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Fukui's Monthly News Letter

Package your cultured shellfish

I recently saw some statistics from the Organization for Economic Cooperation and Development (OECD) on world seafood production. In the report based on 1995 information it states that Aquaculture made up 17% of the total harvest worldwide. The significant number is that of the total dollar value Aquaculture made up 30% of the total harvest dollars.

Based on these numbers which are now 3 years old, it is safe to say that there are a number of individuals, that have figured out how to promote and sell cultured seafood, at a higher dollar value than wild harvest, based on harvest volume vs. harvest dollars.

I am pretty safe in saying, however, that the majority of these individuals and markets are in the finfish sector.

Within the shellfish sector a major amount of production is still grouped within wild harvest inventory and as a result receives very little special designation from a marketing perspective and pricing schedule.

When you consider that the aquaculture industry as a whole receives much higher margins than wild harvest there is definitely a lot of room for improvement for the shellfish sector.

The responsibility for enhanced marketing information has to come from the growers themselves, organized cooperatives or well-focused distributors (brokers) and processing companies.

If approached properly two very beneficial things will happen:

1. As the consumer becomes accustomed to the quality value of the cultured product they will be happy to pay more.

2. The distribution system and end merchants will increase their efforts because they will be able to enjoy higher margins and eventually higher than ever ratios, both which I would bet on will motivate them immensely.

Case in point Ottawa, Canada; near where I am based, wild mussels sell for CA $0.99/lb. while cultured PEI (Prince Edward Island) mussels sell at CA $2.49/lb. The growers receive a farm gate price of CA $0.60 to CA $0.75 per lb.

The people at the Seafood store claim they sell 10 times the cultured mussels over the wild mussels and as you can tell from the price difference, consumers are not motivated by low price.

The other benefits the store mentioned is that they can choose in advance when they need inventory and are not at the mercy of wild harvest availability.

Why then would smart price consumers pay 2 times the price for cultured shellfish? The answer lies in proper marketing.

In PEI they face competition from the other Atlantic Coastal provinces as well as the state of Maine and others for both wild and cultured fresh mussels.

Realizing that they could not survive on the monetary value allotted to the wild harvest, they set upon a plan of organization themselves together as a group, to promote to the market place the difference of PEI cultured mussels over wild product. The key word here is group, that right, growers organized as a team to enhance their long-term objectives. (The British Columbia Oyster Growers have found this very effective as well, so it wasn't a chance happening.)

It didn't happen overnight and as a matter of fact took more than a few years, starting from an informal small group to a sizable organized format. The results of their labour have been returned many times over based on market demand and their share of the marketplace.

So how did they do it?

Basically, CONSTANT promotion to different markets on the uniqueness, value and benefits of the product combined with packaging that stated that the product was from PEI and that is was farmed raised.

I have told this story to a number of growers and they have all resounded that it can't be that simple.

Well in theory it was, however in reality it took a lot of hard work, consistent patience and persistence.

When I ask them how they identify their product the answer is almost always the same, THEY DON'T, they then wonder why they get such a low farm gate price.

I have discussed this with a seafood buyer for a major supermarket chain and his reply was,

"We know that the aquaculture industry exists and we know that in general the consumer will pay more for quality and the perspective of value offered by the enhancement of culture seafood. What we don't have however is a supply that is:

1. Packaged for point of sale marketing

2. A large enough volume to satisfy our needs."

You see, they are so focused on their core business of foodstuff distribution, that it is not their job to educate the growers on what they perceive the market wants.

What they would welcome is a group of growers (cooperative) that will package and identify the products to meet their customers needs right from the farm or processing plant. If done properly, they will pay more because they will be able to sell for more.

There are also interested in coordinated consumer taste tests that other food companies have found to be so popular to promote the sale of new products.

The packaging that is required is such that it must be colorful, have a label that identifies that it is cultured, where it came from, why it is the best, have a bar code, as well as other marketing information. A picture of the prepared product and even a few suggested recipes of how to prepare the product will really add point of sale customer appeal.

Be careful, however, that you do not use the wrong packaging. At a recent high volume discount food store I saw mussels packaged in a see through plastic bag that had a two-color label. Even though the bag had ventilation holes the liquid dripping out of the bag as well as that trapped with in gave the appearance that the product was not very fresh, sort of like bruised apples in a plastic bag

I know this type of marketing has been suggested by some of the government run agency guru's however without the cooperation of the growers and the distribution system, the success has been limited.

We introduced last year, a line of product to market bags that have one of the finest four color printing processes for labeling I have seen, so clean that you could put a photo of prepared product on the label like those you see in seafood cook books.

The growers we talked to balked at the idea because the used onion bags or the plastic netting bags they where using were costing between $0.08 to $0.12 per bag, where the printed ones were in the $0.30 range.

Think about it from a consumer perspective, you are part of the large group of the inland population that normally consumes shellfish in a restaurant, does not prepare a lot of seafood at home. You are expected to purchase shellfish that you are probably not totally aware how to prepare, in a bag that is labeled onions or some other vegetable or in a plastic net type bag that has no label at all.

The irony is that the brokers and distribution people we talked to were usually more than happy to pay much higher than the $0.20 per bag increase if it helped them sell more product at higher prices.

For you accountant types, this means that on a 20 bag of mussel you are adding $0.01 extra per lb. to increase your sales at a higher margin!!

What really proved the value of this marketing point was when I picked up a fresh pineapple at a super market that had an individual tag attached with recipes on how to prepare different servings, on each and every pineapple.

Restaurant owners have a similar tale, they know that they get repeat clients if they offer the freshest and best tasting food. They would be more than happy to order only cultured shellfish from their distributors if they knew the difference in the product. Without proper labeling and some market instructions it is hard for them to be loyal to a geographical area product and to promote it.

Case in point I was at a restaurant somewhere in the Atlantic Northeast a few years back and the couple next to me asked the waitress if the mussels offered were PEI cultured mussels. (Obviously an educated shellfish consumer) The waitress had to go to the kitchen and check and later returned with the response that she checked with the chef and they unfortunately weren't sure, although they thought so. The couple did not place the order!

On a very recent trip to Atlanta I feasted on New Zealand green lipped mussels, which were identified on the menu as being from New Zealand. I quizzed the chef on why mussels from New Zealand were being served and not native blue mussels. His reply, "We were not aware from our suppliers that cultured blue mussels were available and even if they are would our clients like them?" Proper package labeling would have been an asset here.

Now if you think that this is too simple to be true and that there is no way that a grower can increase the value and connivance of the products, listen to this. I dropped in to a small supermarket near where I live, about an hour and a half from Ottawa, in the middle of cattle country where the national consumption of seafood per capita is probably near it's lowest. Here I found a 1lb. box of FROZEN Italian seasoned mussels, the package like most of the ones in the freezer case had a pictured of the prepared product and told you how to prepare, cook and serve the by either oven, BBQ, or Microwave. The price CA $5.00 per lb.!

So shellfish growers if you want to make higher margins what are you waiting for? Let the consumers know who you are and the quality and value of what you are offering. Your competition is not the wild harvest, it is all the other foods that are out there fighting for their place on the consumer's plate.


Contact Don Bishop at:
Fukui North America
PO Box 669
110-B Bonnechere St.W.
Eganville, Ontario K0J 1T0
CANADA
Tel: 613-628-1704
Fax: 613-625-2688
Email: kate@fukuina.com

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