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November 11, 2011

Green Fish Entrepreneurs

by Philip Conkling

The first, and sometimes the only, thing people think they know about Maine fishermen, and especially island fishermen, is how fiercely they resist change. Like all truisms, this view vastly oversimplifies a more complicated reality. Of course, those whose lives are closest to the edge—whether that edge is geographical, economic or political—are more vulnerable to change. And whether those changes come from politicians in Washington or Augusta or from brief violent storms does not really matter because such changes usually threaten lives and livelihoods.

But we should not forget that those who successfully inhabit these edges also have to be highly adaptable. You have to respond to whatever the weather and markets throw at you. History tells us that Swan’s Islanders in the 1880s were among the first herring fishermen to adapt nets to use as purse seines to catch schools of herring. Or that Clarence Howard of Eagle Island in the 1940s rigged the differential and axle of an old pick up truck to his marine engine to develop an early lobster pot hauler. Or that boat builders on Beals Island have been in the forefront of evolving lobster boat design for over a century.

Nor should it be a surprise that the trend continues. Two and a half years ago in the fall of 2008. as the financial crisis gathered steam, the bottom dropped out of the lobster market almost overnight. Lobsters that had been selling for between $4 and $5 per pound were suddenly worth only $2 per pound. In the midst of this market meltdown, the Governor appointed a lobster task force (on which I participated). The task force met for nine months, collected and analyzed lots of market information, and ultimately recommended that the lobster industry—processors, dealers and fishermen—create a new public-private organization for marketing and branding Maine lobsters modeled on the wildly successful Alaska Seafood Marketing Institute, in order to capture more value in the lobster commodity chain.

The recommendation unraveled after it became apparent that a marketing fund based on something like a five-cent per-pound levy on the volume of lobster landings strained the ancient tensions between fishermen and dealers and fishermen and processors. End of story? Not quite, because a couple of innovators have stepped into the breach—one from outside the industry, one from inside.

The most prominent is Linda Bean who has invested millions of dollars of her L.L. Bean heritage into “Linda Bean’s Perfect Maine Lobster Company,” a vertically integrated chain of bait, fuel and wharf-side buying stations, along with a new processing facility in Rockland to produce wholesale products, as well as a handful of retail lobster cafes in Maine, Florida and the Virgin Islands. The company has quickly grown from processing 400,000 pounds to 2 million pounds and expects to double production to 4 million pounds this year. When Bean snagged the WalMart account for her branded bag of lobster claws, no one in the business could say she was not a player. And oh, yes, did we mention that Bean has bankrolled the effort to certify that the Maine lobster industry lands sustainably-caught seafood through the Marine Stewardship Council? When a deeply conservative Republican ex-politician is leading a green branding campaign in Maine, you know the world has changed.

Meanwhile in Casco Bay, a group of 39 members of an island-based lobsterman’s coop has launched its own vertically integrated lobster company, Calendar Islands Maine Lobster. The company’s CEO, John Jordan, a Chebeague lobsterman, attended most of the lobster task force meetings in 2008-09 agreed with the central lesson delivered by the food industry consultants who advised the task force. The best way for Maine’s lobster industry to capture more value for fisherman, dealer and processor, they said, is to invest in value-added products. The fishermen behind Calendar Islands Maine Lobster capitalized their new business by working with a group of investors to develop and market a line of eight new branded lobster products including lobster mac and cheese, lobster pizza and lobster tails. The Island Institute’s Island and Coastal Innovation Fund is a five percent owner in the company, the remainder of the investment comes from Chebeague Island residents and their extended community. The company just launched its products at a fancy food show in Los Angeles in January and will market in New England.

John Jordan developed the idea for branding Maine lobster around the same time that the groundfishermen and shrimpers in Port Clyde came together to create Port Clyde Fresh Catch. This winter, Port Clyde Fresh Catch, which has created 25 new jobs, is selling shrimp through contracts with local food distributors, schools and buying cooperatives around the New England region, and are considering adding a night shift to keep up with demand.

Port Clyde fishermen are still struggling to adapt to the new groundfishing regulations implemented by New England’s new “sectors” as part of NOAA’s national “catch share” quota based fisheries management system. Catch shares are under attack legally and politically in Massachusetts and California (yes, new lawsuits have been filed). But Maine-based sectors, including the Port Clyde sector, appear to have decided to try to adapt to the new regime, which distributes quotas or pounds of fish among sectors to be sold or traded, rather than fight it. Groundfish landings were down in 2010, but prices were up for those groundfish fishermen who have not been squeezed out of the industry. Those who have adapted are squeaking by.

The recent announcement by the chief scientist for the National Marine Fisheries Service that 2010 was the first year in over a century that no fishery in the U.S. was overfished may mark a turning point in fisheries history. If this finding bears out, all the pain that Maine fishermen have experienced during the past two decades of declining catches and increased regulation may begin to pay off in the years ahead as fish populations rebound. Of course, for prices to continue to rise, marketing and branding high quality products from Maine will become ever more important as innovators in the lobster industry have shown.

Philip Conkling is the president of the Island Institute based in Rockland, Maine.

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