Avanti Feeds

Nice article.Chandrababu naidu is a doer and is focused on aqua industry

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December 24, 2015, India,
Prices Increase on Shortages :Thus far in December 2015, shortages of Penaeus vannamei have caused prices to rise. Exporters in the state of Andhra Pradesh, the heart of India’s shrimp farming industry, are looking further afield, to the state of Tamil Nadu, to buy shrimp—an unusual situation, according to Durai Balasubramanian, secretary of the Pattukottai Shrimp Farmers Association, who said prices have increased by $0.45 a kilo across all count sizes. He said, the scarcity of raw materials “definitely won’t improve at least until February 2016”. Right now, he said, there are only limited supplies of 41/50-count shrimp and smaller sizes available. “Packers are willing to pay farmers…more than market price, but…demand is simply [overwhelming supply]. Several packers are…struggling to fulfill contracts to China and Vietnam. For example, we have witnessed attempts by packers to ship less quantity than the contract (‘loose loading’) to minimize their losses.”

In the event that there is no significant improvement in supplies by February 2016—which is a distinct possibility—attention will turn to the next harvest in May 2016.

Shrimp harvests in the states of Odisha and West Bengal have been sold out, leaving Andhra Pradesh the only state with raw material, and it is running out of product.

Bizquest takeaways mentioned feed capacity of 14lt while demand is of 7lt only…shouldn’t the margins be trending down in an oversupplied industry ?.. or is there any tacit understanding to maintain the prices…
Also, if anybody has details of the various players having spare capacity…please share…it would be helpful in understanding the industry structure… Another doubt which i had was what is preventing other global players from entering the indian market especially since India’s shrimps exports have risen so rapidly…or is the opportunity size relative to their existing market is still very small?

Besides may be having a good brand, I couldn’t understand whether the company has any competitive advantages over the competition…

http://www.intrafish.com/incoming/article1404952.ece/binary/Shrimp%20Panel_GSMC2015.pdf

Nice presentation for global shrimp industry with india specific data and trends…though a bit dated

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Rahul I have answered your question to best of my ability @ayushmit and @Donald could add more to it

Regarding demand vs supply what you are missing is quality of seeds. Almost half of the capacity created has been by unlisted players where FCR (feed conversion ratio) would be very high. You can see that inspite of such high capacities companies like Avanti and waterbase have been increasing their production facilities as there is still demand for quality feeds.

Reasons for global players not entering is that feed may look like pure commodity but it involves high level of involvement with farmers(thus resulting in high stickiness) otherwise fcr ratio would be very high making it unviable for farmers to continue shrimp farming. See what has happened to market share of players like CP foods in last few years whereas Avanti has risen because of close connect of company with the farmers along with much more understanding of local conditions. This could be the same risen why players like TUF and Luxe Enterprises preferred to work as technical collaborators rather than competitors with Avanti and waterbase respectively

Competitive advantage according to my understanding would be product,distribution along with staying in continuous contact with farmers throughout the 4 phases of shrimp production which results in increased stickiness.

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Thanks @Rokrdude …very helpful in understanding the dynamics.

So my understanding of the company’s performance so far has been its concentrated focus in the seed market owing to increase in shrimp exports from India at 22% volume cagr over the past five years.

The growth in exports was on account of both, the introduction of the new shrimp variety and onset of diseases in Thailand and other south east countries.

However the key question is now what will be the shrimp exports growth going forward… especially since the global shrimp growth is 2-4% and now other regions previously affected with diseases have stabilized…

Also, whether the feeds can be exported to Vietnam, Thailand which can become a source of revenue for Avanti ?

A good article though slightly dated.Aquaculture opp size keeps on increasing.Even if prices fall volumes would increase as Americans simply love the healthy n tasty shrimps.China also consuming it in a big way.Opp size remains large.

