Northern lights: Meet the competition with marketing

First printed in the MLA Newsletter, November, 2010.

America’s seafood needs promotion and promotion dollars. It’s hard to escape the headlines about reduced ex-vessel prices for our seafood and American fishermen going out of business. Lobster prices have tanked, gulf shrimp has little net value, squid values suck, pollock is gutted, cod demand is on the bottom, and herring, at least in Alaska, seems to have sounded for good. The American fish farming guys aren’t doing much better. Catfish farms are friend (30 percent in last decade) and many trout farms are belly up.

What happened? Sure, the economy is down, credit is tight and consumer spending isn’t what it once was. However, the big impact on most struggling American fisheries is seafood imports and competition from substitute, non-American, seafood products – more than 80 percent of seafood consumed domestically is imported. Tilapia, primarily imported, impacts both market share and price for genuine pollock. Chinese and Asian farms are putting gulf shrimp fishermen out of business. Russian salmon increasingly competes with Alaska’s wild product. Consumers have moved from higher priced lobster to less expensive imported seafood protein, and domestic codfish demand is, well, not yet hooked as pangasius fills in.

One response to competition is new regulations. Recently, Louisiana required restaurants and retailers to label catfish for country of origin. A few years ago, canned salmon producers tried, unsuccessfully, to require similar labeling, this through national country of origin labeling legislation. Also, back in 2000, Sen. Robert Byrd (D-W.V.) under the Continued Dumping and Subsidy Offset Act, tried to curb the more egregious seafood import behavior with anti-dumping tariffs. By 2003, the World Trade Organization deemed the Byrd amendment a violation of existing trade agreements.

Some regulations may be successful, but experience shows that legislating assistance to the seafood industry is often difficult to do, limited in scope or duration and sometimes strongly opposed.

The better response to competition is marketing! (Hardly a new idea, but worth closer consideration.) Seafood industry reports, task forces, conferences, meetings, and trade associations all champion marketing – more marketing, better marketing, broader and more consistent marketing over time. The reason? It works. Recently, Maine Gov. John Baldacci’s lobster industry task force reported a recommendation that the industry create a public-private entity that would spend $7 million to $10 million annually for marketing.

The Massachusetts Legislature is looking at a commission to study marketing and seafood branding. South Carolina and Louisiana are considering similar marketing initiatives. All of these efforts cite Alaska’s Seafood Marketing Institute as a successful marketing example but struggle with how to fund their own seafood marketing efforts.

ASMI is a 28-year-old success story. It is a quasi-state agency that collects a voluntary “tax” from those who process Alaska seafood. The ASMI board consists of processors and harvesters appointed by the governor. The entity cannot promote one producer’s product or a particular company. Instead, ASMI’s focus is on the Alaska brand, composed of all Alaska seafood harvested. The ASMI logo, a traditional-style purse seine vessel with background mountains, is widely associated with health and purity and wild seafood. Nevertheless, in 2002-03, when the Alaska salmon industry was drowned by a worldwide tidal wave of farmed salmon, ASMI’s budget couldn’t address our marketing needs.

At the time of our crisis, Sen. Ted Stevens (R-Alaska) was informed that approximately $280 million is collected annually through U.S. customs laws on fishery products. Stevens redirected some of this money to Alaska and several other states to meet specific fishery industry needs. The Alaska funding component was limited to marketing.

Over the next three years ASMI and the Alaskan salmon industry were able to market our way to new products, increased demand and better prices. However, this success require outside (federal) marketing dollars to stimulate industry and supplement state budgets!

Similar marketing needs exist throughout the U.S. seafood industry. These needs are highlighted when any particular American fishery is in crisis, as the lobster and shrimp industries are now. But marketing is not a crisis proposition. Effective marketing requires a constant message over time, and an effective message requires funding. Self-funding is essential, but it frequently doesn’t meet actual marketing needs – especially in a crisis. Often, a particular fisher is asked to pay for marketing when it is least able to raise the cash.

The solution is to look to federal funding for U.S. seafood marketing. After all, the tariffs and duties collected from imported marine products ($280 million annually) often are the very products that compete with U.S. produced seafood. It’s only fair that the seafood industry have some of this revenue to fight back with marketing. Furthermore, keeping American fishermen employed is good public policy for both the consumer and the country. Fishermen are small businesses producing both food and economic value. Dollars spent on marketing to save fisheries will return to the treasury many times over in tax revenues. Finally, the national campaign to eat healthy must turn to seafood – shouldn’t it be our own?

It’s time for fishermen across the country to think nationally and act locally. Let’s get together to encourage our senators and representatives to redirect some of the fishery product import revenues collected by the federal government toward the marketing of America’s seafood.

Duncan Fields, an active fisherman, serves on ASMI’s international committee, the North Pacific Fishery Management Council and is chairman of the Alaska Seafood Marketing Board.