistics for the variables used in the regression models are presented
in Tables 12-16. Table 12 provides descriptive statistics for all four metro areas pooled together,
while Tables 13-16 give results for individual cities. Tables 17a and 17b present the results of the
statistical regression models. Table 17a gives regression model coefficient estimates and t-values
for all three models. Table 17b gives model significance and fit results for the three models.
Results of an F-test indicate that Model 1 explains a statistically significant amount of variation in
the dependent variable pounds (Table 17b). A likelihood-ratio test confirms this result. The
adjusted R-squared statistic indicates that Model 1 explains 33 percent of the variation in the
dependent variable pounds. In general the signs of the coefficient estimates are as expected, higher
Black Sea Bass price (bsbprice) has a negative and significant impact on pounds purchased. The
effect of Black Sea Bass price squared (bsbprsq) is positive and significant, indicating that the effect
of BSB price on pounds changes in intensity as BSB price changes. Seating capacity of the
restaurant (seatcap) has a positive and significant impact on pounds purchased. The city dummy
variables (philly, atlanta, and sanfran) are significant, indicating that pounds purchased in these
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
cities are significantly different from pounds purchased in the default city New York (however, this
result loses statistical significance in preferred Model 3 below). Perhaps surprisingly, if the
restaurant experiences problems with the availability of substitute fish species from ocean fisheries
(avalprob), then the restaurant purchases is significantly less BSB (however, this result changes
direction and loses statistical significance in the preferred Model 3 below). The seasonal dummy
variables (springd, falld, and winterd) are negative but statistically insignificant (however, these
variables become statistically significant in the preferred Model 3 below). The effects of average
entrée price (entreepr and entreepsq) and the percentage of fish sales in overall restaurant sales
(fishintns) have positive but statistically insignificant effects on pounds purchased.
Model 2 corrects the results of Model 1 for the effects of varying sampling rates across cities. An Ftest indicates that Model 2 is statistically significant (Table 17b). The adjusted R-squared statistic
for Model 2, 0.38, indicates that Model 2 explains only slightly more of the variation in the
dependent variable (pounds) than does Model 1. Key coefficient estimates and statistical
significance (Table 17a) are similar across Models 1 and 2; correction for variation in sampling
rates across cities does not appear to substantially affect regression results.
Model 3 corrects Model 1 for both varying sampling rates across regions/strata and the panel
nature of the data. The data feature multiple responses from each restaurant, and these "withinrestaurant" responses may be correlated. If the responses are correlated, the regression procedure
must be adjusted to correct for the correlation. If correlation is present, the unadjusted standard
errors of the estimated regression coefficients will be biased downward, leading to false
conclusions regarding statistical significance. In Model 3, a random effects panel data regression
model (SAS, Proc Mixed, SAS Institute Inc. 2002-2003) is used to test for the presence of correlation
among responses from each restaurant and to correct coefficient estimates if correlation is present.
The F-test and adjusted R-squared measures of model fit are not appropriate for panel data
regressions with random effects, but a likelihood ratio test is appropriate. A likelihood ratio test
indicates that Model 3 is statistically significant, and a Wald Z-test indicates that the "withinrestaurant" responses are, indeed, correlated, indicating that a panel data regression model such as
Model 3 is necessary.
Model 3 is the preferred model as it corrects for both varying sampling rates across regions/strata
and correlation among responses from each restaurant. In Model 3 the effect of higher BSB prices
(bsbprice) on pounds purchased remains large, negative, and statistically significant. Also, higher
restaurant seating capacity (seatcap) has a positive and statistically significant impact on farmraised BSB pounds purchased. With the panel data correction in Model 3, the variable measuring
availability problems with substitute species (avalprob) loses statistical significance. Similarly, the
three dummy variables measuring differences in BSB purchasing behavior across the metro cities
(philly, atlanta, sanfran) loses statistical significance, indicating that when other factors are similar,
a restaurant in Philadelphia, Atlanta or San Francisco would purchase about the same number of
pounds of BSB per month as would a similar restaurant in New York. Another difference between
Model 3 and the Models 1 and 2 is that the effects of the seasonal dummy variables (springd, falld
and winterd) become significant in Model 3, indicating that pounds of BSB purchased in fall, winter
and spring seasons are lower than pounds purchased in the summer season. Average entree price
(entreepr) and the percentage of fish sales in overall restaurant sales (fshintns) do not have
statistically significant effects on pounds of farm-raised BSB pounds purchased.
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Estimates of Metro Niche Market Demand
The preferred regression model (Model 3) provides estimates of mean BSB purchases per
restaurant per month by season. These per restaurant estimates may be expanded by the number
of restaurants in the niche market to project annual aggregate niche market demand for BSB in a
particular metro area.
Tables 18a and 18b present estimates of upscale niche seafood/sushi restaurant quantity
(pounds) demanded for farm-raised Black Sea Bass by metro city and season. The estimates
assume that farm-raised BSB are sold whole, fresh/chilled, 1.5-2.5 lb. in size, at prices equal to the
average prices of comparable/substitute fish in each metro area. Model 3 is used to estimate mean
monthly demand per restaurant for each metro area by season (Table 18a, columns 2-5).
Multiplying the per restaurant BSB demand estimates by the estimated number of niche
restaurants in each metro area (Table 18a, column 1) produces estimates of monthly pounds
demanded by season by all restaurants in the niche market for each metro area (Table 18a, columns
6-9). In all four metro areas, monthly demands are higher in the summer relative to the other
seasons. Monthly demands per restaurant are higher in New York City and Philadelphia and lower
in Atlanta and San Francisco. The lowest per restaurant demands in San Francisco are due
primarily to smaller restaurant size (smaller seating capacity) per restaurant. Niche market
demand for all restaurants in San Francisco is second only to New York City, despite low demand
per restaurant in San Francisco, because San Francisco has the highest estimated number of
restaurants meeting the niche criteria (higher even than New York City).
Multiplying each monthly estimate by three months per season and summing across seasons
produces best estimates of annual pounds demanded by all niche restaurants for each metro area.
(Table 18b). Mean annual estimates of niche market demand range from 97,066 lbs./year for New
York City to 21,972 lbs./year for Atlanta. Table 18b also presents 95 % confidence intervals around
the estimated annual means (i.e., it is 95% likely that each interval contains the true mean annual
niche market demand for its respective metro city.).
Overall, estimated annual demand from just these four metro cities totals over 218,000 pounds per
year.
An Extended Example for the New York City Niche Market
Equation 1 can be used with the estimated coefficient values of Model 3 to examine many different
scenarios by varying the values inserted for the variables in Equation 1. This example develops and
explores estimates of demand for farm-raised Black Sea Bass in the New York City niche market.
The coefficient estimates for Model 3 from Table 17a are inserted for the β coefficients in Equation
1. The average price of substitute fish in the New York Market ($5.39/lb.) is used for bsbprice. To
generate a demand forecast for an "average" month, values of 0.25 are substituted for each of the
quarterly seasonal dummy variable springd, falld and winterd. Other variables are set at their
mean values for the New York City metro area (Table 13), with the exceptions that bsbprsq is set
equal to bsbprice squared, entreepsq is set equal to entreepr squared, and the variable seasonal is
omitted entirely from the regression equation (because variable seasonal was always equal to zero
in the sample data). (The values bsbprsq and entreepsq from Table 13 are not used in the
regression equation because the averages (means) of squared values as given in Table 13 are less
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
than the squares of average values for non-linear relationships, and it is the square of the average
value that is desired for use in the regression equation.) With these values, Equation 1 predicts
mean pounds of farm-raised Black Sea Bass purchased per month per restaurant on average across
seasons for the New York City metro niche market; this average is 29.63 lbs./month. Multiplying
the pounds per restaurant per month by 12 months per year and by the number of restaurants in
the New York City niche market (273 restaurants) produces an estimate of the annual aggregate
demand for farm-raised BSB in the New York City niche market of 97,066 lbs./year, with a
corresponding 95 percent confidence interval of 66,284 lbs./year to 127,762 lbs./year.