But will India be able to keep on increasing its mkt share or competitor countries gain at Indias cost is the key risk along with usual ones of close monitoring of disease n weather n prices.

U.S. Shrimp Imports

  • Good rebound in Nov 2015
  • Imports from India up 27% in Nov 2015
  • Imports from India up 24% in Jan-Nov 2015 over the same period in 2014

Source: http://www.ers.usda.gov/datafiles/Aquaculture/Trade/AquacultureTradeRecent.xls

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Even I was about to post the same anomaly that the effect of Nellore floods are still not coming in the numbers. May be the processors are using the raw materials inventory from previous months and the following months should show the real impact.

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Lobbies at work against shrimp imports in US.

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Link for ET interview with Sumeet Nagar, MD of Malabar Investments:

Excerpt of his views on Avanti Feeds:

ET Now: Good companies which can become great companies that is the idea, is not it?

Sumeet Nagar: They are small and so people do not realise that they are good or great companies.

ET Now: Your last purchase what I have heard is Avanti Feeds. Why do you like that one?

Sumeet Nagar: Avanti because it is off the beaten part. There are no analysts or sectors sort of following aquaculture or aquaculture feed companies. There are some concerns around what happens with diseases and cyclicality of this business. While some of them may be well-founded, others are just fears. This company has done phenomenally well fundamentally.

ET Now: What is so great about this business?

Sumeet Nagar: It is the largest manufacturer of aquaculture or shrimp feed in the country. It has gained market share every single year, over the last five years and that in an environment where most competitors ailed to sell products. These guys are getting stocked out every single year. You know that the company has a great product; it has a good distribution network. The company has ROE in upwards of 50 per cent. It has been growing at a phenomenal rate. That rate of growth could comes down, maybe there is some cyclicality around that like bad weather or bad monsoon, but do we have the confidence that three years from now and it will be bigger company.

ET Now: From a market capitalisation (map) of close to Rs 400-450 crore, Avanti’s has seen its mcap eroding to about Rs 300 crore. The stock has seen a massive correction to Rs 425 level from Rs 690 largely because of tactical reasons.

Sumeet Nagar: When things are moving up, there is a sort of momentum that comes into them. For a while, things get overshoot, but they come back in place. That is what has happened with Avanti. It went from Rs 10-20 levels to around Rs 600 plus levels. Some of that may just be sort of rationalizing, where it ought to be. Then there are some negatives that happened. So you had floods in the south India, you had some small diseases there. So you may have one quarter or one year that is bad. Some of the correction may be a reflection of that.

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Round up of the Indian Shrimp industry 2015

Production was down from 3.8 Lakh Ton to 3.5 lakh ton (1st downturn after many years of continuous increase) manly on account of lower prices for most the year, EHP disease and Nellore floods. 2016 will depend on disease and unforeseeable events, but if farmers see promise in the rising prices, they should stock ponds and move towards a 400,000t production total.

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GOAL Shrimp Production Survey: Report forecasts global production rebound through 2017

The Global Aquaculture Alliance’s GOAL 2015 survey of production trends in shrimp farming polled 38 respondents from Asia/Oceania, 31 from Latin America and two from Africa. Figure 1 summarizes the production estimates for global production during 2007-2017, which combine data from the United Nations Food and Agriculture Organization (FAO) and both 2014 and 2015 GOAL (Global Outlook for Aquaculture Leadership) surveys.

Asia production

Production increased substantially in 2014 to 3.7 MMT (up 24 percent) mostly due to the large harvests reported in Indonesia, Vietnam and India. The most remarkable growth through 2017 is expected in Indonesia, with production reaching 850,000 MT (24 percent annual growth rate between 2013 and 2017). India is also expected to see significant growth through 2017, from 290,000 MT in 2013 to 430,000 MT. Although Vietnam reported a large harvest in 2014 (669,000 MT), production was expected to decline in 2015 as a result of diseases and adjustments to lower shrimp prices, with only a partial recovery following through 2017.

