Lobster Heads to Markets
by Laurie Schreiber
About 80 people gathered in Northeast Harbor for one of 16 Department of Marine Resources meetings this month to discuss limited entry to the lobster fishery and the marketing of lobster. Laurie Schreiber photo
NORTHEAST HARBOR – “At the end of the day, it’s either, do we want to do something or do we want to do nothing?” Department of Marine Resources (DMR) Commissioner Patrick Keliher asked fishermen, dealers, and other lobster industry stakeholders at a public forum in Northeast Harbor on Jan. 8.
“We’ve done nothing long enough,” said fisherman Bruce Fernald. The conversation among the approximately 80 meeting attendees centered on the future of promotion for Maine lobster. Keliher was looking for a consensus on whether the industry would be willing to accept a new surcharge on their licenses in order to fund a new marketing strategy.
Last winter, after the previous summer’s market glut and a subsequent crash that saw prices reach a 30-year low, the Department of Marine Resources’ (DMR) Lobster Advisory Council (LAC) formed a subcommittee to focus on ways to better market Maine lobster. The subcommittee hired marketing consultant John Sauve to come up with a marketing plan. Sauve is the president of The Food and Wellness Group. He came up with a business and marketing approach called “Project Maine Lobster: Build Global Demand.” The approach included a target budget of $3 million proposed to be funded by the lobster harvester, dealer and processor sectors. The proposal and budget target would be phased in over a three-year period and address a number of marketing initiatives to strengthen the Maine lobster brand in existing and new global markets.
The $3 million represents 1 percent of the harvest’s landed value. The money would be raised through license surcharges.
In 2011, the existing promotion surcharge on lobster fishing licenses yielded a tenth of that figure, or about $350,000.
“That’s nothing when it comes to the means to promote the marketing worldwide,” said Keliher.
In August, the LAC voted to move forward with the $3 million plan. Among the goals, the LAC said, Maine lobster must be identified as a unique product and must be differentiated from any other lobster in the world. Its identity must be associated with all forms of the product, not just live lobster.
In September, the Maine Lobster Promotion Council (MLPC) subsequently issued a request for proposals to six advertising firms, asking each to submit a position strategy and marketing plan to help strengthen and bolster global demand. In October, the MLPC heard from the three firms that responded.
The details of the marketing plan and the way it gets funded is now headed to the state legislature for consideration during its upcoming session. Keliher said that, these days, when fewer people are willing to deal with a live animal, much less drop it in a pot of boiling water, the industry must grapple with new ways to market a product that’s already processed.
“We’re talking about a generic marketing entity, like, ‘Got milk,’ ‘Beef – It’s what’s for dinner,’ those type of things, that get a broader understanding of the product out there and drive home that it’s a wild, sustainably caught product that people want,” Keliher said.
Bar Harbor fisherman Jon Carter agreed the industry needs to go along with the times.
“The old-timers used to say, ‘We don’t need to sell; Maine lobsters will sell themselves,’” Carter said. “We need to market our product. The industry should be leading that. I’d like to see some marketing, come up with some niche. Like the blueberries, the antioxidants, the healthy part of it. Plus, selling the way of life – the lobster industry’s way of life – would be a huge thing.”
But a couple of people objected to the additional surcharge. Dealer/processor Rob Bauer said he already pays $2,000 for a license for his operation. The surcharges would add another $4,500.
Bauer agreed the industry needs to grapple with live versus processed.
“Younger people aren’t eating lobster, because it’s a headache,” he said. “Younger chefs aren’t using live lobster, because it’s a headache. They want processed lobsters. All that conversation has got to be taking place. There are all kinds of substitutes for that processed product – salmon, scallops, shrimp – and that’s what you’re fighting against.”
One man said he pays more than $900 for his fishing license already. “You’re talking $750 more for my Class III license,” he said. “To spend that extra money on an idea that says the dealers are going to pay us more for these lobsters, if they get more, I don’t know. It’s a hard sell.”
“Right now, we’ve got too much supply for too little demand,” said lobster tour boat operator John Nicolai. “If you increase demand, it’s going to make boat prices go up. How can it not?”
John Hathaway, president of the processing/dealing firm Shucks Maine Lobster in Richmond, told fishermen, “I’d rather pay you $10 per pound than $2 per pound. If I can afford to pay you $10 per pound, that means somebody at the end, in Houston, Texas, or wherever, can buy my product. We’re on the same team.”
Hathaway said that Maine doesn’t have lobster; it has Maine lobster. “And Maine lobster means something,” he said. “It doesn’t mean something to people in Asia. The people who want to buy a USA product, and Maine lobster, are the people in the USA. And they’ll pay more for it. I see that every day. We’re not at the point yet where we can be a bigger player, but we’re getting there. The worst thing we can do is what we do now, and that is, we ship Maine lobster to Canada, in the highest volume at the lowest price, and then they add jobs, they add value, they ship it back to us as product of Canada.”
The goal is to maximize the economic value of the resource, Hathaway said. “You start with a sustainable product. Thanks to you guys, we have the most sustainable seafood in the whole world. We’ve got that foundation. I don’t think we should be talking about supply as much as we should be talking about the demand. How do we increase that demand? There are all kinds of ways that we haven’t even thought of yet. People will want to eat Maine lobster. They want convenience, but they love the product and they’ll pay for it. We’ve just got to figure out a way to get it to them.”
Carter said the Maine industry must get its brand awareness back. “We need to process our own product and we need that Maine brand back. That’s the key,” he said.
Keliher said another aspect that arose during LAC discussions was the need for greater accountability from the MLPC. The new bill has accountability written in, as well as a sunset provision after five years, and a third-party review of the results of the marketing efforts and what those efforts meant for the industry.
The third-party audit would go to the LAC and then to the legislature.“If it’s working, we could continue it. If not, we could take it off the books,” Keliher said The goal, he said, is to identify new markets, and hire marketing experts in those areas.
“You don’t have a group in Portland to market lobsters in China. Frankly, you don’t have a group in Portland to market lobster in California,” Keliher said. “You hire the marketing experts in those areas.”
The funding would be ramped up over a three-year period, he said. Fishermen, dealers and processors would contribute, through a license surcharge, $1 million in the initial year, increasing to $3 million annually by year three.
Funding contributions would be split 75 percent harvesters and 25 percent dealers/processors. The group mainly supported the bill.
“How can we not spend a few hundred bucks each?” said one man.
“If we don’t put money into advertising,” said another, “nobody knows anything about the product.”