Equation 1 can be used to estimate changes in demand due to a change in BSB price. Suppose
growers decide to sell farm-raised BSB for $7.00/lb. while the price of substitute fish remains at
$5.39. Equation 1 predicts that average demand per New York City niche market restaurant would
fall to 17.5 lbs./month (57,357 lbs./year for New York City niche market). Figure 39 shows the
estimated New York City Niche Market Demand Curve for farm-raised Black Sea Bass (2008-year
dollars). This curve shows how the quantity of Black Sea Bass purchased by all New York City niche
market restaurants in total depends on the BSB price paid by restaurants to suppliers/wholesalers
(all other factors held constant). The horizontal axis gives estimated annual pounds of farm-raised
Black Sea Bass demanded (purchased) in total by all New York City restaurants in the niche market.
The vertical axis measures wholesale price paid by restaurants to suppliers for whole, chilled/fresh,
farm-raised Black Sea Bass 1.5-2.5 lbs. in size.
Returning to the scenario of BSB sold for $5.39/lb., the effect of season on New York City niche
market demand can be estimated by substituting appropriate values for the seasonal dummy
variables springd, falld and winterd in Equation 1. With all three seasonal dummy variable values
set to zero, Equation 1 predicts 31.32 pounds of farm-raised Black Sea Bass purchased per month
per restaurant on average in the summer season (the default season). Setting the springd seasonal
dummy variable to one while holding the values of the other seasonal dummies at zero produces an
estimate of 29.47 for mean pounds of farm-raised Black Sea Bass purchased per month per
restaurant on average in the summer season in the spring season. Similarly, estimates for mean
pounds purchased per month per restaurant in the fall and winter seasons are 29.36 lbs./month
and 28.36 lbs./month.
The coefficient of 0.125 on the restaurant seating capacity variable (seatcap) for Model 3 (Table
17a) indicates that for every 100-seat increase in seating capacity in a given restaurant, farm-raised
BSB purchases increase by 12.5 lbs./month for that restaurant, on average.
DISCUSSION AND CONCLUSIONS
The purpose of this study was to investigate high-value restaurant niche market demand for farmraised Black Sea Bass (BSB) in several major metropolitan areas. Researchers at North Carolina
universities are leaders in developing the biotechnology necessary to grow BSB using state of the
art Recirculating Aquaculture Systems (RAS) technology. With recent progress in the development
of RAS methods for growing BSB in North Carolina, entrepreneurs are considering the construction
of commercial-scale RAS production facilities. The objective of this study was to assist
commercialization of the BSB production technology in the state by assessing the potential demand
for farm-raised BSB in the high-value market channel of direct sales to restaurants in large
metropolitan areas of the United States. A prior study (Wilde 2008) found very good market
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
acceptance of BSB within the state of North Carolina and called for an investigation of large
metropolitan markets outside the state.
Ocean-caught BSB is a historically premium seafood product with high economic value. The
decrease in ocean catches due to overfishing has raised interest in the production of BSB using
aquaculture methods. The traditional high-value retail market for BSB is characterized as a niche
market of upscale, gourmet, white table-cloth restaurants. In this study, the upscale niche
restaurant market for BSB is defined as those seafood-serving, non-buffet restaurants with an
average dinner entrée price greater than or equal to $12.
Four major metropolitan markets were investigated: New York City, Philadelphia, Atlanta and San
Francisco. The first three cities were selected due to their proximity to North Carolina and
potentially large markets. San Francisco was selected as a representative West Coast city to
ascertain whether there were any significant differences between West Coast and East Coast cities.
Differences between the coasts might exist due to differences in seafood types and availability,
differences in ethnic populations with different food preferences, etc.
A total of 857 seafood/sushi restaurants were identified in New York City. Similarly, 490
seafood/sushi restaurants were identified in Philadelphia, 653 in Atlanta, and 714 in San Francisco.
Not all seafood/sushi restaurants met the criteria for being in the "upscale" niche market. In New
York City, 273 (36%) of seafood/sushi restaurants were in the upscale niche market, 87 (19%) in
Philadelphia, 85 (13%) in Atlanta, and 294 (41%) in San Francisco.
Seafood and Japanese/sushi restaurants in the upscale niche market were selected at random and
contacted until 30 completed surveys were obtained from each metro city (subsequent analyses
were adjusted for different sampling rates across cities). Survey response rates varied from 49 to
75 percent across cities. Restaurant chefs prepared and evaluated fresh, whole, farm-raised BSB
and completed a market research survey that collected information on the chefs' impressions,
preferences and potential purchase intentions regarding BSB.
In terms of general restaurant characteristics in the niche market, the survey found that average
seating capacity per restaurant was 139.6, average dinner entrée price was $24.71, the percentage
of restaurant sales attributable to fish averaged 22.8 percent, and all restaurants in the sample
were open year-round (no restaurants were open only seasonally). Most (42%) restaurants in the
niche market purchase fish on a daily basis, with the remainder purchasing weekly and daily. Over
60 percent of customers were local city residents, while about 18 percent were local suburban
residents, and about 14 percent were tourists. San Francisco restaurants were smaller (smaller
seating capacities) than those in other sampled cities. New York City and Philadelphia had higher
than average entrée prices, while entrée prices in Atlanta and San Francisco were lower. Sales of
upscale seafood restaurants in Philadelphia and San Francisco were relatively more "fish-intensive"
(fish accounted for 25-27 % of sales) than were sales of similar restaurants in New York City and
Atlanta (fish accounted for 18-20 % of sales).
Twenty-five percent of niche restaurants reported that they currently purchase Black Sea Bass
(when available from ocean fisheries). Eighty-one percent of restaurants reported that they would
purchase farm-raised Black Sea Bass if it were available at a price similar to that of comparable fish
species, while eighty-eight percent reported that they would buy BSB if it were available for a price
twenty percent less than that of comparable fish. With regard to general production methods-farm-raised vs. ocean-caught--chefs' opinions were mixed. When asked which production method
they preferred, 43 percent said ocean-caught, 7 percent said farm-raised, and 45 percent said that
Page 17
Assessing Metro Niche Market Demand for North Carolina Mariculture Products
production method did not matter (the remaining 5 percent of chefs did not answer this question)
This result indicates that although many chefs currently have a preference for ocean-caught fish, a
substantial percentage (52 percent) either prefer farm-raised fish or are willing to substitute farmraised fish for ocean-caught. With respect to current seafood suppliers, the metro markets of New
York City and Philadelphia appear to be more concentrated, with many restaurants obtaining
seafood from a few dominant wholesaler/suppliers, whereas restaurants in Atlanta and San
Francisco obtained their seafood from a wider variety of suppliers.
An often important factor in determining demand for a new product such as farm-raised Black Sea
Bass is the availability of substitute products, in this case other fish species thought to be similar to
BSB in terms of preparation methods and consumer acceptance. Chefs were asked "What other fish
would be most comparable to Black Sea Bass in your business? That is, Black Sea Bass would be a
reasonable substitute for what fish?" Chefs reported that BSB could be considered a
comparable/substitute product for a variety of fish species, but snapper, grouper and striped bass
were the most commonly reported substitutes. Chefs' opinions on striped bass were mixed, New
York City and Philadelphia chefs commonly compared BSB to striped bass, but not one Atlanta chef
made this comparison.
Seafood products are sometimes unavailable at any price due to seasonal fisheries or fishing
regulations. Aquaculture production provides a way of ensuring a continuous supply of fish. A
majority of chefs thought that continuous availability of seafood projects was important. Over
twenty percent have experienced problems with the availability of fish comparable to BSB, and over
forty percent have experience problems with the availability of ocean-caught BSB.