Respondents in Asia have reported a move towards production of smaller shrimp sizes (51-60 and smaller) since 2010. The share of small counts increased from 27 percent to 49 percent between 2010 and 2014. The shift to smaller shrimp seems to have been driven by narrowing price margins between the small sizes and the larger counts. Early harvests caused by EMS and other factors also help explain this trend.

Perceptions on diseases have changed remarkably over the last eight years. In the 2007 survey, “Diseases” did not make it among the top three challenges for either Asian or Latin American producers, who used to be more concerned about feed costs, market prices and trade barriers. Disease issues have moved to the forefront since the onset of EMS.

Most Asian and Latin American respondents expect global economic conditions to either improve or remain stable in 2016; most respondents also expect the global shrimp market to strengthen in 2016. Upward pressure on feed prices is nevertheless expected to continue in 2016.

Suggest to visit the source URL for detailed info, including other region surveys from Latin America.

21 minute presentation of GOAL 2015 Survey report.

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From a different conference - GSMC 2016 with a counter view.


GSMC Shrimp panel: Disease likely to mean global production flat in 2016

The sentiment at the GOAL conference in Vancouver, Canada last year was for growth in shrimp production in 2016, but the panel at the Global Seafood Market Conference in Miami, Florida is not so bullish.

Overall, the panel expects production in 2016 to be around 3.5 million metric tons, pretty much the same level as 2015.

So, why does the shrimp panel disagree with the forecast of 7.7% annual growth given at the GOAL event?

Well, the panel, which includes executives from Charoen Pokphand Foods, Rich Products, Aquastar and Omarsa, is forecasting slightly decreasing supply from two of the three major producers, Indonesia and India.

“Between September 2015 and January 2016, the evidence of production difficulties due to disease, weather and in some cases delayed reaction to low prices, has become more pronounced.” Current disease worries are white spot in India; enterocytozoon hepatopenaei (EHP) in China; and EMS in Central America.

During GOAL, Robins McIntosh of CP Foods flagged up EHP as a major worry for production going forward.

Undercurrent News sources have also reported of impact from EHP in India. In India, the forecast is for production to drop to around 380,000t, from just over 400,000t in 2015. In 2015, production dropped from around 430,000t the previous year.

The panel is predicting a slight drop in Indonesian production, to around 220,000t in 2016.

The recovery of shrimp volume in 2014 and 2015 was largely a result of new production areas, such as India and Indonesia, and more control of early mortality syndrome (EMS) in countries like Thailand.

In fact, Thai recovery from EMS is such that production is forecast to hit 300,000t in 2016, up from around 260,000t in 2015 and 200,000t in 2014.

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This post only pertains to all the news related to Vietnam.


Weak Demand, High Prices Hurting Vietnam Shrimp Exports - Nov 24 2015


Is Vietnam’s shrimp industry in crisis? - Dec 30 2015

Shrimp farmers in the Mekong Delta, the main center of production, have experienced heavy losses due to disease and a drop in selling price.
In just one district in Tra Vinh province, 2,450 producers – 41 percent of the local farmers – are in trouble, a further 11 percent breaking even, and the rest registering an insignificant profit.

However, issues in the farming sector continue to challenge the viability of the industry.
Vasep blames some of the problems on the fact that the white leg shrimp (Litopenaeus vannamei) industry in Indonesia and India are doing well, which puts more pressure on Vietnam, where higher production and logistics costs mean the country’s shrimp is priced USD 1-3 higher than that of other nations.

Logistics is a major issue for Vietnam, with poor road infrastructure, excessive traffic and disjointed transport routes costing the country’s businesses an additional USD 10-15 billion per year…

Around 80 percent of cargo is currently sent by road, but water transport routes and railways are being restructured, and businesses hope that once fully operational, these will help to reduce the burden of the transport cost.


