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Commercial Fisheries News
Volume 35 Number 9
May 2008
Lobster town meeting focuses on markets, prices
PORTLAND, ME – Lobstermen and dealers from both sides of the border gathered here on April 4-5 to talk lobster at the annual Canadian/US Lobstermen’s Town Meeting hosted by the Lobster Institute and the University of Maine. This year the discussion centered on both pricing and marketing factors impacting industry economics.
After opening remarks and introductions, Dana Rice, Maine lobster dealer, bait supplier, and planning committee chairman, turned the discussion over to the crowd of 60, explaining that the idea for the cross-border meetings had originated with fishermen.
The conversation first focused on the rising costs of fishing – a frustration shared by US and Canadian lobstermen.
“Some of these costs are considered fixed, and we must incur them in order to fish,” said lobsterman Elliott Thomas of Yarmouth, ME. “Many of these costs rise each year, none so much as bait.”
Of primary concern for lobstermen in the room was rising fuel costs left unmatched by stagnant boat prices for lobsters at the dock.
“When I started fishing in 1991, fuel was at 90 cents per gallon and lobsters were selling for $4.50. Last year, fuel was (close to $4 US) per gallon and lobsters were $4.50,” said Laurence Cook, a Grand Manan lobsterman, panelist, and chairman of his local lobster advisory board.
Fragile balance
However, amid calls to somehow increase the price of lobster, Peter Anastasia, sales and lobster category manager with Orion Seafood in Portsmouth, NH, warned that it won’t be easy.
“With the economy doing what it is doing, the casual dining sector is suffering,” he said. “There’s a limit to how much these guys can pay. We can’t lose this (casual dining) sector.”
Kevin Douglas, who is affiliated with Outback Steakhouse, part of OSI Restaurant Partners, said that the North Atlantic lobster tail easily can be substituted with other proteins if prices rise out of the customer’s reach.
However, Cook said that, when faced with low prices at the dock, fishermen are tempted to compensate by taking more out of the ocean.
“We are in a position to say, ‘Well, we’ll just ramp up effort.’ Above all things, price impacts conservation. In the barebones fishery that we are in today, with the price the same as it was years ago, the temptation to cheat and the need to go farther is great,” said Cook.
Combating costs
As both questions and complaints about the current lobster price circulated, no one was able to offer an exact remedy to alleviate the problem.
There were suggestions to instate rolling closures as a possible way to increase demand, shorten the unprofitable season, and give soft-shell lobsters extra time to harden into a better product.
Mike Tourkistas, meeting panelist and CEO of East Coast Seafood Inc. in Lynn, MA, suggested dealers and wholesalers create partnerships with lobstermen.
Other ideas to combat costs were raised, including the possibility of establishing large-scale – potentially statewide – cooperatives.
Green label?
Several lobstermen also expressed hope that increasing marketing efforts, including possibly obtaining an eco-label, for North Atlantic lobster might help improve consumer demand.
“We cannot continue to fish lobster as junk and try to market them as a luxury item,” said Cook. “We are fishing one of the most environmentally sound fisheries in the world. We need to market it as such.”
While fishermen agreed that a “green” label might help raise dockside prices for lobster, the audience determined that the exact value of an eco-label at the marketplace is as yet unknown.
Another question for the panelists was exactly how to go about successfully obtaining an eco-label.
“It’s something we need to do internally. We have different measures, different trap limits,” Cook said of the Canadian and US lobster fisheries. “We aren’t going to agree on conservation measures, period. Collectively, we need to say, ‘We do different things in different areas, but this is an environmentally friendly industry.’”
Rice had reservations.
“This eco-friendly business has scared me more than anything has scared me in my life,” he said.
Marketing
Although he said he was hesitant to embrace an eco-label, Rice encouraged lobstermen to avoid distinguishing between Canadian and New England lobster and instead market a North American lobster.
“But,” he added, “as far as marketing, we are about the cheapest out there. Are you willing to put a penny a pound into marketing?”
The question remained as to who would foot the bill for better product marketing. As one audience member and former Maine Lobster Promotion Council member explained, the idea of placing surcharges on licenses to help fund marketing efforts had already been floated and went over “like a lead balloon.”
Boat price frustration
A large part of the discussion throughout the day centered on a lobster’s journey from the boat to the plate that demonstrated general frustration and confusion over inflexible and low prices to harvesters.
“If there’s a future in this industry, it’s going to be in reducing the number of hands that touch that lobster. There’s a terrible disconnect between the $27 on the plate and the $4 I receive. We need to deal with the $23 in between you and me,” said Cook to Douglas of the Outback Steakhouse.
The added costs included profit margins for the buyer, shipper or wholesaler, airfreight, the importer or distributor, and, finally, the retailer. Cook suggested that changes in the industry be made so that the prices better reflect the changing seasons.
“Large lobsters with more weight fetch a better price, but they are harder to market. Price should reflect lobster quality and the amount of meat in the lobster, but it doesn’t,” he said.
Waste nothing
Lobster Institute Director Bob Bayer advised lobstermen to extract every ounce of product value from the lobster possible.
“Throw away nothing. Make something out the shell, even if it’s just compost. The more added values you can extract from that lobster, the more profit on the harvester’s end,” he said.
Thomas suggested that lobstermen address the product’s negative connotations and make it as easy and accessible to the consumer as possible.
“I’ve heard from people that they don’t like cooking lobster in their house because of the way it smells. We need to look at the negative reasons as to why people aren’t buying it and see if we can turn them around a bit. I think processing and cooking is the way to go,” he said.
Further discussion focused on the economics of the industry. Suggestions, ideas, and solutions circulated over the course of the meeting, allowing lobstermen and dealers alike to further develop and question potential pricing and marketing schemes.
The Lobster Institute plans to publish a full transcription of the panel discussion on its web site at <www.lobsterinstitute.org>.
Lauren Simmons
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