Not so for the rest of the country. What kind of fish do most consumers want? They want fresh, flakey, mild, white-fish that can be breaded. Munk, haddock, hake, sole, cod-it’s all the same to the person who has never experienced a whole fish, let alone cleaned one. People want mystery fish and they want it cheap. Ditto for salmon, shrimp, lobster, c(k)rab, the list goes on.

The seafood commodity chain and our taste for seafood have a complicated relationship. Both now demand substitutable mystery fish – any flaky mild white fish that can be breaded can be substituted for any other. The consequences for fishermen and the ocean have been significant.

The Price:

In our fishing communities, fishermen end up as price takers. They unload their boat to a buyer/processor who may not tell them what they are going to get paid (no deal closure). The perishable nature of the product forces the fisherman to unload everything they catch in one tranche.

The processors that fishermen sell to are likely the marketers, sales force and logistics people all vertically integrated into one company. Processors have amassed tremendous power in this model, playing off of fishermen’s need to sell everything they land at the dock.

Processors are also playing up the compressed timeline that consumers create demanding fresh product. A fundamental assumption that informs our taste for fish is that fresh fish is higher quality than frozen. You only freeze fish right before it goes bad, right? Fish has to move quickly and be substitutable to satisfy the average seafood consumer.

Sales representatives working for processors have timelines that are not much longer than a day. The day starts with sales staff all over the country selling what people want to buy without knowing what will be landed. Later, their sales managers must negotiate who gets what was actually landed, either what the end user actually bought, or a renegotiated contract for a substitute fish.

In addition to putting fishermen in an untenable economic position, another consequence of our preference for fresh, substitutable fish, is that destructive fishing practices are hidden from consumers. The ocean pays the price as wild-caught fish stocks continue to plummet. In fact, wild caught fisheries now supply just less than half of the fish consumed in the world. By 2050 the United Nations predicts that wild fisheries will experience a nearly complete resource collapse if nothing changes about how the business of fishing is implemented on a global scale. 

In the most general of senses, we have enabled a fish commodity chain that looks like this: suppliers (fishermen) sell to processors who contract with distributors and then sell to retailers/consumers.

An Alternative:

A small but growing number of fishermen are pushing for change. It takes shape as a commodity chain that is shorter: fishermen-owned brands sell to consumers.

In one version of this model, fishermen become equity partners in an LLC that represents their brand in the marketplace. Perhaps fishermen stake their catch over a period of time for their equity position. The marketing and branding entity tells the story of the fisherman, it seeks third party certification for fish, and it works with fishermen to help them constantly improve the quality of the fish they are landing.

Fish are processed and frozen near where they are landed. According to top seafood chefs, fish that are frozen as close to capture as possible can equal the quality of “fresh” fish that has been trucked and flown great distances so that consumers can buy it within a few days of the fish being landed. If you process and freeze fish close to where they are caught you can dramatically increase the quality of the fish, begin to control the flow of goods, and ultimately smooth out supply, a critical step to building markets.

Rather than taking issue with the power that has been amassed by processors, fishermen-owned companies could provide more contracted work to processors to do higher-value processing. Perhaps there is more profit in a processing business that processes all day, maximizing the number and quality of the lines they run.

This points to a key role for capital. Outside investors in the seafood commodity chain, or at least those that care about transparency, should look for opportunities to provide fishermen-owned brands with the float that they need to smooth out distribution. What is float? Fishermen are used to being paid for their whole catch within days of landing their product. The fishermen-owned company will need to buy everything that their boats land and provide at least 30 days of float, if not more, so that they can buy from multiple boats, contract for services, and freeze and hold product while smoothing out supply.

The fishermen-owned marketing and branding entity contracts for services. They contract for processing, cold storage, trucking, etc., while retaining ownership of their story, their fish and, ultimately, their brand. This, in turn, creates more transparency throughout the commodity chain.

If we invest in fishermen-owned brands that catch higher quality fish that are frozen where they are landed, and reposition possessors as contracted services, we gain the ability to know who caught our fish and how, and we may even beat the dire predictions about 2050. Either buy local or buy frozen fish produced by fishermen-owned brands. These changes in preference and practice could restructure the global seafood commodity chain for the better.

Rob Snyder is executive vice-president at the Island Institute.