Niche market restaurant chefs were asked to assess several product characteristics of the Black Sea
Bass product samples. In terms of project form, the vast majority of chefs preferred fresh/chilled
fish instead of live fish or frozen fish fillets. Chefs were given samples of fresh, whole Black Sea
Bass to prepare and evaluate in their restaurant kitchens. The most-preferred preparation
methods were sautéed (75 percent of chefs) and baked (26 percent). Sushi, sashimi, and "other"
were the next-most popular methods, with 23 percent of chefs selecting each. Fish size (whole
weight in pounds) was deemed very important by chefs, with the optimal/preferred fish size being
1.5 to 2.5 lbs. Relatively few chefs were interested in fish 1 lb or less in size, even at a discounted
price. Those chefs interested in smaller fish were located in New York City and Philadelphia. One
reason for the importance of fish size is fillet yield, which most chefs rated highly important. The
importance of fish size provides another advantage to aquaculture--the size of farm-raised fish can
be tailored to each chef's preference.
Not surprisingly, chefs rated taste and freshness as the most important product characteristics.
This is an encouraging result for aquaculture, as farms can typically provide next-day delivery of
harvested product, ensuring freshness. Aspects of taste and freshness include: visual appearance,
skin color, flesh (meat) color, texture, fat content, number of bones and whether the fish are
shipped with an empty digestive tract (purged before shipping). Chefs thought that the visual
appearance of the product was very important, emphasizing the need for careful handling when
harvesting, packing and shipping fish. Skin color, flesh color, and texture also received high
importance rankings, while fat content and number of bones were of moderate importance. With
respect to fat content, most chefs preferred a moderate to high fat content. This result is also
encouraging for aquaculture, as farms can control the fat content of the product by adjusting feed
composition. Chefs' opinions were mixed on the importance of the product having an empty
digestive tract, with chefs in the San Francisco market assigning higher importance to this product
characteristic. Chefs' opinions were mixed on the importance of organic production methods, with
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
the majority considering it of moderate importance. Chefs thought that nutrition labeling and
product promotion/advertising by the fish suppliers were relatively unimportant. However, chefs'
opinions were mixed on the importance of quality certification with a third of chefs rating it highly
important.
Domestic origin/production and certification of product origin were of only moderate importance
to chefs. Of the four metro markets, Atlanta chefs indicated greater preference for domestic
seafood. These findings indicate that many chefs are willing to use foreign-produced product and
that certification of origin is not so important as long as freshness and quality are maintained. This
implies that domestic production, per se, is not currently perceived by chefs as an especially
important product attribute. However, should imported fish suffer quality or food safety problems
(as happened recently with imports of other food products from China), domestic production could
become more valuable in the eyes of chefs.
Three statistical regression models were developed to estimate demand for farm-raised BSB in
niche metro markets. The results of the preferred regression model (Model 3, which corrects for
both varying sampling rates across metro cities and the panel nature of the data) indicate that BSB
price, restaurant seating capacity, and season of the year have statistically significant effects on BSB
demand, but average entree price, the percentage of fish sales in overall restaurant sales, and
availability problems with substitute species do not have statistically significant effects. In the New
York City niche market, for example, an increase in BSB price from $5.39/lb. to $7.00/lb. decreases
BSB purchases from 29.63 lbs./month per restaurant to 17.5 lbs./month (assuming the price of
substitute fish is $5.39/lb. the average price of substitute fish in the city). For every 100-seat
increase in seating capacity in a niche market restaurant, farm-raised BSB purchases increase by
12.5 lbs./month for that restaurant, on average. Restaurants purchase significantly more BSB in the
summer season relative to the fall, winter and spring seasons. Regression results also indicate that
when factors such as seating capacity and season are the same, the number of pounds of BSB
purchased per month by a restaurant in any of the three cities is approximately the same.
The preferred regression model (Model 3) provides estimates of mean BSB purchases per
restaurant per month by season. These per restaurant estimates may be expanded by the number
of restaurants in the niche market to estimate annual aggregate niche market demand for BSB in a
particular metro area. Monthly demands per restaurant are higher in New York City and
Philadelphia and lower in Atlanta and San Francisco. The lowest monthly demands in San
Francisco are due primarily to smaller restaurant size (smaller seating capacity) per restaurant.
Total niche market demand for all restaurants in San Francisco is second only to New York City,
despite low demand per restaurant in San Francisco, because San Francisco has the highest
estimated number of restaurants meeting the niche criteria (higher even than New York City).
Assuming that farm-raised BSB are sold whole, fresh/chilled, 1.5-2.5 lb. in size, at prices equal to
the average prices of comparable/substitute fish in each metro area, mean annual estimates of
aggregate niche market demand range from 97,066 lbs./year for New York City to 21,972 lbs./year
for Atlanta (Table 18b). Overall, estimated annual demand from just these four metro cities totals
over 218,000 pounds per year. In summary, there is significant demand for farm-raised black sea
bass in upscale niche metropolitan markets at prices that would be profitable to NC growers.
Although the regression model demonstrates the effects of included variables on BSB purchases,
some additional, highly influential factors affecting BSB demand remain to be investigated. Interest
rates, financial lending, gas prices and the real estate market are just a few examples of highly
variable aspects of the US economy that can affect seafood/sushi restaurants, their customers, and
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
demand for BSB. Similarly, it should be emphasized that this study is designed to estimate current
demand. That is, continued efforts toward commercialization of BSB and product promotion will
affect future demand in ways not captured by the regression model. Market demand estimates
should therefore be updated and reassessed regularly.
A number of economic questions related to BSB aquaculture remain to be answered. A more
detailed analysis of high-volume aquaculture production, processing, and distribution may provide
valuable information. For example, evaluation of alternative packaging, branding and speciesspecific value-added processing options are needed. Continued biotechnology research focused on
improving BSB growth rates via diet, nutrition and light/temperature optimization will likely
increase production efficiency, decreasing production costs, and making the product more
affordable for consumers and more profitable for producers.
In the future, newly emerging consumer preferences will have substantial implications for the US
aquaculture industry. Evolving consumer preferences for certain seafood product attributes, such
as organic seafood products, will encourage restaurants to look to the aquaculture industry to
satisfy these demands (Jensen 2006, Olsen 2004). Aquaculture production will likely grow to meet
increasing consumer demands for seafood, and growth will require additional market research to
successfully incorporate new farm-raised products such as BSB.
Finally, more information regarding potential BSB markets outside the United States (e.g., Hong
Kong, London, Paris) is needed to guide the development of a BSB aquaculture industry (Josupeit
1995). Specifically, further investigation into potential international export markets would be
valuable to assess the potential scale of consumer demand for farm-raised BSB.
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
REFERENCES
Berlinsky D., M. Watson, G. Nardi, and T. Bradley. 2000. Investigations of selected parameters for
growth of larval and juvenile black sea bass Centropristis striata L. Journal of the World Aquaculture
Society 31: 426-435.
Carroll, P.M., W.O. Watanabe and T.M. Losordo. 2005. Pilot production of hatchery-reared summer
flounder in a marine recirculating aquaculture system: the effects of ration level on growth, feed
conversion, and survival. Journal of the World Aquaculture Society. 36: 120-128.
Copeland, K.A. and W.O. Watanabe. 2006. Light intensity effects on early life stages of black sea bass
Centropristis striata (Linnaeus 1758). Aquaculture Research 37: 1458-1463.
Copeland, K.A., W.O. Watanabe and P.M. Carroll. 2002. Growth and feed utilization of captive oceancaught black sea bass Centropristis striata fed practical diets in a recirculating tank system under a
semi-controlled temperature regime. Journal of the World Aquaculture Society 33: 97-109.
