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Fukui's Monthly News Letter

Quality and quantity = profits

The more I travel and experience the many factors of the shellfish aquaculture industry, the more excited I become of the opportunity both short term and long term that is available for individuals involved.

One of the upsides to the work I do is meeting enthusiastic, energetic people who are very open to sharing information for the betterment of the whole industry. These people have a commonality with the simple rules of success: the more you share the more you get back. I have made it a point over the years to lead by example and have shared information with as many growers as possible and through regular columns such as this one.

In July I decided to change my travel itinerary a bit and get back to my favored mode of transportation - a motorcycle - that I havenít pursued in over 15 years. I spent a period of my life selling and racing motorcycles so I called up my old racing partner and friend to convince him to accompany me on a motorcycle trip to Charleston, South Carolina from where we live near Ottawa, Canada.

In the end we traveled 4,400 km (2,640 miles) in a week, had a one day farm visit, six meetings and lots of scenery. All this in what was supposed to have been, by orders from friends and family, a vacation!

Aside from the vacation thing, my real objective was to meet with Knox Grant and his staff at Atlantic Farms just outside of Charleston.

I also wanted to get a better idea of what was taking place on shellfish farms in the mid Atlantic area so I arranged to meet with Jack Whetstone, an extension agent from Clemson University in South Carolina, and Skip Kemp at North Carolina Sea Grant. As well, the people Dorothy Leonard at National Oceanic & Atmospheric Administration / National Marine Fisheries Service has been working with in Maryland on the Chesapeake Bay oyster projects.

I was given a tour of Atlantic Farms operation by Colden Battey, operations manger, who along with Knox has been associated with the farm for a number of years. Atlantic is a totally vertically integrated shellfish company from hatchery to final market selling under the Seaperfect brand.

The original company used to be called Atlantic Littleneck Clam Farms Inc., which unfortunately ran into financial difficulties back in the mid 90ís. Knox and his South American partner took over operations at the facility in 1996 and, with a lot of hard work and dedication, made it into a successful company in a relatively short time. In a future column I will go more in depth on this exciting farm visit.

In conversation with Knox I found that we have a lot of similar views and thoughts on the shellfish industry. Knox, like myself, continues to look at the world market and how the future will effect the industry.

We had some interesting discussions on how the global marketplace is changing and why some regional areas are much better at addressing these markets than others.

My travelling, understanding and observation of the industry combined with Knoxís hands on experience in Chile, the US and Canada gave up some trends that are taking place around the world that, with the exception of a handful of North American producers, are being largely ignored.

Keith Reid of British Columbia who pioneered the Commercial FLUPSY and made it work (December/98 column) visited our office in mid-September. I discussed similarly the same items that Knox and I talked about and came up with close to the same overview.

In short, for shellfish growers the lesson that needs to be applied is Quality and Quantity = Profits or QQP.

I have written about some of these points before, "Inputs, Outputs, Profitability" (July/99 column) however in order for North American growers to take a larger market or world supply view they will have to take these points into consideration.

Even if growers want to sell more into the domestic markets they must adapt or some other country that has met the QQP objectives will. There is already some evidence of this with scallops and mussels.

Quality has, depending on how or who is looking at it, a number of definitions.

The consumer is the one that has the ultimate decision and it is imperative that you understand their needs and wants in order to trade your product for their money.

In the case of oysters, shell shape, taste, shelf life and appearance, to name a few, can make a difference to perceived quality. For matter of discussion I am talking about the half shell higher priced market vs. the shucked meat market.

In the case of mussels, consistent size, shell appearance, lack of sand or grit and meat yields all contribute to quality. Since cultured sock-grown mussels easily address these issues where wild harvest can not, it is easy for the consumer to tell the difference in quality and the resultant final selling price per pound.

This is true in North America as well as Europe where Bouchots grown mussels (wooden poles with socking wrapped around like a barber pole stripe) demand and get a much higher price per pound than bottom cultured mussels.

Other shellfish species offer similar structure. Once youíve had the experience of consuming clams with grit and the higher quality without grit, it easy to see why.

For the demand and price of a product to go up, then you have to offer higher quality, Honda did this with cars and McDonald's with hamburgers.

I have been in several restaurants lately that, right on their menus, warn patrons that the consumption of shellfish could be harmful to their health if they are older or perhaps suffer from a difficulty in their immune system.

Even with the public health standards that are enforced today some restaurants still feel compelled to advise their customers of this. From a consumers point of view this has the perception of poor quality control. To overcome this we still have some work to do. As primary producers we must take the lead and produce beyond existing standards.

Outside of water quality, site location and depuration, husbandry methods can address a lot of the quality issues. Because we are in a rapidly changing industry it is important over the long term to constantly update and be aware of what equipment can be used that can effect the quality issue.

One of the keynotes with respect to husbandry equipment and quality is to think more about output pricing than input cost. Not that input cost are unimportant, it is just that in a lot of cases reduced costs donít really mean increased overall profits. The consumers who pay more for cultured mussels and the high quality oysters at oyster bars and upscale restaurants are not wrong in paying more for quality.

Once you have addressed the quality issue you have to really work on the quantity challenge. I have heard many times over and over again from shellfish producers that once they find new customers they are stuck because they can not produce enough product. Dedicated seafood brokers need volume in order to make money, if your operation canít supply the volume then they will not be able to put effort into promoting your quality-cultured product.

In some cases forming a co-operative with fellow growers can overcome this however learning to trust each other to go after the big market instead of the local market is an issue. As well if you follow this path your quality assurance must be consistent, which from observation experience is not easy.

Quantity can be attained by intensive farm management, planning, and keeping your eyes, ears and attitude open to advancements within the industry with respect to advancing husbandry methods.

You should know by now that change is constant and with the advent of the Internet for communication and the youth of the aquaculture industry, things are happening at a more rapid pace than ever.

Those growers that spend their focus on day to day activities and ways to beat costs down may miss the most money they will ever make by not taking the time to learn what is new and better.

Case in point. I had a discussion with an oyster grower over new equipment technology that will give him a quick return on his capital invested, a consistent high quality product, increased volume through enhanced site efficiency and decreased labour per unit which would therefore allow him to produce more.

His reply to me was that he is happy with his equipment, it works fine, he has been using it for more than five years and it is inexpensive to deploy.

His real problem however is finding new customers outside his local area in higher priced markets that can work with his low production volume. As a result he is left with supplying local markets or for cash flow selling lower quality bottom oysters at wholesale.

The answers are there and getting better all the time; you just have to be organized, forward thinking and brave enough to respond to the production questions.

This of course would only apply to those that have set their goals to increased production and profits.

In my next column I will fill you in on how the preceding worked in an area where growers had been reluctant to change. The area is now enjoying increased success growing oysters because they adapted to change.


Contact Don Bishop at:
Fukui North America
PO Box 669
110-B Bonnechere St.W.
Eganville, Ontario K0J 1T0
CANADA
**NEW**Tel: 613-559-0075 or 613-628-5266
**NEW**Fax: 613-432-9494
Email: kate@fukuina.com or don@bishopaquatic.com

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