Given the daily stress, aggravation and frustration of the lobster business, one wonders what makes a dealer continue year after year. “It gets in your blood,” says Greg Hansen of Cozy Harbor Seafood in Portland. “It’s fast-paced; and for some of us, it’s a huge challenge to put this monstrous puzzle together day after day.”
Now Hansen is preparing to run Cozy Harbor’s new live lobster division.
Some 200 companies in New England and the Canadian Maritimes try to carve a year-round living from seafood. These companies do not include the fishermen who sell their day’s catch on the dock or those with pickups, hound dogs and sets of scales by the roadside.
Each company has a primary dealer, as fishermen call them, or wholesaler, as supermarket or restaurant buyers call them, in charge of sales. John Norton of Cozy Harbor (WWF Feb. 07), chose Hansen to head up his live lobster sales. Hansen spent the previous 17 years at Little Bay, in New Hampshire, and was a known commodity.
Twenty-four years ago, Norton had a sense that the seafood industry was going to follow in the steps of the poultry industry. He found Hansen by advertising in the Boston Globe for someone who had been in the poultry business with an awareness of that industry’s consolidation.
Hansen didn’t start in the poultry business — he planned to teach high school in order to coach football and basketball — but after a series of events, he ended up selling insurance in Boston. A lot of Maine boys — Hansen was born and raised in Bangor — don’t take to cities the size of Boston or New York, so when a sales opportunity arose in Belfast, he grabbed it. He remained in the poultry business until its collapse, then spent a couple of years in Lowell, Massachusetts, with a full-line provisioner before answering Norton’s ad in 1983 and moving back home.
Hansen’s philosophy of sales and marketing, which he credits to his training in the insurance business, begins, he thinks, with buyer confidence. “If you can develop a relationship with a customer or buyer, and that relationship evolves to where the customer buys from you with confidence,” he said, “that is a successful business relationship. You achieve that confidence through first striving to understand what it is the customer wants, then consistently — and that’s key — deliver. Do it right day in and day out. Provide the buyer with legitimate market information, guidance and conscientious service.”
Hansen starts by working the phones. A lobster dealer must come up with a price per pound for this highly perishable live product shipped daily anywhere on the planet. The price per pound is based on size, quality, supply and demand. It can change daily and, depending on the seller, be different in the same town. In Maine, prices are based on the going rate, called the boat price, paid to the fishermen at the dock.
In order to come up with a price he can ship for, on any given day Hansen calls approximately two dozen people in the industry, which he calls “making a sweep.” Having built a list of reliable contacts with whom he’s established relationships over the years, he knows whom to call and where. He’s spent his entire business career building those contacts and relationships.
Lobster exporter Mark Barlow, of Island Seafood, knows Hansen as a colleague, neighbor and friend. He called Hansen a man of integrity and said, “This business has bred a lot of dishonest individuals. You know, if there’s a problem, they tend to exaggerate it. When you’ve committed to a sale at six bucks [per pound] and because of the weather, you know you can get seven, the honorable one will honor his commitment. The dishonorable one will say, `The truck didn’t show up, and I don’t have them.’ There are opportunities sometimes when you can make more money, but it’s not the right thing to do.” And without missing a beat, he said of Hansen, “I think the world of the guy.”
People tell Hansen he reminds them of Ronald Reagan: The Great Communicator, which he attributes to having been the seventh in a family of eight boys and having six children of his own. He’s a communicator and he relies on the relationships he’s built to gain the information he needs.
Another longstanding business relationship is with Stewart Lamont, Managing Director of Ferguson’s Lobster, in Tangier, Nova Scotia. In 1987, Lamont and his cousin Graeme were at the Boston Seafood Show, Graeme was chatting with Hansen in one of the aisles, and, Lamont recalled, “It seemed as if every second or third person who came along knew Greg, was happy to know him, shook hands, and so forth. In a half hour, my cousin tracked me down and said, `This is a guy you’ve got to meet,’ and I’ve done business with him ever since. Greg’s stock in trade is his reputation, and he’s known in the industry as a straight shooter. He’s honorable, he’s a gentleman, he’s knowledgeable. We’ve not had a disagreement or an argument in 20 years.”