Copeland, K.A., W.O. Watanabe, P.M. Carroll, K.S. Wheatley, and T.M. Losordo. 2003. Growth and
feed utilization of captive wild black sea bass Centropristis striata at four different densities in a
recirculating tank system. Journal of the World Aquaculture Society 34: 300-307.
Copeland, K., W. Watanabe, and C.F. Dumas. 2005. Economic Evaluation of a Small-Scale
Recirculating System for Ongrowing of Captive Wild Black Sea Bass Centropristis striata in North
Carolina. Journal of the World Aquaculture Society. 36(4):489-497.
Dumas, C.F. and S. Horton. 2002. The Potential Impact of Summer Flounder Aquaculture on
Regional Flounder Price. Aquaculture Economics and Management. 6(1):39-54.
Dumas, Christopher, Wade Watanabe, and Kimberly A. Copeland. 2007a. The Economics of Black
Sea Bass Centropristis striata Fingerling Production in Recirculating Systems. Presentation at
World Aquaculture Society Conference, San Antonio, TX. March 2, 2007.
Dumas, C.F., Wade Watanabe, Harry Daniels, Thomas Losordo, Kevin Yates. 2007b. Southern
Flounder Growout Economics. Southern Flounder Aquaculture Workshop. Wallace, NC. September
27, 2007.
Engle, C.R. and Quagrainie, K. 2006. Aquaculture Marketing Handbook. Blackwell Publishing.
Ames, Iowa, USA.
Jensen, H.H. 2006. Changes in seafood consumer preference patterns and associated changes in
risk exposure. Marine Pollution Bulletin. 53 (10-12): 591-598.
Josupeit, H. 1995. European markets for seabass, seabream and turbot. European Aquaculture.
(2): 6-12.
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Musick, J.A. and Mercer, L.P. 1977. Seasonal distribution of black sea bass, Centropristis striata, in
the Mid-Atlantic Bight with comments on ecology and fisheries of the species. Transactions of the
American Fisheries Society. 106: 12-25.
NMFS. 2006. Annual commercial landings statistics and marine recreational fisheries statistics
survey query results. National Marine Fisheries Service. Silver Spring, Maryland, USA.
NMFS. 2007. Preliminary North Carolina commercial landings. National Marine
Fisheries Service. Silver Spring, Maryland, USA.
Olsen, S.O. 2004. Antecedents of seafood consumption behavior: an overview. Journal of Aquatic
Food Product Technology. 13 (3): 79-91.
SAS Institute Inc. SAS for Windows. Version 9.1 Edition. Cary, NC. SAS Institute Inc. 2002-2003.
Sedberry, G.R. 1988. Food and feeding of black sea bass, Centropristis striata, in live bottom
habitats in the South Atlantic Bight of the USA. Environmental Biology of Fishes. 11: 241-258.
Wessells, C.R. .2002. The Economics of Information: Markets for Seafood Attributes. Marine
Resource Economics. 17:153-162.
Wilde, James. "Analysis of a niche market for farm-raised black sea bass Centropristis striata in
North Carolina." Masters Thesis. Center for Marine Science, University of North Carolina
Wilmington. Wilmington, NC. 2008.
Wilde, J., C.F. Dumas, and W. Watanabe. 2008. Analysis of the niche restaurant market for farmraised black sea bass, Centropristis striata, in North Carolina. Presentation at World Aquaculture
Society Conference, Orlando, FL. February 12, 2008
Zucker, D.A. and Anderson, J.L. 1998. Implications of choice behaviour and preferences in niche
markets. Aquaculture Economics and Management. 2 (2): 61-70.
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
TABLES
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Table 1. Survey Sampling Rates by Metro Area.
Total
Seafood/Sushi
Metro
Restaurants
Area
in City
NYC
857
Philly
490
Atlanta 653
San Fran 714
Seafood/Sushi
Restaurants
Contacted
(random sample)
169
226
293
148
Sampling
Rate
169/857=20%
226/490=46%
293/653=45%
148/714=21%
Table 2. Percentage of Seafood/Sushi Restaurants in Niche Market by Metro Area.
Seafood/Sushi
Restaurants
Metro
Contacted
Area
(random sample)
NYC
169
Philly
226
Atlanta 293
San Fran 148
Sample
Restaurants
No Longer
in Business
18
12
9
0
Sample
Restaurants
Inside
Niche Mkt
54
40
38
61
Sample
Restaurants
Outside
Niche Mkt
97
174
246
87
Percentage
Seafood/Sushi
Restaurants in
Niche Mkt
54/(54+97)=36%
40/(40+174)=19%
38/(38+246)=13%
61/(61+87)=41%
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Table 3. Survey Response Rates by Metro Area.
Sample
Restaurants
Metro
Inside
Area
Niche Mkt
NYC
54
Philly
40
Atlanta 38
San Fran 61
Restaurants
Inside
Niche Mkt
Refusing Survey
24
10
8
10
Restaurants
Inside
Niche Mkt
Participating
30
30
25
30
Restaurants
Participating
But Not
Returning Survey
0
0
5
0
Survey
Response
Rate
30/54=56%
30/40=75%
25/38=66%
30/61=49%
Table 4. Estimated Total Number of Seafood/Sushi Restaurants in Niche Market by Metro Area.
Total
Seafood/Sushi
Metro
Restaurants
Area
in City
NYC
857
Philly
490
Atlanta 653
San Fran 714
Seafood/Sushi
Restaurants
Contacted
(random sample)
169
226
293
148
Sample
Restaurants
Inside
Niche Mkt
54
40
38
61
Estimated
Total
Restaurants
In Niche Mkt
857*(54/169)=273
490*(40/226)=87
653*(38/293)=85
714*(61/148)=294
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Table 5. Upscale Niche Seafood/Sushi Restaurant Characteristics, All Four Cities
Variable
N
Mean Std Dev Minimum Maximum
Seating Capacity
115 139.600 76.320
Ave. Entree Price ($/entree) 114 24.711 8.979
Percent Sales Fish
110 22.845 14.538
30.000
14.000
5.000
425.000
60.000
75.000
N = number of sample restaurants reporting out of 120.
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Table 6. Upscale Niche Seafood/Sushi Restaurant Characteristics, New York City
Variable
N
Mean Std Dev Minimum Maximum
Seating Capacity
30 144.733 84.874
Ave. Entree Price ($/entree) 30 26.233 8.744
Percent Sales Fish
30 19.850 17.318
40.000
14.000
5.000
425.000
50.000
75.000
N = number of sample restaurants reporting out of 30.
Table 7. Upscale Niche Seafood/Sushi Restaurant Characteristics, Philadelphia
Variable
N
Mean Std Dev Minimum Maximum
Seating Capacity
30 154.600 87.646
Ave. Entree Price ($/entree) 30 28.033 11.497
Percent Sales Fish
30 27.167 14.982
30.000
14.000
12.500
310.000
60.000
75.000
N = number of sample restaurants reporting out of 30.
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Table 8. Upscale Niche Seafood/Sushi Restaurant Characteristics, Atlanta
Variable
N
Mean Std Dev Minimum Maximum
Seating Capacity
25 166.760 61.550
Ave. Entree Price ($/entree) 25 21.620 8.092
Percent Sales Fish
21 17.857 8.742
77.000
14.000
7.500
310.000
44.000
47.500
N = number of sample restaurants reporting out of 30.
Table 9. Upscale Niche Seafood/Sushi Restaurant Characteristics, San Francisco
Variable
N
Mean Std Dev Minimum Maximum
Seating Capacity
30 96.833 45.701
Ave. Entree Price ($/entree) 29 22.362 4.959
Percent Sales Fish
29 25.086 13.101
35.000
15.000
10.000
208.000
34.000
57.500
N = number of sample restaurants reporting out of 30.
