Economic Aspects of the Japanese Kamaboko Industry MYLES RAIZIN and LLOYD REGIER lJapanese name in parentheses. Table l.-Varialions of kamaboko (Suzuki, 1981). manufacture of which are discussed in the following section. To produce kamaboko from surimi (surimi method), the surimi must first be thawed. After thawing, the surimi is really no different than the minced/ washed fish used in the fresh fish method except that it already contains cryoprotectants which are required to manufacture kamaboko. The decision to use either surimi or fresh fish as a base raw material for the manufacture of kamaboko is solely dependent upon geographic and economic considera- tions. The quality of the final product is not altered by the method employed. The resilient texture of kamaboko, referred to as "ashi" by the Japanese, is a major factor in determining product quality. The ashi is determined by the species, freshness, and size of the fish used, fishing method, and fishing season (Suzuki, 1981). The fresh-fish method is limited to a scale of production directly associated with raw fish availability, while the suri- mi method enables large-scale produc- tion associated with the ability to store Introduction The newest and most promising sea- food technology impacting U.S. markets in recent years is an ancient Japanese fish paste process which yields a final product called kamaboko, a fish protein gel which is flavored and formed to suit the tastes and preferences of consumers. Many varieties of kamaboko have been developed for the Japanese market (Table 1), and since 1976, several forms of kamaboko have been exported from Japan to the United States including: A lobster tail analog, scallop analog, shrimp analog, and crab analog. In this paper we discuss various economic aspects of trade, marketing, and produc- tion which affect the kamaboko indus- try of Japan and impact the U.S. market for Japanese kamaboko. Kamaboko Manufacture Kamaboko is manufactured from minced/washed fish which is ground with sugar and other flavorings, shaped, heated, and cooled to form a final pro- duct. To produce minced/washed fish from fresh fish, the fish is headed and gutted, deboned, and washed. The minced/washed fish may go directly into kamaboko production (fresh-fish method) or it may be frozen and used later. To prevent deterioration of the flesh in frozen form, cryoprotectants (sugars) are added to the minced fish. This process yields an intermediate product called surimi, the history and The authors are with the Charleston Laboratory, Southeast Fisheries Center, National Marine Fish- eries Service, NOAA, p.o. Box 12607, Charleston, SC 29412-0607. Mention of trade names, firms, or commercial products does not imply endorse- ment by the National Marine Fisheries Service, NOAA. 60 Item By heating method: By shape: Variation ' Steamed Steamed and broiled Broiled Broiled (hampen) Fried (tempura, satsuma age) Piled on a thin wooden slab (itatsuki) Tubular (chikuwa) Ball, bar, or square (age) Leaf (susa) Needle (soba) Rolled (datemaki) Chipped (kezuri) large quantities of frozen surimi. Where the fresh-fish method is job-oriented, the surimi method is process- and flow- oriented which, in most cases, translates to a more efficient use of capital through larger outputs using similar capital re- quirements, i.e., cost of plant, cost of machinery, and fixed overhead costs. The surimi method, however, has addi- tional costs associated with the freezing, holding, and handling of the interme- diate product. If these additional costs are greater than the efficiency gains of the process- and flow-operation, it may be economical to forego the surimi pro- cess in favor of producing kamaboko directly from fresh fish. In 1984, about 38 percent of Japanese kamaboko was produced from fresh fish 1 • Japanese domestic production of ka- maboko totaled 1,020,028 metric tons (t) in 1984 (Table 2). Total production in- creased 11.7 percent from the 1980 level. Exports of kamaboko increased fifteen- fold, growing from 0.25 percent of total production in 1980 to 3.5 percent in 1984. U.S. imports, as a percentage of total Japanese exports, grew from 44.7 percent in 1981 to 82.1 percent in 1984. Surimi Manufacture The Japanese have fished for walleye pollock, Theragra chalcogrammo., in the waters between Japan and Alaska for many years. The primary value of the fish had traditionally been attributed to its roe, considered a delicacy in Japan. Although the flesh is also valued, the quality of fillets processed from the fish- 'Assumptions are surimi produced in year twas processed into kamaboko in year t, and the aver- age surimi-based kamaboko product contained 60 percent surimi and had a yield of 1.67, kamaboko to surimi. Marine Fisheries Review
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Economic Aspects of the Japanese Kamaboko Industry
MYLES RAIZIN and LLOYD REGIER
lJapanese name in parentheses.
Table l.-Varialions of kamaboko (Suzuki,1981).
manufacture of which are discussed inthe following section.
