I develop a multi-stage model of a vertically differentiated seafood market, where product quality is determined by site location. Consumers are heterogeneous in their preferences for quality but cannot observe true quality in marketed products. Instead, their demand for quality is based on pre-determined, exogenous, beliefs about site location and on signals that firms can use to reveal site quality to their customers. The solution to this stylized model offers predictions on (1) the distribution of market share between branded and unbranded products; (2) how the nature of consumer preferences helps to determine the location of production; and (3) how a change in access to quality production sites is likely to impact the distribution of products supplied in the market and their market shares.
I use the global salmon market as an informative case study to explore the implications of the model. I compile a database of Chilean salmon producers that have developed consumer-facing brands, and illustrate how many firms have developed outlets for selling both branded and unbranded products. In most cases, these brands communicate a wide collection of attributes related to the sustainability of their products. Furthermore, all Chilean products compete with other salmon producing countries, further dividing market share across a vertically integrated market. I then use the theoretical framework to offer insight into the possible market impacts of eliminating salmon farming from high-quality, sensitive concessions.