Shrimp farming in Viet Nam: the search for sustainability - Jan 05 2016 - On use of rampant antibiotics

Profitable shrimp farming produced a rapid transformation in the quality of life for people in the Cuu Long (Mekong) Delta region, but the unplanned expansion in production has also had negative effects on the environment and domestic shrimp trade.

Due to attractive profits, farmers in other areas of unfavourable natural conditions also did whatever it took to raise shrimp, including in Ben Tre, but the Ba Lai project area is filled with freshwater. Local people spontaneously drilled wells to bring in salt water and made ponds to raise shrimp.
The rapid growth of shrimp farming and poor infrastructure has led to disease outbreaks, shrimp kills and huge losses for farmers in many places.

Thu said he stopped farming for almost three years.
“The more I raised, the more money I lost,” he said. Shrimp died of unknown causes."
Ngo Van Hung, Thu’s brother, still tried his luck by raising shrimp two seasons last year, but lost over VND60 million ($2,700).
Similarly, the delta province of Tra Vinh, where the irrigation system is inefficient, experienced issues with diseased shrimp.
Huynh Phuoc Hai, a farmer in Kien Giang Province, said, “It’s clear that the farming environment is being seriously polluted. Along one canal, many households scrambled for water, and when shrimps got diseases, they discharged the contaminated waste, making way for pathogens to disperse.”
Vo Hong Ngoan, a long-term shrimp farmer in Bac Lieu Province, said because the environment was too polluted that so many farm owners utilise antibiotics for preventing diseases.

Ngoan said there are various types of antibiotics displayed for sale, but farmers are mostly unaware of their toxicological effects. On the other hand, processing factories keep buying shrimp without proper inspection, so farmers become negligent in utilising antibiotics.

2015 Record Year for FDA Refusals of Shrimp Contaminated with Banned Antibiotics
With the two refusals in December, refusals of shrimp entry lines from Vietnam for reasons related to banned antibiotics came close to the record high posted in 2014 even with a sharp decline in the amount of shrimp exported from Vietnam to the United States in 2015. For all of 2015, 40 entry lines of shrimp from Vietnam were refused for reasons related to banned antibiotics compared to 48 in 2014.

Note: It was 34 for India v/s 19 (in 2014)


Ca Mau lacks disease-free shrimp - Jan 07 2016

The southernmost province of Ca Mau, the country’s largest shrimp breeding area, faces a shortage of disease-free shrimp fries as it awaits completion of new zones for shrimp-fry breeding farms located near quality water sources.
The province has 875 shrimp-fry nurseries that produce about 9-10 billion fries a year, meeting only 50 per cent of the demand of the province’s shrimp farmers, according to the Ca Mau Province Department of Agriculture and Rural Development.

More than 12,000ha of shrimp in Ca Mau were infected with disease last year, including white-spotted disease, with a damage rate of 30 -70 per cent, according to the department. The poor quality of shrimp fries was the main cause of the disease, experts said.
Phan Thong Minh, an experienced shrimp-fry producer in Ngoc Hien District, said the quality of shrimp fries accounted for 70 per cent of the success of shrimp breeding.

New zones
To ensure quality shrimp fries, Ca Mau is implementing a plan to zone shrimp-fry nurseries along large rivers which have good water resources and infrastructure.
The province has built the first phase of a large shrimp fry farm project on 55ha in Ngoc Hien District. It can produce about 7 billion shrimp fries a year.
The farm, invested in by the Viet Nam-Australia Co.Ltd, is now in its second phase, with an additional 66ha, which could produce 8 billion shrimp fries a year.

Ca Mau is also planning a programme to develop disease-free shrimp fry in the 2016-2020 period, targeting about 20 billion disease-free shrimp fries a year and meeting 80 per cent of the demand of the province’s shrimp farmers by 2020.
The province has nearly 300,000ha devoted to aquatic cultivation, mostly for shrimp.