To produce kamaboko from surimi(surimi method), the surimi must firstbe thawed. After thawing, the surimi isreally no different than the minced/washed fish used in the fresh fishmethod except that it already containscryoprotectants which are required tomanufacture kamaboko. The decision touse either surimi or fresh fish as a baseraw material for the manufacture ofkamaboko is solely dependent upongeographic and economic considerations. The quality of the final productis not altered by the method employed.The resilient texture of kamaboko,referred to as "ashi" by the Japanese,is a major factor in determining productquality. The ashi is determined by thespecies, freshness, and size of the fishused, fishing method, and fishingseason (Suzuki, 1981).
The fresh-fish method is limited to ascale of production directly associatedwith raw fish availability, while the surimi method enables large-scale production associated with the ability to store
Introduction
The newest and most promising seafood technology impacting U.S. marketsin recent years is an ancient Japanesefish paste process which yields a finalproduct called kamaboko, a fish proteingel which is flavored and formed to suitthe tastes and preferences of consumers.Many varieties of kamaboko have beendeveloped for the Japanese market(Table 1), and since 1976, several formsof kamaboko have been exported fromJapan to the United States including: Alobster tail analog, scallop analog,shrimp analog, and crab analog. In thispaper we discuss various economicaspects of trade, marketing, and production which affect the kamaboko industry of Japan and impact the U.S. marketfor Japanese kamaboko.
Kamaboko Manufacture
Kamaboko is manufactured fromminced/washed fish which is groundwith sugar and other flavorings, shaped,heated, and cooled to form a final product. To produce minced/washed fishfrom fresh fish, the fish is headed andgutted, deboned, and washed. Theminced/washed fish may go directlyinto kamaboko production (fresh-fishmethod) or it may be frozen and usedlater. To prevent deterioration of theflesh in frozen form, cryoprotectants(sugars) are added to the minced fish.This process yields an intermediateproduct called surimi, the history and
The authors are with the Charleston Laboratory,Southeast Fisheries Center, National Marine Fisheries Service, NOAA, p.o. Box 12607, Charleston,SC 29412-0607. Mention of trade names, firms,or commercial products does not imply endorsement by the National Marine Fisheries Service,NOAA.
60
Item
By heatingmethod:
By shape:
Variation '
SteamedSteamed and broiledBroiledBroiled (hampen)Fried (tempura, satsuma age)
Piled on a thin woodenslab (itatsuki)
Tubular (chikuwa)Ball, bar, or square (age)Leaf (susa)Needle (soba)Rolled (datemaki)Chipped (kezuri)
large quantities of frozen surimi. Wherethe fresh-fish method is job-oriented,the surimi method is process- and floworiented which, in most cases, translatesto a more efficient use of capital throughlarger outputs using similar capital requirements, i.e., cost of plant, cost ofmachinery, and fixed overhead costs.The surimi method, however, has additional costs associated with the freezing,holding, and handling of the intermediate product. If these additional costsare greater than the efficiency gains ofthe process- and flow-operation, it maybe economical to forego the surimi process in favor of producing kamabokodirectly from fresh fish. In 1984, about38 percent of Japanese kamaboko wasproduced from fresh fish 1•
Japanese domestic production of kamaboko totaled 1,020,028 metric tons (t)in 1984 (Table 2). Total production increased 11.7 percent from the 1980 level.Exports of kamaboko increased fifteenfold, growing from 0.25 percent of totalproduction in 1980 to 3.5 percent in1984. U.S. imports, as a percentage oftotal Japanese exports, grew from 44.7percent in 1981 to 82.1 percent in 1984.
Surimi Manufacture
The Japanese have fished for walleyepollock, Theragra chalcogrammo., inthe waters between Japan and Alaska formany years. The primary value of thefish had traditionally been attributed toits roe, considered a delicacy in Japan.Although the flesh is also valued, thequality of fillets processed from the fish-
'Assumptions are surimi produced in year twasprocessed into kamaboko in year t, and the average surimi-based kamaboko product contained 60percent surimi and had a yield of 1.67, kamabokoto surimi.
Marine Fisheries Review
Table 2.-Kamaboko production and export from Japan Table 3.-Surlmi production, in metric tons, from wall-In metric tons" 1980-84. eye pollock in Japan' .
Percent Percent of Percent Onshore No. of Offshore Factory TotalNation Exports change total change produc- plants produc- ships produc-
and year (t) from 1980 export per annum Year tion (n=24) lion (n=19) tion
1971-83' 149,213 189,368Kamabokoproduction 'From a report to the Overseas Fishery Cooperative of
Japan Japan by the Deep Sea Trawlers Association, 1983, 1031980 913,186 p., unpub!., copy on file af SEFC Charleston Laboratory,1981 948,882 +3.9 +3.9 Charleston, S.C.1982 960,900 +5.2 + 1.3 'These averages are significantly different at the 0.011983 996,171 +9.1 +3.6 probability level with t = - 4.61 and d.f. = 16.8.1984 1,020,028 +11.7 +2.3
'Data furnished by Hirochika Katayama, Japan-U.S. TradeOffice, Washington, D.C.
ery was low due to deterioration of theflesh even after freezing.
