13th Lobstermen’s Town Meeting

Talks Lobster Marketing, Landings
and Shrinkage

by Mike Crowe

Fu Sung Chiang, an economist at National Taiwan Ocean University in Taiwan. Chiang said the recent decline in demand for lobster in China is likely temporary. Airport construction in China will be opening markets in many more Chinese cities. Fishermen’s Voice photo

The Lobstermen’s Town Meeting met in Portland March 11-12. It is produced by the Lobster Institute in Orono, and brings together a range of industry people, many of them with a lot of skin in the lobster game. It is a meeting of American and Canadian lobstermen, scientists, lobster dealers, marketing experts and others.

This year the settlement index, landings and projections, Maine lobster marketing efforts, lobster handling and challenges to the fishery were the scheduled topics discussed.

Maine Lobster Marketing Collaborative director Matt Jacobson outlined his group’s research. The collaborative’s budget of $1.5 million, not a lot in the world of international marketing, Jacobson said, meant they had to find an area to focus their attention on. That area was the lowest price time of the year, which meant shedders. Distant, urban and high-end restaurant markets now know shedders or soft shell as “new shell” lobster.

In 200 restaurants from Maryland to Maine the collaborative researchers discovered only 4% featured Maine lobster on their menu. In Chicago, the second largest restaurant market in the country, Maine lobster was not even available in the supermarket, said Jacobson. Only 17% of the restaurants had lobster of any kind on the menu. This was a wake-up call for those who are only familiar with the restaurants along U.S Route 1 in Maine and Massachusetts. This meant the collaborative had to educate chefs about lobster, since most lobster is eaten in restaurants and ask them what they wanted in a lobster product.

Jacobson said 100% of the chefs at high-end restaurants wanted new shell lobster. They were making a variety of dishes out of this product. He said their target markets told them they wanted to know what the product was, how to prepare it and where it came from.

Luke Holden of Luke’s Lobster, a restaurant chain with 19 East coast restaurants as well as outlets in Japan, said his employees are trained to provide customers with information about lobster. Holden, whose father was a lobsterman, said his company sells 6 million pounds of Maine and Canadian lobster annually. He said information about lobster and biographical information about the lobstermen who catch it are things many of his customers are interested in and providing it builds loyalty to the product.

With scientists predicting a 2012 lobster season replay this year, with an early start and shed, the news that there appears to be a market for what had been an alternative lobster product is welcome. Indications are that the rising productivity of the lobster resource may be topping out. Rick Wahle from the Darling Marine Center in Walpole gave a presentation on landings growth over the last 15 years that compared the data to the settlement index which measures lobster larvae settling into the resource since 1989. The outcome suggests landings growth may be topping out and slipping some at similar rates along the northeast coast.

Rising demand for what is being caught, new shell or hard, may help balance out the volume difference financially. The rising Chinese market demand has slowed in recent months. Economist Fu-Sung “Frank” Chiang said he thinks this slow-down is temporary. Chiang said that to date, what he called 1st and 2nd tier cities in China have been buying American lobster. The reason, he said, is that these big cities have airports. However, there are many smaller cities which are large by western standards, 3rd, 4th and 5th tier cities, that have the potential of producing additional lobster markets as China brings air service to them.

Chiang, an economics professor at the Institute of Applied Economics in Taiwan, who is spending his sabbatical at the Gulf of Maine Research Institute in Portland, also spoke of the pricing of seafood in China. Supply, demand and venue are a part of the price, but in China tradition and status play a part in popularity and the market price of seafood products.

Regarding seafood marketing in China, Chiang said bluefin tuna is at the top in demand and price, below tuna is salmon and below that is tilapia. For shellfish, Australian rock lobster is at the top in demand and price, below that is live American lobster and below that new shell frozen or prepared American lobster.

Complicating the marketing is where these various selections would be served. The selection can be based on tradition, status and or price. Chiang said the large Australian rock lobster is often served as a central serving, like a holiday turkey in the U.S., and servings taken from it. Larger live American lobster may be served this way as well. Whole new lobster chix and smaller are split down the middle, baked and served in the shell as an individual serving. There have been a number of frozen products using new shell lobster for the Asian markets.

Banquet, wedding, large family or other may call for serving the selection with associated status such as Rock lobster, blue fin tuna or live American lobster. The frozen split and baked new shell American lobster is both new as a single serving option and a lower priced higher end alternative.

Spiros Turkakis, lobster dealer in U.S. and Canada. At the Lobstermen’s Town Hall Meeting Turkakis addressed the need for all in the industry to work together, to do more marketing and improve lobster handling practices. Fishermen’s Voice photo

“The most important thing is to figure out how we can work together, spend more time marketing and learn to handle lobster better. We need to begin treating lobster like eggs.,” said Spiros Tourkakis of East Coast Lobster in Lynn, Mass., and Maine Fair Trade Lobster in Prospect Harbor. He praised the work Luke Holden has done in educating his 350 employees about lobster and how to pass on that knowledge to customers who are interested in knowing something about the lobster they are eating.

Tourkakis said he is changing his operation to lighter 60lb. crates because they are easier to lift and less likely to be thrown down injuring the lobsters. He is also switching to horizontal dividers in the crates so that fewer lobsters are piled on one another. Improved lobster handling practices were presented as an essential component in the future of marketing lobster and profitability for the industry by Tourkakis and Jean Lavallee, a veterinarian from Prince Edward Island who has worked with lobster since 1996. Picking up too many in one hand, squeezing the shell, fresh water exposure, heat exposure, over packing crates, dropping crates and damaged legs are some of the things that are easily avoided to reduce mortality. Mortality that eventually comes back to bite the boat price since buyers have to figure mortality, shrinkage, into what they pay per pound.