Pacific oyster (Crassostrea gigas) value chains

Describing and analysing the Pacific oyster supply chain in Australia

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Describing and analysing the Pacific oyster supply chain in Australia

04 November 2020

Authors: Peggy Schrobback*, Steven Rust^,
Sarah Ugalde^, and John Rolfe*
*Central Queensland University, School of Business and Law
^University of Tasmania, Institute for Marine and Antarctic Studies

The Pacific oyster (Crassostrea gigas) (PO) industry was established in Tasmania and South Australia in the 1950/60s and has significantly increased in its production volume over time. Yet, there is limited information available about the distribution network of POs as well as potential constraints and prospects for the market supply and how the supply chain of POs compares to other oyster products.


Hence, the aims of this report are to a) to describe the PO supply and value chain, b) to identify potential supply chain issues and opportunities, and c) to compare it to other oyster distribution networks (e.g., the Sydney rock oyster (Saccostrea glometata) (SRO)). The comparison of oyster supply chain networks in Australia will help understand the differences in distribution networks and potential reasons for that.


The results suggest that the distribution network of POs is relatively complex with several entities within the chain’s processing/wholesale and retail segments being involved. Several supply chain approaches were identified which farmers use to market their product. These include the direct sale model (e.g., farmer sells product directly to retailers or consumers), the agent model, the processor/wholesale model, the export model and the integrated corporate model.

 


The findings confirmed that farmer’s choice of supply chain model(s) appear to be driven by a range of factors including their business objective (e.g., lifestyle farming vs. corporate business), the farm gate price, relationships with downstream entities within the supply chain, the location of the farm and its distance to the market as well as the production volume and product quality.


Several issue and opportunities that affect the distribution of POs were identified. Issues include for example production risks (e.g., POMS), limited value creation in supply chains with a high number of intermediaries, limited product traceability and the low volume of oyster export. Opportunities were identified as improved product marketing/branding, consumer education and the exploration of export markets among other.


The comparison with a previous study which explored other supply chains of oysters produced in Australia (Schrobback & Rolfe, 2020) found that the distribution network of PO resembles the supply network of the SRO with minor distinctions (e.g., role of hatcheries in spat supply, absence of premium oyster wholesale model in the PO network), although is distinct from the supply network for Black-lip oysters (Saccostrea echinate/Striostrea (Parastriostrea) mytiloides) and Flat oysters (Ostrea angasi). This is mainly due to the commercial scale on which the PO and SRO industries operate, and the volume of oyster produced in comparison to the evolving Black-lip oyster and Flat oyster industries where production volumes are relatively small. The issues and opportunities that were observed to affect the PO supply chain are largely similar with findings for other oyster supply chains in Australia.


Given the findings of the study, the oyster industry may consider addressing the identified issues and opportunities in the light of individual business and industry objectives (e.g., maximisation of profits, consumer satisfaction), particularly strategies for supply chain management that contribute to achieving these goals. This could contribute to increasing the economic growth of aquaculture businesses operating in rural coastal regions of Australia to support economic growth and job creation in the regions.

Full report for download here