To prevent deterioration, the fish werewashed, minced, and mixed with sugarand polyphosphate to produce mu-en(salt free) surirni. Ka-en (salted) surimiwas also produced by adding salt to themixture, replacing the polyphosphate.K. Nishiya has been credited with thediscovery of the process and preliminary research regarding methodology(Nishiya et al., 1961), and by 1964 largescale onshore production of pollocksurimi was realized2.
Surimi has developed its own marketas an input for the production of kamaboko, and a number of firms have appeared in the industry that produce onlysurimi which is sold on the open market and further produced into kamabokoby another set of firms. If the cost perunit of surirni is less than the cost of procuring and mincing a unit of fish, itwould be favorable to purchase surimiand forego the mincing and washingoperations.
A fairly strong analogy can be drawnbetween surimi and frozen fish blocks.Both participate in factor markets in thatthese goods are not directly consumed;surirni and fish blocks are the major costand quantity components of kamabokoand "fish sticks and portions," respectively; the demand for surirni and frozenblocks is derived directly from the demand for their final products; and thesupply of each input factor is a functionof the biological abundance of speciesutilized and fishing effort directedtoward those species.
In 1964 there were 39 surirni factorieslocated in Japan which produced a relatively low-grade surimi. The low quality was attributable to the length of timerequired between catch (offshore) andprocess (onshore). To increase the quality of pollock surimi, factory vesselswere introduced in 1965. The numberof factory vessels as a percentage of totalfactories grew from 4.7 in 1965 to 26.5
'From a report to the Overseas Fishery Cooperative of Japan by the Japan Deep Sea TrawlersAssociation, 1983, 103 p., unpub!. A copy of thisreport is on file at the SEFC Charleston Laboratory, NMFS, NOAA, P.O. Box 12W7, Charleston,SC, 29412-0607.
48(4), 1986
in 1982 (Table 3). Much of this increaseresulted from the decline in the numberof onshore facilities and not from thegrowth in the number of offshore factory ships.
Average annual production of factoryvessels from 1971 to 1983 was muchlarger than that of onshore facilities,189,368 t/year and 149,213 t/year,respectively. Supply from onshorefacilities for the same period totaled1,939,769 t while the supply from factory vessels totaled 2,461,781 t.
Although the number of onshorefacilities had generally declined over theperiod, the average annual productionper plant had grown dramatically. In1972, there were 105 plants producingan average of 1,536 t of surimi, compared with 61 plants in 1983 producingan average of 2,623 t. This reflects anincrease in production per plant of 71
percent. About 90 percent of all surimiis processed from walleye pollock, butAtka mackerel, Pleurogrammus monopterygius; croaker (Sciaenidae); jackmackerel, Trachurus symmetricus; andlizardfish, Synodus lucioceps, are alsoused (Hotta, 1982).
Japanese domestic production of surimi totaled 384,275 tin 1984 (Table 4),an increase of 5.5 percent from the 1980level. Domestic firms utilized 99.3 percent of the 1984 production. The Japanese exported 2,580 t in 1984, about3.5 times the 1980 level. The UnitedStates was the major importer of surimifrom 1980 through 1984.
Surimiand Kamaboko
Production Ouside of Japan
The limited production of surimi andkamaboko outside Japan through 1984
61
examining relative prices. In this case,the following condition must hold:
Pollock surimiJp < Pollock surimiTPP
Croaker surimiJp Croaker surimiTPp
These price ratios are referred to as theterms of trade and are one factor indetermining both the levels and thedirection that trade occurs.
A New Zealand company manufactured surimi from barracouta, Thyrsitesatun, on an experimental basis, andfound that the process was not economically feasible due to a yield fromround barracouta of 17-18 percent forsurimi compared with a yield of 33 percent for fish blocks. The U.S.S.R. hasunsuccessfully attempted to producesurimi from walleye pollock for theJapanese market. The reason most commonly given for their failure is "poorquality product" (Hotta, 1982).