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Table 10. Chefs' Assessment of Relative Importance of Black Sea Bass Product Attributes for Consumer Acceptance.
(Rating Scale: 1 = not important, 5 = average importance, 10 = very important)
Variable
Mean Rating
Minimum Maximum
N (Scale 1-10) Std Dev Rating
Rating
Continuous Availability
Live Product (vs. Fresh/Chilled)
Fresh/Chilled Product (vs. Frozen)
Empty Digestive Tract
Freshness
Number of Bones
Fillet Yield
Fish Size (Weight)
Skin Color
Flesh Color
Fat Content
Taste
Texture
Visual Appearance
Nutritional Labeling
Domestically Produced
Certificate of Origin
Certificate of Quality
Traceability
Farm-Raised
Ocean-caught
Product Promotion
Organically Grown
98
98
98
98
97
97
97
97
97
97
97
97
97
97
97
97
97
96
97
97
97
97
97
7.45
2.79
8.60
5.09
10.00
7.47
8.49
9.00
8.71
9.52
7.72
10.00
9.97
9.72
4.42
6.93
5.73
6.67
6.86
6.24
7.78
3.79
5.93
2.71
3.00
1.77
2.95
0.00
2.28
1.99
1.56
2.03
0.83
2.06
0.00
0.17
0.61
2.76
2.55
2.97
3.40
2.52
2.71
2.49
2.98
3.16
1.00
1.00
3.00
1.00
10.00
1.00
1.00
1.00
1.00
7.00
3.00
10.00
9.00
8.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
N = number of restaurants reporting.
Page 29
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Table 11. Chefs' Preferred Preparation Methods for Black Sea Bass.
Chef's
Preferred
Preparation
Number
Methods
of Chefs1
Percent
sauteed
85
0.75
baked
30
0.26
sushi
26
0.23
sashimi
26
0.23
other
26
0.23
deep-fried
18
0.16
broiled
13
0.11
steamed
4
0.04
(missing)
6
----1 Out of 114 chefs reporting.
Chefs could select more than one preferred preparation method.
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Table 12. Descriptive Statistics for Variables Used in Market Demand Regression Analysis--All Metro Areas Combined
Variable
pounds
springd
falld
winterd
bsbprice
bsbprsq
seatcap
entreepr
entreepsq
fshintns
avalprob
seasonal
N
Mean Std Dev Minimum
101 27.231 28.735
120
0.250
0.433
120
0.250
0.433
120
0.250
0.433
120
5.291
1.590
120 30.521 23.548
115 139.488 75.877
114 24.713
8.940
114 690.615 579.578
110 22.895 14.438
120
0.232
0.422
120
0.000
0.000
0.000
0.000
0.000
0.000
2.360
5.570
30.000
14.000
196.000
5.000
0.000
0.000
Maximum
200.000
1.000
1.000
1.000
14.400
207.360
425.000
60.000
3600.000
75.000
1.000
0.000
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Table 13. Descriptive Statistics for Variables Used in Market Demand Regression Analysis--New York City
Variable
pounds
springd
falld
winterd
bsbprice
bsbprsq
seatcap
entreepr
entreepsq
fshintns
avalprob
seasonal
N
Mean Std Dev Minimum Maximum
26 29.742 34.640
30
0.250
0.434
30
0.250
0.434
30
0.250
0.434
30
5.385
1.675
30 31.802 26.056
30 144.733 83.564
30 26.233
8.609
30 762.100 542.616
30 20.033 16.957
30
0.397
0.490
30
0.000
0.000
0.000 200.000
0.000
1.000
0.000
1.000
0.000
1.000
3.200
14.400
10.240 207.360
40.000 425.000
14.000
50.000
196.000 2500.000
5.000
75.000
0.000
1.000
0.000
0.000
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Table 14. Descriptive Statistics for Variables Used in Market Demand Regression Analysis--Philadelphia
Variable
pounds
springd
falld
winterd
bsbprice
bsbprsq
seatcap
entreepr
entreepsq
fshintns
avalprob
seasonal
N
Mean Std Dev Minimum Maximum
30 38.143 31.687
30
0.250
0.434
30
0.250
0.434
30
0.250
0.434
30
5.582
2.106
30 35.579 34.170
30 154.600 86.292
30 28.033 11.319
30 913.633 805.097
30 27.167 14.750
30
0.297
0.458
30
0.000
0.000
0.000 150.000
0.000
1.000
0.000
1.000
0.000
1.000
2.360
14.340
5.570 205.636
30.000 310.000
14.000
60.000
196.000 3600.000
12.500
75.000
0.000
1.000
0.000
0.000
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Table 15. Descriptive Statistics for Variables Used in Market Demand Regression Analysis--Atlanta
Variable
pounds
springd
falld
winterd
bsbprice
bsbprsq
seatcap
entreepr
entreepsq
fshintns
avalprob
seasonal
N
Mean Std Dev Minimum Maximum
21 22.560 20.055
30
0.250
0.434
30
0.250
0.434
30
0.250
0.434
30
4.828
1.048
30 24.404 10.585
25 166.243 59.838
25 21.633
7.933
25 530.717 466.974
21 17.857
8.549
30
0.233
0.424
30
0.000
0.000
0.000 100.000
0.000
1.000
0.000
1.000
0.000
1.000
2.800
8.340
7.840
69.556
77.000 310.000
14.000
44.000
196.000 1936.000
7.500
47.500
0.000
1.000
0.000
0.000
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Table 16. Descriptive Statistics for Variables Used in Market Demand Regression Analysis--San Francisco
Variable
pounds
springd
falld
winterd
bsbprice
bsbprsq
seatcap
entreepr
entreepsq
fshintns
avalprob
seasonal
N
Mean Std Dev Minimum Maximum
24 14.957 15.794
30
0.250
0.434
30
0.250
0.434
30
0.250
0.434
30
5.369
1.214
30 30.299 14.113
30 96.833 44.996
29 22.362
4.879
29 523.802 230.839
29 25.086 12.892
30
0.000
0.000
30
0.000
0.000
0.000
75.000
0.000
1.000
0.000
1.000
0.000
1.000
3.360
8.952
11.290
80.138
35.000 208.000
15.000
34.000
225.000 1156.000
10.000
57.500
0.000
0.000
0.000
0.000
Page 35
Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Table 17a. Multiple Regression Model Results.
Variable
Model 1
Basic multiple regression
Coef.
Estimate
t-value
Model 2
Regression weighted for
differing sampling rates by city
Coef.
Estimate
t-value
Model 3 (preferred model)
Regression weighted for
differing sampling rates by city,
with panel data corrections
Coef.
Estimate
t-value
Intercept
β0 = 24.68809
2.96
β0 = 33.19130
3.91
β0 = 33.5748
1.56
springd
β1 = -1.84152
-0.97
β1 = -1.85070
-1.01
β1 = -1.8528
-2.29 *
falld
β2 = -1.90568
-1.00
β2 = -1.98647
-1.08
β2 = -1.9669
-2.43 *
winterd
β3 = -3.03973
-1.59
β3 = -2.98039
-1.62
β3 = -2.9599
-3.65 *
bsbprice
β4 = -8.17358
-5.21 *
β4 = -10.53419
-6.77 *
β4 = -9.5475
-10.58 *
bsbprsq
β5 = 0.44750
4.33 *
β5 = 0.59732
5.75 *
β5 = 0.1636
2.43 *
seatcap
β6 = 0.13132
13.47 *
β6 = 0.17938
18.72 *
β6 = 0.1250
4.07 *
entreepr
β7 = 0.55924
1.47
β7 = 0.22755
0.58
β7 = 1.0524
0.82
entreepsq
β8 = 0.00495
0.85
β8 = 0.00571
0.92
β8 = -0.00228
-0.12
fshintns
β9 = 0.00606
0.12
β9 = 0.05671
1.24
β9 = -0.09307
-0.57
β10 = -5.57383
-3.12 *
β10 = -6.79105
-3.67 *
β10 = 5.4882
1.18
philly
β11 = 5.83828
3.14 *
β11 = 5.35152
2.80 *
β11 = 7.8870
1.25
atlanta
β12 = -7.87916
-3.73 *
β12 = -10.45135
-4.73 *
β12 = -10.1539
-1.43
β13 = -5.39146
-2.58 *
β13 = -4.57799
sanfran
* Indicates variable is statistically significant at α=0.05.
