7. The tilapia market

Among all the other stuff you need to do the attention of the other side of your business is also required. The sales side of  your business is as important as the production side and you will need to identify who it is you are going to sell your product to, in what from and at what price. There is some bad news in that pricing in the South African market is largely unknown, owing to the lack of product. The good news is that this means you can be price setter and not a price taker.

It is helpful to remember that the fish you produce using our systems is 100% hormone free, 100% steroid free, 100% antibiotic free(!) and 100% chemical free. It is arguably the cleanest, healthiest farmed protein you can find, which means it is a premium quality product that cannot and should not be compared with the cheap Chinese frozen fish produced who knows how and who knows how long ago. They are not the same thing at all.

Also in your favour is the supply and demand ratios. Perhaps uniquely in the local markets the gap between supply of fresh never frozen fish and demand is unknown because there is such a small basis of comparison on which to calculate it. A cursory Google examination however will quickly reveal that there are incredible shortages of tens of thousands of tons of tilapia into local economies and growing.

The Google examination of other successful aquaculture businesses will also reveal that 99 times out of a hundred your most profitable markets will be your local ones. Your scale of operation will also influence your chosen markets – a business running at an R500M capex is going to have a formalised market in place that will deal with larger scale distribution networks than a smaller 200 ton per annum operation. This is not to say the smaller operation will be any less profitable, in fact it may find more profitable markets more easily owing to it’s size than the larger more cumbersome operation.

The bottom line is that you/we have no idea about the size of the market, and that the best you can do is to try and produce to fill the as yet unquantified demand. Given that tilapia production at the moment is measured in tens of tons per annum, and that juts north of us shortages are estimated in the tens of thousands of tons, there is a long, long way to go before any satiation of the market is ever going to take place. The FAO is a good source for providing reasonable estimates for these numbers that you can verify for yourself.

You will need to find your market and as you grow your business, expand into that market on an ongoing basis. New markets may present themselves as you go and the process which begins with harvesting your fish will dictate to you what processing, packaging, storage and distribution you are going to need. Remember that you need to include these post production costs in your business model and that scale again will influence the degree to which you can reduce these costs as you go.