Industry Structure
The Japanese offshore surimi industryis controlled by five firms, three ofwhich produce 90 percent of the totalproduct (Hotta, 1982). These firms selltop-grade surimi to a large number ofkamaboko producers in Japan and alimited number of kamaboko producersoutside of Japan. The majority of firmsoutside Japan are subsidiaries of Japanese firms; therefore, a limited amountof money in the form of labor cost, overhead cost, taxes, and cost of plant actually leaves Japan. This is especiallytrue since these plants use Japanesemachinery and equipment in theiroperations.
The Economic Impactof EEZ Legislation
The Japanese have lost access to amajor portion of Alaska's walleye pollock fishery in the Bering Sea with theadvent of the 200-mile U.S. ExclusiveEconomic Zone (EEZ), but the resourceis still available through joint ventureswith U.S. fishermen. It is likely thatthese arrangements have translated intohigher fish raw material costs for Jap-
came, for the most part, from joint ventures established by Japanese companies. The fish used for surimi production are those that produce a high-valueproduct for the Japanese market. Croaker has been the most popular speciesused due to its high quality ashi. Participating countries include, but are notlimited to, Thailand, Taiwan, and theUnited States. Kamaboko production inthese countries relies for the most parton pollock surimi imported from Japan.To achieve economic benefits from thismethod of trade in surimi, i.e., croakersurimi imported to Japan and pollocksurimi exported from Japan, the Japanese must have a comparative advantage in the production of pollock surimiand a comparative disadvantage in theproduction of croaker surimi.
A simplistic estimate of comparativeadvantage/disadvantage may be made by
Table 4.-Suriml production and export from Japan Inmetric tons" 1980-84.
Percent Percent of PercentNation Exports change total change
'Data were furnished by Hirochika Katayama, Japan-U.S.Trade Office, Washington, D.C.
62
where:lPTPP
Japanese price andTrading partner's price.
anese offshore producers. It is not clear,however, as to the extent the UnitedStates benefits from the EEZ legislation.Given the structure of the Japanese offshore industry, few firms supplying alarge number of buyers, it is likely thatsurimi producers are passing thesehigher costs on to kamaboko producers,who, in turn, may pass at least a portion on to consumers both in Japan andin the United States. Therefore, in astrict welfare context, the Americanconsumer may be forced to pay a higherprice for Japanese kamaboko, reducingthe sum of the benefits of the EEZ tothe United States, i.e., American fishermen gain and American consumers ofJapanese-produced kamaboko lose, butsince the major market for kamabokois Japan, U.S. society, as a whole,should gain from these arrangements.
Substitution of CrabAnalog for King Crab Meat
The crab analog form of kamabokohas gained wide acceptance in theUnited States. It first appeared on themarket in 1978 in small quantities in theform of imitation3 crablegs, and morerecently lump and chunk forms of imitation crabmeat have been introduced.
The export of crab analog as a percentage of total Japanese kamaboko export increased from 64.1 percent in 1980to 98.9 percent in 1984. In 1984 theUnited States imported 29,188 t whichaccounted for 82.4 percent of Japaneseexports (Table 5). Although it is apparent that the Japanese have been verysuccessful in marketing crab analog, itis not clear why. Many people postulatethat an increase in king crab, Paralithodes camtschatika, prices, due todrastically reduced landings, encouraged consumers to purchase the crabanalog as a lower priced replacement.
To investigate this assumption, a pricefunction to estimate the demand for kingcrab meat at the wholesale level wasspecified. In the absence of price data(due to the newness of imported crabanalog), a dummy variable was incor-
'The term "imitation" is descriptive of the product. The exact nomenclature as specified by theFDA has not been resolved.
Marine Fisheries Review
Table 5.-Crab analog export from Japan in metrictons', 1980-84.
'Data were furnished by Hirochika Katayama, Japan-U.S.Trade Office, Washington, D.C.
porated into the regression which reflects the effect on king crab prices thatwas not predicted by historical demandand supply patterns in the years 198184.
A structural change in the marketingof crab meat which concentrated on therestaurant trade was coincidental withthe large increases in demand for crabanalog in the period 1981-84 (Table 5).Therefore, we assume that the dummyvariable is capturing the price effect ofthe summation of the new marketing initiatives for king crab and the increaseddemand for the Japanese karnaboko product. The marketing initiatives have apositive effect on price through increased demand for crab meat whichcauses the dummy variable to have apositive sign. Conversely, the replacement factor of crab analog for crabcauses a decreased demand for crabmeat causing the dummy variable tohave a negative sign.
It is assumed that crab meat suppliesare a function of abundance and thereby are assumed to be predetermined. Itis also assumed that yields of crab meatfrom the whole crab have remained un-
Percent of Percenttotal change
export per annum
a 1 percent increase in per capita income will cause the price of king crabmeat to increase 1.560 percent. All measurements were taken at the centroid, orcenter point of the demand curve.
