It’s the end of the fishing season and along the coast, lobster traps are stacking up in dooryards waiting for repair as the winter’s first snow looms. And as we plan our holiday meals, let’s remember to feature the local catch. Meanwhile, some in the lobster industry will continue working through the winter to find ways to capture more value from the harvest here in Maine.
Recent headlines from the Maine Lobstermen’s Association newspaper Landings speak to what the lobster industry is facing along our coast:
“Canada, European Union Sign Free Trade Agreement,” “New Agreement to Share MSC [Marine Stewardship Council] Certification Completed,” “Fall trade shows in Hong Kong, China and Korea”¦ Technical seminars in China and Macau”¦ Lobster Promotions in France, Poland, Malaysia, China, South Korea”¦”
The historic boom in lobster landings has been an important factor driving down the price fishermen are paid and tightening margins throughout the lobster value chain. As a result, U.S. and Canadian lobster industry representatives are looking to develop overseas markets.
Canadians have us beat on volume, and their investment strategies, paired with government policies, are focused on expanding exports to nearby European markets. In addition, Canadians catch more hard shell lobsters that travel well to these markets.
Further investment in strategies that pit Maine’s lobster industry in a battle to capture European markets would seem unlikely to succeed, but those inside the industry would know better. Then how might we expand Maine’s infrastructure to shape access to other overseas markets and give us a competitive edge—while delivering a higher price to the fisherman?
It is encouraging to see our state trade missions eyeing Asian markets. The focus on these markets will be reinforced by the $2.4 million that the lobster industry and our state will invest in brand development over the next few years. Much lauded local businesses such as Linda Bean’s Perfect Maine Lobster and John Hathaway’s Shucks continue experimenting in the U.S.
Bean’s model for vertical integration and branding and Hathaway’s focus on value-added processing stand out as strategies for securing price and market share in the U.S. and abroad. Not surprisingly, the pair is the driving force behind MSC certification, a key investment in future market access at home and around the globe.
The work that is being done should better position lobster for both U.S. and Asian markets, but will it generate a higher price at the boat?
The Alaskan “troll caught” salmon fishery may have something to offer by example to inform how we improve boat price. Trollers faced a similar fate to Maine lobstermen in the early 1990s. Overwhelming competition from international salmon aquaculture operations made it virtually impossible for harvesters to get $1 per pound at the boat. Prices were falling, despite plentiful fish stocks and a reputation as a conservation oriented fishery. Many of Alaska’s small-boat, owner-operator salmon fishermen were on the brink of bankruptcy.
They, too, had a history of cooperating, much like the lobster harvester cooperatives that dot the coast of Maine. In fact, trollers had pooled resources to build processing infrastructure in the ’70s and ’80s for getting whole processed fish to market. Despite this visionary investment, the volume of aquaculture products drove the price lower and lower.
In response, they did something spectacularly risky. The fishermen on the board of the company decided to hire an executive out of the food industry to run their business. Not a fish guy, but a food guy.
The new CEO provided a critical insight: “Let the new salmon aquaculture companies teach the world to love cheap salmon. We will produce the highest quality salmon in the world and focus on the top of the market.”
In partnership with the Alaskan government, 450 fishermen in the Seafood Producers Coop invested heavily in state of the art processing equipment and refitted a processing plant to produce salmon fillets. Today, the plants in Sitka and Bellingham produce some of the highest quality salmon fillets in the world under the brand Alaskan Gold. Twenty years later, they are getting $5—$7 at the boat per pound despite sustained competition from salmon aquaculture.
What can we learn from this? Fishermen-owned processing may be an important key to leveraging future boat price. Not just any processing, but high-value-added-processing of the sort inspired by Shucks. The trollers made the critical decision to hire a CEO and sales exec from the food industry.
Would Maine’s lobstermen or perhaps lobster coops consider coordinating investment strategies to create a version of the seafood producer’s cooperative here in Maine? This is not a new question. It has been asked before, but in the past the risks outweighed the benefits for the fishermen who were in the room at the time. Dismal average boat prices and the uncertainty ahead would suggest that it is time to put resources behind answering this question once again.
Rob Snyder is president of the Island Institute, publisher of The Working Waterfront.