When Kristen Millar became the Maine Lobster Promotion Council’s new executive director two years ago, she wanted to know who buys lobster, where it is processed, what are customers’ preferences, what are the profit margins. You can’t market a product you don’t know anything about, Millar pointed out.
There was no information to be found. What she has learned since has put industry on notice: Maine lobster is dangerously close to losing its brand recognition as pure, healthy, clean and coming from a sustainable fishery. The brand was in jeopardy of losing its meaning in the marketplace.
If the problem seemed to sneak up on industry from behind, the response to it has been direct and swift. Today a cadre of industry, private, and government teams are moving quickly to reverse that trend and secure the future of Maine lobster as a brand.
Millar’s research revealed that as much as 70 percent of the Maine lobster catch is exported to Canada, where it is processed and shipped back to the U.S. as “Product of Canada” (WWF November 05). Only two Maine processors, both in Portland, remain to add any value to the live product that is essentially being traded as a low value, high-risk commodity. Their product is cooked and flash frozen. Another venture led by John Hathaway will be coming online in Richmond using new processing technology that packages fresh lobster meat with a long shelf life.
One of the people Millar went to with her industry research results in hand was state Sen. Kevin Raye of Washington. As Millar recounted the situation to him, he said, “Bells went off. I was really compelled when [Millar] spelled out the crisis. It was shocking to me that such a major industry was being transformed, with so little awareness, and the threat it imposed of losing control of the Maine lobster brand,” says Raye. “We can’t stand by and see a major Maine legacy go by the wayside. It’s the gold standard. We’ve to keep it that way. There’s enormous potential for the future of the industry if we can protect that.”
Certified
Protecting the brand requires a means of tracking lobster to ensure that it is from Maine, then developing a set of standards by which lobsters are graded on a quality scale to ensure that customers know they’re getting what they pay for.
Saying that and actually doing it are two different things. No brand emblem exists that identifies Maine lobster, and only the largest lobster wholesalers employ grading systems, of their own design. Neither has a lobster quality system been accepted by the industry as a whole, nor a certification and tracking system that is even remotely reliable.
Protecting the Maine Lobster brand entails more than putting nicely designed logos on a package or fancy rubber bands on lobster claws. The goal is long-term sustainability, and no amount of marketing will retain customer loyalty if the product doesn’t meet its promised quality and price target. What Millar, Raye and others want to see is industry-wide agreement and acceptance of quality standards and third-party certification for Maine Lobster as a brand.
Sen. Raye introduced the Maine Lobster Promotion Council to his contacts at the Maine Manufacturing Extension Partnership (MEP). Funded by federal and state dollars in every state as a response to job losses in the domestic manufacturing sector, the non-profit MEPs bring broad experience and expertise to help small and medium manufacturers improve efficiency, eliminate waste, and integrate their business into the global economy. Because it is a national network, Partnerships also can suggest solutions to problems that companies in other sectors may have experienced.
Sen. Raye knew of a program that Alaska’s seafood industry had undertaken with that state’s MEP to shore up the value of wild caught salmon. Wild-run salmon prices were depressed at the time. “I thought Alaska’s seafood quality program would have applications to us,” says Raye. “They developed a quality grading certification system that cemented the brand: people found value in “Alaska Grade-A Quality Wild-run Salmon,” and prices went from one dollar a pound to six dollars a pound.”
Why reinvent the wheel in Maine? “The Alaska program shows a lot of potential and return on investment. If modified, it can be applied to lobster,” says Terry Shehata, vice president of the Maine MEP. They and MLPC have applied for a U.S. Dept. of Agriculture (USDA) grant to fund for a Maine pilot project modeled after Alaska’s salmon program. If it comes through, the pilot project would help MLPC and MEP work with industry to develop and field-test lobster quality standards and inspection techniques, as well as industry training. Before the system would be ready for full, industry-wide deployment, results from the pilot project would be assessed and tweaked, and a “Certified Maine Quality Lobster” emblem would be designed for both live and processed lobster.
Industry wide adaptation will take time, says Shehata. “The process of quality certification is a series of top-to-bottom training related to lobster handling – when you’re catching it, shipping it, handling it in the processing facility, inspection – the whole supply chain, which for the lobster industry is complex.” says Shehata. The pilot project would include training everyone in the ways of certification and grading, from lobstermen, dealers, distributors and processors to restaurants and chefs, supermarkets and ultimately the consumer. Shehata predicts that industry will not only adapt the certification standards but will pay for ongoing training and inspection on a statewide basis. Why? Ã’Because it is a value to industry. At the endpoint, if they want it, they will pay for it,” says Shehata.
Although Alaska’s experience shows that processors have found it worth the investment, Shehata says that program is “in hiatus” due to management difficulties. Still, Shehata recalls that the price of Alaskan wild-run salmon went from one to six dollars a pound. “That’s just an example of how it can work. Clearly that kind of success can be transferred to the lobster industry if it is done properly,” says Shehata.
Shehata adds that a hallmark of the program is that it is all-volunteer; no government official touches it.
Stop Live Exports
Even if grant funding comes through for the pilot project and development of quality standards – think “Premium – Select – Fancy” grades of lobster – there is still the problem of live exports to Canada. The key to long-term industry stabilization is to ramp up processing in Maine, according to Jack Cashman, executive director of the Maine Department of Economic and Community Development (DECD). “We need to recapture processing. [Maine’s] resource-based economy has been left to their own devices too long,” says Cashman. The DECD helped John Hathaway and the town of Richmond win a $400,000 community development block grant to develop his lobster processing plant there.
“We really think the biggest opportunity lies in value-added products,” says Maine Lobster Promotion Council’s Kristen Millar. “There’s a much bigger margin in already-made products, like Lobster Newburg. I’d like to attract business in Maine to take advantage of developing value-added opportunities.”
Hathaway’s venture is an example of what can happen. Sen. Raye looks out over the coast of eastern Maine and sees more opportunities waiting to be snatched up by entrepreneurs. “We ought to be promoting other potential industries. I’m from Washington County, where sardines used to be a vital part of our economy,” says Raye. “There were dozens of sardine factories, and many are closed up. There’s capacity there to encourage more seafood processing, and a ready supply of experienced workers. We should be looking for down east opportunities to jumpstart some of this capacity.”
There’s general agreement that protecting Maine Lobster as a brand should be a high level priority for industry and state government. The alarm bells have sounded, and wheels are turning to develop a winning strategy. While market trends that brought the industry to the place it is may take time to reverse, at least from a marketing standpoint Maine Lobster is starting from a position of strength: Maine lobster has the recognition and positive associations marketers dream of. Imagine if you were trying to market “Connecticut Lobster, fresh from Long Island Sound.” It would be an uphill slog from the outset.