-2.57 *
β13 = -2.2933
-0.33
avalprob
Page 36
Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Table 17b. Multiple Regression Model Results (continued)
Model Test Statistic
N (12 obs. on each of 101 restaurants)1
2
Model 1
Basic Multiple Regression
1212
0.33
Model 2
Weighted for differing
sampling rates by city
1212
Model 3 (preferred model)
Weighted for differing
sampling rates by city with
panel data corrections
1212
0.38
n/a
R adj
F
47.40
58.06
n/a
-2∙LL
null
11578.6
11578.6
11578.6
model
11075.6
11084.0
9526.8
503 3
494.6 3
2051.8 3
13
13
14
22.36
22.36
23.68
n/a
n/a
23.51
2
-2∙LL
LR test stat = (-2∙LL
null
)-(-2∙LL
model
)
df
χ
2
df, α=0.05
Wald Z-test value of random effects
2
4
101 restaurants of 120 surveyed provided full information required for regression analysis.
Indicates value is significant at α=0.05
3 If LR test stat > χ2
df, α=0.05 , then model is significant at α=0.05
4 Wald Z-test value > Z
one-sided, α=0.05 = 1.65 indicates random effects are significant at α=0.05
1
2
Page 37
Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Table 18a. Estimates of mean monthly upscale niche seafood/sushi restaurant demand for farm-raised BSB by metro city and
season.1
Estimated
Demand per Restaurant in Niche
Demand All Niche Restaurants in Metro Area
Restaurants Summer
Spring
Fall
Winter
Summer
Spring
Fall
Winter
Metro Area
in Niche
lb/month lb/month lb/month lb/month lb/month lb/month lb/month lb/month
31.32
29.47
29.36
28.36
8,552
8,046
8,015
7,743
New York City
273
39.40
37.55
37.44
36.44
3,428
3,267
3,257
3,170
Philadelphia
87
23.24
21.38
21.27
20.28
1,975
1,818
1,808
1,723
Atlanta
85
19.08
17.23
17.11
16.12
5,609
5,064
5,031
4,739
San Francisco
294
1 Assumes restaurants purchase whole, 1.5-2.5 lb., fresh/chilled, farm-raised BSB at average price of comparable/substitute fish in
each metro area: New York City--$5.39/lb., Philadelphia--$5.58/lb., Atlanta--$4.83, and San Francisco--$5.37.
Table 18b. Estimates of mean annual upscale niche seafood/sushi restaurant demand for farm-raised BSB by metro city.1
Estimated Mean Annual
Metro Market Demand2
95% Confidence Intervals
Metro Area
lb/year
lb/year
New York City
97,066
66,284
127,762
Philadelphia
39,366
29,246
49,486
Atlanta
21,972
11,503
32,440
San Francisco
61,330
26,102
96,558
1 Assumes restaurants purchase whole, 1.5-2.5 lb., fresh/chilled, farm-raised BSB at average price of comparable/substitute fish in
each metro area: New York City--$5.39/lb., Philadelphia--$5.58/lb., Atlanta--$4.83, and San Francisco--$5.37.
2 Monthly values are multiplied by 3 months per season and summed to calculate mean annual totals.
Page 38
Assessing Metro Niche Market Demand for North Carolina Mariculture Products
FIGURES
Page 39
Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 1. Restaurant Seating Capacities Across All Sampled Niche Restaurants in All Four Metro Areas (N=115).
PERCENT
30
28.70%
24.35%
20
18.26%
12.17%
10
7.83%
5.22%
1.74%
0.87%
0.87%
375
425
0
25
75
125
175
225
275
325
Seating Capacity
Page 40
Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 2. Average Entrée Prices Across All Sampled Niche Restaurants in All Four Metro Areas (N=114).
PERCENT
40
37.72%
31.58%
30
20
11.40%
10
7.02%
4.39%
3.51%
2.63%
0.88%
0.88%
54
60
0
12
18
24
30
36
42
48
Ave. Entree Price ($/entree)
Page 41
Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 3. Type of Clientele for All Sampled Niche Restaurants in All Four Metro Areas (N=120)
PERCENT
70
63.33%
60
50
40
30
20
17.50%
8.33%
10
5.00%
4.17%
0.83%
0.83%
0
(missing)
city
sub urb an
sub urb an/city
tourist
tourist/city
Primary Clientele
Page 42
tourist/sub urb an/city
Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 4. Fish Purchasing Frequency for All Sampled Niche Restaurants in All Four Metro Areas (N=120)
PERCENT
50
41.67%
40
30
27.50%
25.00%
20
10
4.17%
0.83%
0.83%
0
daily
weekly
daily/weekly daily/weekly/monthly
other
Fish Purchase Freq
Page 43
(missing)
Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 5. Current Black Sea Bass Market Penetration Across All Sampled Niche Restaurants in All Four Metro Areas (N=120)
PERCENT
70%
70
60
50
40
30
25%
20
10
5%
0
(missing)
no
yes
Currently Buy BSB
Page 44
Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 6. Importance of Fish Size to Restaurant Chefs in Niche Market (N=97)
(scale: 1 = not important, 10 = very important)
PERCENT
60
51.55%
50
40
30
20.62%
20
19.59%
10
5.15%
2.06%
1.03%
0
1
2
3
4
5
6
7
8
9
Fish Size (Weight)
Page 45
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 7. Chefs' Preferred Black Sea Bass Fish Size (N=120)
PERCENT
50
41.67%
40
34.17%
30
20
10
9.17%
8.33%
5.83%
0.83%
0
(missing)
1.0-1.5
1.5-2.0
2.0-2.5
2.5-3.0
Preferred BSB Whole Wgt (lb s)
Page 46
>3.0
Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 8. Chefs' Willingness to Purchase Smaller-Sized Black Sea Bass (N=120)
PERCENT
90
81.67%
80
70
60
50
40
30
20
13.33%
10
5.00%
0
(missing)
no
yes
Buy <=1lb BSB at Same Price?
Page 47
Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 9. Chefs' Willingness to Purchase Smaller-Sized Black Sea Bass at a Discounted Price (N=120)
PERCENT
70%
70
60
50
40
30
25%
20
10
5%
0
(missing)
no
yes
Buy <=1lb BSB at Lower Price?
Page 48
Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 10. Importance of Fillet Yield to Restaurant Chefs in Niche Market (N=97)
(scale: 1 = not important, 10 = very important)
PERCENT
50
44.33%
40
30
21.65%
20
11.34%
10.31%
10
2.06%
9.28%
1.03%
0
1
2
3
4
5
6
7
8
9
Fillet Yield
Page 49
10
Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 11. Chefs' Assessments of Comparable/Substitute Fish Species for Black Sea Bass (N=120)
FREQ.