[Vietnam shrimp exports in 2015: Challenges and Opportunities - Jan 14 2016] (http://seafood.vasep.com.vn/seafood/59_10979/vietnam-shrimp-exports-2015-challenges-and-opportunities.htm) - On Currency competitiveness

The increase in Vietnam shrimp exports in 2014 was reversed in 2015. Vietnam shrimp sales in 2015 reported a year-on-year reduce of 25-30%. It was attributable to many factors, including weak demand from major markets, slump in global shrimp price, rise in India’s shrimp production and the sharp depreciation against USD of Indian rupee, Thailand’s baht, Chinese yuan and Indonesian rupiah.
In 2015, Vietnam shrimp was exported to 92 markets. Top 10 markets included the U.S., Japan, EU, China, South Korea, Canada, Australia, Taiwan, ASEAN and Switzerland. These markets made up nearly 95% of total shrimp export value.

The ups and downs of market currencies the first factor affecting to Vietnam shrimp exports in 2015. In 2015, many countries devaluated their currencies. The volatility of currencies placed commodity prices under pressure. In the past three years, China has devalued the yuan after the major currencies fell sharply against the US dollar. From Jan 2013 to Aug 2015, EUR depreciated 20%, yen devalued 39%, won downed 11% against USD. In Aug 2015, VND downed 5% against USD. The deepest depreciation against USD was seen in domestic currencies of developing countries such as Brazilian real (-72%), Colombian peso (-52%), Indonesian rupiah (-42%), Malaysian ringgit (-33%), Indian rupee (-20%) and Thai baht (-18%). The depreciation in currencies increased seafood price competition in the global market.

VND is now back to 2% levels from Aug 15 whereas INR is more than 11% depreciated since then.


2015 vannamei roundup: Vietnam’s crisis just beginning? - Jan 20 2016

Vietnam’s Association of Seafood Exporters and Producers (Vasep) labeled 2015 in the shrimp sector a crisis year, after export turnover fell by $1 billion to $3bn.

Low prices, low demand, and higher production costs have combined to push many farmers in the Southeast Asian nation into a loss-making position.

In just one farming region of Vietnam – Cau Ngang district – 41% of over 6,000 shrimp farmers are suffering losses this year, nearly 11% are breaking even and the rest are making an insignificant profit, according to statistics at the very end of 2015.

“Companies have told me that production costs are some 70% of the sales price at the moment. And sales price can’t go up because it’s already $1-$2 higher than Indonesia and India — so we’re being out-competed on that,” said Nguyen Bich of Vasep.

Antibiotic traces in containers has led to rejections in the EU, US and Japan speakers at the event said.
Although the use of certain antibiotics are banned, the issue has been with educating individual farmers of this, said one speaker, with Vietnam’s Ministry of Agriculture and Rural Development (MARD). During the early mortality syndrome period, farmers believed blanketing their ponds with the chemicals would act preventatively – MARD is still struggling with breaking this habit.

Looking back at the year, Vietnamese press in January 2016 noted 2015 marked the first time Vietnamese export revenues from shrimp and catfish had dropped.
Another tough year is being predicted, with a loss of market share in key areas and price cuts by competitors piling pressure on, according to Vasep.


Shrimp export to US expected to thrive - Jan 25 2016 - On TPP benefits

Vietnam’s shrimp exports to the US in 2016 will rise thanks to positive results from the ninth administrative review (POR9) for anti-dumping duties on Vietnamese frozen shrimp and the signing of the Trans-Pacific Partnership (TPP), according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

The average anti-dumping tariff rate levied on most Vietnamese frozen shrimp sold in the US market plummeted from 6.37 percent in the POR8 to 0.91 percent, as regulated in POR9. This has eased the tax burden on Vietnamese shrimp exporters.

Import duty of almost raw shrimp is reduced to 0% as soon as these agreements take effect. For value added shrimp products, that roadmap of duty reduction will depend on each market.