Contacts like Lamont provide current prices and other pertinent information on what the primary shippers in their areas are willing to sell for. In Maine, primary shippers include lobster co-ops like the Corea Co-op, in Corea; and businesses like Atwood Lobster, in Spruce Head; Look Lobster, in Jonesport; and Seaview Lobster, in Kittery.
“There are push-points in the lobster business,” Hansen said. Push-points are major cities, such as Boston, New York, Los Angeles, London, and Paris. They also include such fishing centers as Gloucester, Massachusetts; and the South Shore of Nova Scotia. Within those push-points, dealers get information on prices for shipping according to varying packaging forms. He needs to know the plastic crate price; the wax carton price; the insulated air box price.
Every day Hansen makes a sweep of his contacts, checking with the landing areas to get a sense of what the catch (or production) is, what the primary shippers are selling for, and his customers to see what the market will bear for resale. He then phones what he calls the marketplace: seafood wholesalers in key cities. He calls distributors that service primarily hotels and restaurants. He calls accounts he has with chain restaurants and ones with retail supermarkets. In the Northeast, during the tourist season, he calls his customers with tourist businesses. Calls to each segment of the market vary from four or five to twenty a day.
“On the other side,” he said, as if this weren’t enough, “you’ve got to keep a tab on production levels, keep your eye on weather: what’s the weather doing? And you’ve got to keep in mind what’s going on with holidays. That’ll spike things. Is there a holiday in Canada? Is there a Northeast chain that’s going to run a promotion? That’s going to have an influence that will come into play.” Some days he makes 45 calls: some for the sweep, some for sales. Other days, “it’s just pulling together and getting a sense of where things are. You’re finding out where the supply is, where the demand is, and what trends do you see.”
He needs to get a sense of the industry’s overall inventory, which includes what’s being held in natural pounds, in inland long-term holding systems, and by processors.
Interwoven through a day may be the frustration of lobsters arriving that have been mishandled, and there’s breakage. During a holiday season a couple of packers may not show up for work, putting the burden on those who do, or a truck may break down in Connecticut with a load set to be shipped from JFK at a certain time.
“It’s all those things,” Hansen said: “Making the sweep calls, putting up with the aggravation, dealing with the people out there that push the truth: people cut corners or they get sneaky. You’ve got to keep tabs on the rank and file and hope that you’ve set up systems and an environment so that your employees are going to follow the rules. There’s stress in having to deal with that every day.”
On top of all this, “Dealers and wholesalers can have hundreds of thousands of dollars out in receivables. It’s money the customer owes the dealer and it’s at risk because in some cases, the customer has between 30- and 45-day payment terms. Normal payment varies from C.O.D. to 21 days, though Hansen said, “The growing trend is more toward fourteen days rather than longer. Bad debt has always been a problem, but it has become more acute in the last two to three years.
“Most dealers out there today recognize that volume, efficiency and discipline are critical to staying in business,” Hansen said, noting that freight forwarders add to efficiency by lining up airlines, booking space, and coordinating paperwork for export. They have made an enormous difference to dealers by taking responsibility and reducing errors.
As to the future of the lobster industry as a whole, Hansen said, “We saw a consolidation of the beef industry years ago; we saw a consolidation in the poultry industry…there’s been in scallops a consolidation. We’ve seen in aquaculture — salmon — a huge consolidation. You think there’s bound to be some dimension of consolidation in our business. Except the big whammy: from Newfoundland to New York, you are talking about nine to ten thousand lobstermen. That’s something you’re just not going to consolidate. What’s going to happen? That’s the really big puzzle.”