Comparab le/Sub stitute Fish
snapper
34
striped b ass
19
(missing)
15
grouper
13
mahi
8
tuna
7
b ranzino
5
halib ut
4
wahoo
3
b arramundi
2
fluke
2
corvina
1
dory
1
escolar
1
salmon
1
sole
1
swordfish
1
trigger
1
wreckfish
1
0
10
20
30
FREQUENCY
Page 50
40
Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 12. Importance of Continuous Availability (of fish supply) to Restaurant Chefs in Niche Market (N=98)
(scale: 1 = not important, 10 = very important)
PERCENT
40
34.69%
30
22.45%
20
15.31%
10
7.14%
7.14%
3.06%
2.04%
6.12%
2.04%
0
1
2
3
4
5
6
7
8
9
Continuous Availab ility
Page 51
10
Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 13. Percentage of Chefs Reporting Problems with Availability of Comparable/Substitute Fish (N=120)
PERCENT
80
73.33%
70
60
50
40
30
22.50%
20
10
4.17%
0
(missing)
no
yes
Availab ility Prob lems w. Sub stitute Fish
Page 52
Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 14. Percentage of Chefs Reporting Problems with (Ocean-caught) Black Sea Bass Availability (N=120)
PERCENT
50
46.81%
42.55%
40
30
20
10.64%
10
0
(missing)
no
yes
BSB Availab ility Prob lems
Page 53
Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 15. Importance of Live (vs. Fresh/Chilled) Product Form to Restaurant Chefs in Niche Market (N=98)
(scale: 1 = not important, 10 = very important)
PERCENT
70
66.33%
60
50
40
30
20
13.27%
11.22%
10
7.14%
1.02%
1.02%
0
1
2
3
4
5
6
7
8
9
Live Product (vs. Fresh/Chilled)
Page 54
10
Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 16. Importance of Fresh/Chilled (vs. Frozen) Product Form to Restaurant Chefs in Niche Market (N=98)
(scale: 1 = not important, 10 = very important)
PERCENT
50
42.86%
40
30
21.43%
20.41%
20
11.22%
10
2.04%
2.04%
0
1
2
3
4
5
6
7
8
9
Fresh/Chilled Product (vs. Frozen)
Page 55
10
Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 17. Chefs' Preferred Product Forms (N=120)
PERCENT
90
85.83%
80
70
60
50
40
30
20
10
5.00%
4.17%
4.17%
0.83%
0
live/fresh
fresh
fresh/frozen
fresh/other
(missing)
Preferred Product Form
Page 56
Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 18. Percentage of Chefs Interested in Purchasing Frozen Fillets (N=120)
PERCENT
90
83.33%
80
70
60
50
40
30
20
12.50%
10
4.17%
0
(missing)
no
yes
Interested in Frozen Fillets
Page 57
Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 19. Importance of Product Taste to Restaurant Chefs in Niche Market (N=97)
(scale: 1 = not important, 10 = very important)
PERCENT
100%
100
90
80
70
60
50
40
30
20
10
0
1
2
3
4
5
6
7
8
9
Taste
Page 58
10
Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 20. Importance of Product Freshness to Restaurant Chefs in Niche Market (N=97)
(scale: 1 = not important, 10 = very important)
PERCENT
100%
100
90
80
70
60
50
40
30
20
10
0
1
2
3
4
5
6
7
8
9
Freshness
Page 59
10
Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 21. Importance of Product Visual Appearance to Restaurant Chefs in Niche Market (N=97)
(scale: 1 = not important, 10 = very important)
PERCENT
90
80.41%
80
70
60
50
40
30
20
11.34%
8.25%
10
0
1
2
3
4
5
6
7
8
9
Visual Appearance
Page 60
10
Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 22. Importance of Product Skin Color to Restaurant Chefs in Niche Market (N=97)
(scale: 1 = not important, 10 = very important)
PERCENT
60
56.70%
50
40
30
20
15.46%
11.34%
10
6.19%
3.09%
2.06%
3.09%
2.06%
0
1
2
3
4
5
6
7
8
9
Skin Color
Page 61
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 23. Importance of Product Flesh Color to Restaurant Chefs in Niche Market (N=97)
(scale: 1 = not important, 10 = very important)
PERCENT
69.07%
70
60
50
40
30
20
17.53%
9.28%
10
4.12%
0
1
2
3
4
5
6
7
8
9
Flesh Color
Page 62
10
Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 24. Importance of Product Texture to Restaurant Chefs in Niche Market (N=97)
(scale: 1 = not important, 10 = very important)
PERCENT
100
96.91%
90
80
70
60
50
40
30
20
10
3.09%
0
1
2
3
4
5
6
7
8
9
Texture
Page 63
10
Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 25. Importance of Product Fat Content to Restaurant Chefs in Niche Market (N=97)
(scale: 1 = not important, 10 = very important)
PERCENT
40
30.93%
30
20.62%
20
13.40% 13.40%
12.37%
10
6.19%
2.06%
1.03%
0
1
2
3
4
5
6
7
8
9
Fat Content
Page 64
10
Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 26. Chefs' Preferred Product Fat Content (N=120)
PERCENT
50
44.17%
40
33.33%
30
20
11.67%
10
5.00%
5.00%
0.83%
0
low
moderate
mod/high
high
does not matter (missing)
Preferred BSB Fat Content
Page 65
Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 27. Importance of Number of Bones to Restaurant Chefs in Niche Market (N=97)
(scale: 1 = not important, 10 = very important)
PERCENT
30
27.84%
20
18.56%
16.49%
11.34%
9.28%
10
6.19%
5.15%
4.12%
1.03%
0
1
2
3
4
5
6
7
8
9
Numb er of Bones
Page 66
10
Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 28. Importance to Restaurant Chefs in Niche Market of Product Having Empty Digestive Tract When Shipped (N=98)
(scale: 1 = not important, 10 = very important)
PERCENT
40
30.61%
30
21.43%
20
13.27%
12.24%
12.24%
10
7.14%
1.02%
1.02%
1.02%
0
1
2
3
4
5
6
7
8
9
Empty Digestive Tract
Page 67
10
Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 29. Importance of Domestic Product Origin to Restaurant Chefs in Niche Market (N=97)
(scale: 1 = not important, 10 = very important)
PERCENT
19.59%
20
18.56% 18.56%
19
18
16.49%
17
16
15
14
13
12
11
10
9
8.25%
8.25%
8
7.22%
7
6
5
4
3
2.06%
2
1.03%
1
0
1
2
3
4
5
6
7
8
9
Domestically Produced
Page 68
10
Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 30. Importance of Certification of Product Origin to Restaurant Chefs in Niche Market (N=97)
(scale: 1 = not important, 10 = very important)
PERCENT
30
28.87%
20
15.46%
13.40%
12.37%
10
8.25%
7.22%
5.15%
3.09%
3.09%
3.09%
0
1
2
3
4
5
6
7
8
9
Certificate of Origin
Page 69
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 31. Importance of Product Traceability to Restaurant Chefs in Niche Market (N=97)
(scale: 1 = not important, 10 = very important)
PERCENT
30
23.71%
22.68%
20
15.46%
14.43%
9.28%
10
7.22%
6.19%
1.03%
0
1
2
3
4
5
6
7
8
9
Traceab ility
Page 70
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 32. Importance of Farm-Raised Production Method to Restaurant Chefs in Niche Market (N=97)
(scale: 1 = not important, 10 = very important)
PERCENT
30
28.87%
20
15.46%
13.40%
10.31%
10.31%
9.28%
10
6.19%
6.19%
0
1
2
3
4
5
6
7
8
9
Farm-Raised
Page 71
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 33. Importance of Ocean-caught Production Methods to Restaurant Chefs in Niche Market (N=97)
(scale: 1 = not important, 10 = very important)
PERCENT
40
38.14%
30
20.62%
20
13.40% 13.40%
10
6.19%
4.12%
2.06%
2.06%
0
1
2
3
4
5
6
7
8
9
Wild-Caught
Page 72
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 34. Chefs' Preferred Production Method (N=120)
PERCENT
50
45.00%
43.33%
40
30
20
10
6.67%
5.00%
0
(missing)
does not matter
farm-raised
wild-caught
Preferred Production Method
Page 73
Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 35. Importance of Organic Production Methods to Restaurant Chefs in Niche Market (N=97)
(scale: 1 = not important, 10 = very important)
PERCENT
30
22.68%
22.68%
20
18.56%
16.49%
9.28%
10
4.12%
1.03%
1.03%
3
4
4.12%
0
1
2
5
6
7
8
9
Organically Grown
Page 74
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 36. Importance of Product Promotion by Grower/Supplier to Restaurant Chefs in Niche Market (N=97)
(scale: 1 = not important, 10 = very important)
PERCENT
50
43.30%
40
30
25.77%
20
10.31%
10
6.19%
3.09%
4.12%
3.09%
1.03%
1.03%
6
7
2.06%
0
1
2
3
4
5
8
9
Product Promotion
Page 75
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 37. Importance of Nutritional Labeling to Restaurant Chefs in Niche Market (N=97)
(scale: 1 = not important, 10 = very important)
PERCENT
40
30.93%
30
27.84%
20
11.34%
10
8.25%
5.15%
6.19%
5.15%
3.09%
1.03%
1.03%
0
1
2
3
4
5
6
7
8
9
Nutritional Lab eling
Page 76
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 38. Importance of Quality Certification to Restaurant Chefs in Niche Market (N=96)
(scale: 1 = not important, 10 = very important)
PERCENT
40
32.29%
30
20.83%
20
16.67%
11.46%
10
9.38%
9.38%
8
9
0
1
2
3
4
5
6
7
Certificate of Quality
Page 77
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
Figure 39. Estimated New York City Niche Market Demand Curve for Farm-Raised Black Sea Bass (2008-year dollars).