Have posted as much as possible only relevant snippets so as to not lengthen the post.
Please visit the source links for more detailed info.

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On Thailand slave labor issue and other snippets from GSMC conference.


2015 vannamei roundup: Thai EMS recovery doesn’t mean smooth sailing

However, in recognition of the issue peeling sheds pose, Global Aquaculture Alliance decided that as of Jan 1, 2016, any firms outsourcing the work to such plants would be unable to hold a Best Aquaculture Practices certificate.

The Thai Frozen Foods Association then duly moved to eradicate third party pre-processing operations from the shrimp supply chain of its members, effective from the end of December 2015.

Thai Union ‘no longer hiring temporary workers’ - The Nation

Prawit: EU pleased with Thai IUU efforts

Are US buyers boycotting Thailand shrimp?


In terms of shrimp disease there is “a lot more downside potential than upside potential”, the panelist said, with shrimp farms everywhere at risk of disease.
When asked if there were any countries in Asia without EHP, the panelist said EHP is everywhere.
“There is no country that is free of EHP, except maybe Bangladesh,” he said.

EHP is not deadly for the shrimp, but the microsporidian stunts growth.
“In China, they’ve had EHP for a year and a half. [The shrimp] can grow for 100 days and still [be] six grams, you can’t do anything with that,” the panelist said.


Thai shrimp farmers are feeling “pretty good” on 2016, said an executive with one major supplier based in the country.
Farmers feel they are dealing with enterocytozoon hepatopenaei and early mortality syndrome and are confident of upping production considerably in 2016, he said.

“We are seeing the highest PL [post-larvae] sales in five years,” said the panelist.
“The first quarter will be ok, but not spectacular,” he said.
In Q2, the impact of these new PLs should transpire.
The sentiment in Thailand is 290,000t-300,000t is very achievable, he said.


Indonesia and Vietnam are both countries where it is hard to get accurate information on shrimp production, said the first quoted panelist with the big US buyer.

He said executives from a large Indonesian supplier had given an estimate of around 275,000t for the country’s production, but the government “estimates two or three times this”.

At the moment, Indonesian production seems to be short, said the panelist.
The country’s peak season is from December to February. So, if production does not pick up, “they [Indonesian suppliers] could be in a hole for this year”, he said.

As for Vietnam, it is a “black hole on data”, said he US importer.

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On US Consumption


Shrimp consumption also increased to 4.1lb, up from 4lb.

Overall US protein consumption will increase in 2015 and 2016, but this will be driven largely by chicken and pork, with beef consumption also edging up, According to statistics published by US Department of Agriculture.

Rogness highlighted that seafood spending is “highest when consumers start to think about health”, specifically people between the ages of 45 and 54, which spent $158 million on fish.

Rogness also pointed out that the 75 years and older group “is not a demographic to be ignored”. There are almost 20m people over the age of 75 in the US, and increase of 1.8m people in the last four years, and that number is set to continue growing.

Getting US consumers to eat as much seafood as they do chicken is a tough task, according to a presentation from Ron Rogness, vice president of vice president of corporate relations with American Seafoods Group.

If US seafood per capita consumption was 59 pounds, at current prices, the average household would have to spend $3,259 per year on seafood.
“That is $747 more than the average US household spent on gas in 2014,” said Rogness.


Red Lobster enlarges shrimp offerings

Guest feedback has prompted Red Lobster to increase the size of its shrimp offerings.
The foodservice chain announced on 23 November that it would be offering what it calls “Bigger, Better Shrimp” with its Shrimp Scampi and Shrimp Skewer dishes.
These changes will affect almost 70 percent of the Red Lobster menu, which hosts a great deal of lunch and dinner entrees that feature or include shrimp.
“As the world’s largest seafood restaurant, we serve a lot of shrimp – over 80 million servings per year – and our guests love it. But we started to hear from them that our shrimp had become somewhat ordinary,” said Salli Setta, President of Red Lobster.
The shrimp in question, particularly that used in the Shrimp Scampi and for the Shrimp Skewers, will be 47 to 86 percent larger than it has been previously. The Ultimate Feast and Seaside Shrimp Trio will also feature the “Bigger, Better Shrimp.”