The deflated price of king crab meatrose from $5.40 to $8.06 from 1981 to1984, inclusive. The coefficient of thedummy variable (183) means that thedeflated price rose 183 cents more thanwe would expect. In other words, therewas an additional real price increase of68.8 percent that occurred outside ofhistorical demand.
The positive dummy coefficient leadsus to conclude that there has been nosubstantial replacement of crab analogfor king crab. Had a substantial replacement occurred, we would observe anegative dummy coefficient. It appearsthat the assumption of an increased demand for the kamaboko product due tohigh king crab prices may not be wellfounded. While this analysis adds credence to the supposition that crab analogis not a substitute or "imitation" for kingcrab, the results are not conclusive forother species of crab. Vondruska (1985)suggests that competition from otherproducts, as measured by market shares,affects snow crab prices much morethan king crab or blue crab, Callinectes sapidus, prices.
Discussion
The (0,1) dummy coefficient is certainly not the most efficient method tomeasure substitution effect. Had pricedata been available for crab analog imports, we could have measured directprice cross-flexibility where analogprices would appear as a parameter inour equation similar to snow crabprices. The inherent problem in usingthe dummy parameter is that it is mostlikely capturing more than our twoassumed causal factors, a new marketing strategy, and competition from anew product. After all, there is an indeterminate number of factors whichmay affect market demand in any givenperiod. Also, the estimation of a positive coefficient for the dummy variabledoes not preclude that substitution hasoccurred. We are merely concludingthat the amount of substitution has not
*16.39 d = 1.9782.6 F(4,9)
* *+ O. 189 Y + 183 D(2.11) (2.65)
changed over the period. Prices and income are deflated by the GNP-implicitprice deflator to preclude inflationaryeffects. The equation utilizes 14 yearsof annualized data, 1971-84, inclusive,and is estimated using the ordinary leastsquares technique.
Interpretation
The price flexibility of demand forking crab meat is measured at -0.215,which means a 1 percent increase inquantity demand will decrease price by0.215 percent. The cross-price flexibility of snow crab meat for king crab meatis measured at 0.410, meaning a 1 percent increase in the price of snow crabmeat will cause an increase in the priceof king crab meat of 0.410 percent. Theprice flexibility of income for king crabmeat is measured at 1.560, meaning that
Estimated Equation4
PK = f(-Q,+PSN,+Y,±D)
wherePK = average annual wholesale
price of king crab meat inreal cents per pound at Fulton Fish Market, N.Y., inyear t (1972 = 1.0),
Q quantity demanded in millions of pounds in year t,
PSN = average annual wholesaleprice of snow crab, Chionocetes sp., meat in real centsper pound at Fulton Market,N.Y., in year t (1972 = 1.0),
Y = per capita income in year t,and
D dummy variable, where 197180 = 0 and 1981-84 = 1.
* *PK = -427 - 1.40 Q + 0.738 PSN(-1. 94) (1.55)
Functional Form Equation
"An asterisk indicates significance at the 0.10 level.
been substantial enough to outweigh thesum of other factors that have caused anadditional increase in predicted demandfor crab meat over the period.
Notwithstanding, the results of theequation do question conclusionsreached by those people in the publicand private sectors who believe that consumers en masse are substituting crabanalog for crab meat. We feel that potential entrepreneurs in the United Statesshould recognize that kamaboko may beprepared from fresh fish, and if the fishis available in large quantities continuously, it may be more profitable to fore-
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go the surimi process. There is a realneed for further and continuing economic analyses of these dynamic product markets by government institutionsand the private sector. With adequatepreinvestment planning, there may be abright future for a U.S. -based kamabokoindustry.
Acknowledgments
We wish to thank John Vondruska,Dale Squires, Stanley Wang, John Poffenberger, Paul Neimeier, Robin Tuttle,Michael Jahncke, Penny Travis, and
Robert Kifer for their reviews andcomments.
Literature Cited
Hotta, M. 1982. The Japanese surimi market.INFOFISH Mark. Dig. 1/82:17-20.
Nishiya, K., K. Tamoto, T. Fukumi, S. Aizawa,F. Takeda, 0. Tanaka, and T. Kitabayashi. 1961.Study on the freezing of surimi and its application. Hokkaido Fish. Res. Lab. Rep. 18:122135.
Suzuki, T. 1981. Fish and krill protein processing technology. Appl. Sci. Pub!. Ltd., Lond.,260 p.
Vondruska, 1. 1985. Market trends and outlook forsurimi-based foods. In Proc. Symp. Eng. Seafoods. Seattle, Wash.