(Price is wholesale price paid by restaurants to supplier for whole, chilled/fresh, farm-raised Black Sea Bass 1.5-2.5 lbs. in size.)
Page 78
Assessing Metro Niche Market Demand for North Carolina Mariculture Products
APPENDIX 1 -- SURVEY INSTRUMENT
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
FARMED BLACK SEA BASS MARKET RESEARCH PROJECT
Restaurant Chef/Manager Survey
We invite you to participate in a research study regarding market demand for a new seafood
product: farm-raised Black Sea Bass grown in North Carolina. Dr. Chris Dumas of the University
of North Carolina Wilmington is conducting the study. Dr. Dumas is a member of the Economics
and Finance faculty at the university and is trying to evaluate market demand for farm-raised
Black Sea Bass. Dr. Dumas does not stand to benefit financially from this study.
If you agree to participate in this research project, you will be asked questions about your
restaurant's habits and preferences regarding fish purchases and preparation in general, and Black
Sea Bass in particular. We ask that you provide us only with the name of the city where your
restaurant is located and your job position/title so that you and your restaurant can remain
anonymous. The survey will take approximately thirty minutes of your time. You may stop the
survey at any time or refuse to answer any question. You will not be treated differently or
penalized in any way if you choose not to participate or if you choose to end the visit early.
For questions about the research project, please call Dr. Chris Dumas at 910-962-4026. For
questions about your rights as a research subject, please call the Chairperson of UNC Wilmington's
Institutional Review Board, Dr. Candice Gauthier at 910-962-3558.
City: ___________________________________
Date:_________________________
1.1.
What is the seating capacity of this restaurant? __________
1.2.
Are you closed any months during the year? __________
If yes, which months? ________________________
1.3.
What is the average entrée price at this restaurant? ___________
1.4.
What is your primary clientele?
a) tourist
b) local/suburban
1.5.
1.6.
c) professional/city
What fish product form do you prefer to purchase?
a) live
b) fresh/chilled
c) frozen fillet
How often do you purchase fish?
a) monthly
b) weekly
c) daily
d) other ___________
d) other ___________
d) other __________
1.7.
Approximately what % of total sales per month is fish? __________
1.8.
Who currently provides your fish? ___________________________
1.9.
Do you currently purchase black sea bass?
1.10.
What is (would be) your preferred method of preparing black sea bass?
a) sushi b) sashimi
c) steamed
d) broiled
e) sautéed
f) deep-fried
g) baked
h) other __________
a) yes b) no
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
1.11.
What level of fat do you prefer for your method of black sea bass preparation?
a) low
b) moderate
c) high
d) does not matter
1.12.
What size (whole weight) black sea bass do (would) you prefer to purchase?
a) 1.0-1.5 lb
b) 1.5-2.0 lb
c) 2.0-2.5 lb
d) 2.5-3.0 lb
e) >3.0 lb
1.13.
Do you experience problems with the availability of black sea bass during the year?
a) yes
b) no
If yes, which month(s): __________________________
1.14.
Do (would) you prefer farm-raised or ocean-caught black sea bass?
a) farm-raised b)ocean-caught c)does not matter
1.15.
Would you purchase whole black sea bass that are 1.0 lb or less for the same price
as the larger fish?
a) yes
b) no
1.16.
What about if the 1.0 lb or less black sea bass were cheaper?
a) yes
b) no
How important are the following attributes of BLACK SEA BASS for customer acceptance in your
business? Circle one. (1 = not important, 5 = average importance, 10 = very important)
2.1.Continuous availability
2.2. Live product
2.3. Chilled product
2.4. Empty digestive tract
2.5. Freshness
2.6. Number of bones
2.7. Fillet yield
2.8. Size
2.9. Skin color
2.10. Flesh color
2.11. Fat content
2.12. Taste
2.13. Texture
2.14. Visual appearance
2.15. Nutritional labeling
2.16. Domestic product
2.17. Certificate of origin
2.18. Certificate of quality
2.19. Traceability
2.20. Farm-raised
2.21. Ocean-caught
2.22. Promotion
2.23. Organically grown
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
3.1.
What other fish would be most comparable to black sea bass in your business?
That is, black sea bass would be a reasonable substitute for what fish?
_______________________________
3.2.
Do you experience problems with the availability of the
comparable/substitute fish during the year?
a) yes
b) no
If yes, which month(s): _________________________
3.3.
If fresh/chilled black sea bass of similar quality to those of the sample fish provided were
available at the same price per pound as the comparable/substitute fish you listed, how
much black sea bass would you likely purchase per month in each of the following
seasons?
WINTER - (Jan-Mar)
SPRING - (Apr-Jun)
SUMMER - (Jul-Sep)
FALL – (Oct-Dec)
3.4.
What if the price per pound of black sea bass were 20% more than the price of
the comparable/substitute fish?
WINTER - (Jan-Mar)
SPRING - (Apr-Jun)
SUMMER - (Jul-Sep)
FALL – (Oct-Dec)
3.5.
__________ lbs. black sea bass per month
__________ lbs. black sea bass per month
__________ lbs. black sea bass per month
__________ lbs. black sea bass per month
What if the price per pound of black sea bass were 20% less than the price of
the comparable/substitute fish?
WINTER - (Jan-Mar)
SPRING - (Apr-Jun)
SUMMER - (Jul-Sep)
FALL – (Oct-Dec)
3.6.
__________ lbs. black sea bass per month
__________ lbs. black sea bass per month
__________ lbs. black sea bass per month
__________ lbs. black sea bass per month
__________ lbs. black sea bass per month
__________ lbs. black sea bass per month
__________ lbs. black sea bass per month
__________ lbs. black sea bass per month
Would you consider purchasing a frozen fillet black sea bass product if the price
were discounted relative to the price of the fresh/chilled whole sea bass?
a) yes
b) no
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Assessing Metro Niche Market Demand for North Carolina Mariculture Products
4.1. In the space below, please share any problems you foresee with restaurant sales
or marketing of black sea bass:
4.2. In the space below, please provide any questions/comments/concerns you may have
regarding this survey including any improvements that can be made:
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