Rubio’s Restaurants, which operates 194 Mexican restaurants, will signficinatly increase its seafood purchasing as it expands to the East Coast.

As Rubio’s aggressively adds new stores, “it is safe to assume though that all categories will increase on a pro-rata basis with shrimp continuing to grow a slightly higher rate than the other categories,” Rubio told SeafoodSource. In 2014-2015, Rubio’s purchased nearly USD 13 million (EUR 12.3 million) worth of seafood.
Over the last two years, the popularity of shrimp dishes – including burritos, tacos, salads and bowls – has far outpaced any other protein, according to Rubio. “Shrimp is super popular. It’s a natural alternative [to chicken] for a quick, affordable lunch where you want something tasty at a good price point.”
Rubio’s purchases more than one million pounds of 41/50s Pacific white farmed shrimp – primarily from India and Indonesia. Vernon, Calif.-based distributor Red Chamber Co. supplies the shrimp.

US millennials dine on adventurous seafood

While shrimp has traditionally been the most popular seafood on U.S. restaurant menus, shrimp dishes actually declined in the third quarter as Millennials sought out more adventurous dishes.
Shrimp apps and entrees dropped 4.7 percent – a decrease of 850 menu mentions – at restaurants tracked by foodservice research and consulting firm Technomic for the quarter ending 30 September.
“Shrimp is still a popular choice on menus and we will continue to see it on menus in the near future, but we are seeing a rise in more adventurous eaters among Millennials and Gen Z who are more likely to seek out food they haven’t tried before,” said Rachel Royster, senior coordinator of editorial content at Technomic. “Because shrimp is so prevalent on menus, the more adventurous eater might order calamari or crawfish instead of shrimp (which tends to be a mainstay item.”
In fact, there were 8.5 percent more octopus apps and entrees in restaurants in the third quarter, along with an increase in “other” shellfish dishes, which combinations of shellfish such as crab and scallops.

PS: Have updated all findings. No more forseeable updates. :slightly_smiling:

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Hi Guyz,

I just want to compare both the companies here in the same industry. Having a dilemma - where to invest?
Avanti is a regular compounder, expanding consistently, good mgmt and good business strategies. On the other hand the Waterbase has almost tripled its capacity this year by acquiring Pinnae feeds (its sister concern). It is also intending to enter into hatcheries like avanti.

If we look at the industry overall - risks are very high - which tells us to go for some already established players like avanti. But if we look at growth - waterbase is the right choice because of the lower base. Mgmt is good in waterbase, but had some problems earlier due to which they couldnt explore the industry in their favour. Focus of the mgmt has shifted to this industry and want to aggressively penetrate in the market.

One more point the loss to avanti is very less compared to waterbase - Waterbase has its facility in nellore which was washed due to Floods. Avanti has its facility in Gujarat. Second Waterbase has its customers concentrated in Nellore only. Avanti has its customers in West Bengal and odisha also. But, surprisingly both the stocks have gone 50% down. Avanti is trading at PE less than that of Waterbase.

Waterbase can increase its EPS 5 -7 times in next 4 years whereas Avanti can only double its EPS in the same time frame. But on the other hand - can the mgmt of waterbase make up with the tripled capacity? What if it fails with its so called aggressive plans?

I request all the VP members to provide their views here and help to fix this dilemma. Thanks lot.

Disc; Invested in none.

Avanti results out…
sales 411.3 cr vs 385 cr, up 7%
profit 36.5 cr vs 33.8 cr up 8% yoy
9M EPS 27.9.

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Hi vaibhv wats ur views on results at first sight