Report: Lobster industry needs cohesion

Posted June 25, 2009, at 9:10 p.m.

ELLSWORTH, Maine — A “vast rivalry” within the industry, fragmentation among its support organizations, and insufficiencies in distribution and marketing all are among issues that need to be addressed to make Maine’s lobster industry more economically sustainable, according to a consultant group’s report.

A task force established last fall by Gov. John Baldacci to plan ahead for the industry’s future will consider these issues and the report’s recommendations when it meets July 1 in Hallowell. The report was issued June 8 by The Moseley Group, which the state hired in February to assist the task force in developing a strategic plan for Maine’s iconic $235 million lobster fishing industry.

Ron Philips, president of Wiscasset-based Coastal Enterprises Inc. and chairman of the task force, said Thursday that how to significantly boost promotion of the state’s signature seafood product likely will be the top recommendation from the task force when it meets next week.

“There has to be some renewed investment in how the Maine industry is marketed,” he said.

This likely will cost money, according to Philips. He said that, during its deliberations so far, the task force has considered what other states and marketing organizations have done for other seafood fisheries around the world.

According to task force members, the Alaska Seafood Council, which has a budget of $18 million to $20 million, has been considered a model by the task force. By contrast, the Maine Lobster Promotion Council has an annual budget of $400,000. Whatever additional money might be invested in marketing could result in higher financial returns down the road, task force members said.

Philips said that considering the state of the economy, such a marketing boost might not be easy to come by right away.

“How that happens will be a challenge,” he said.

The Moseley Group report indicates that greater cohesion within the industry and within its research and marketing support network would enhance the effectiveness of any renewed marketing efforts.

“But this opportunity is hindered by the vast rivalry among [the industry’s] constituents, caused by current market forces,” the consultants write in the report’s executive summary. “As these forces squeeze profitability out of the industry, constituents become rivalrous in seeking to maintain their slice of the pie.”

For example, many harvesters believe dealers work together to artificially set prices fishermen get for their catch, while there is little understanding in general that dealers serve as the industry’s marketing arm, according to the report.

Dana Dow, a task force member and former state senator, said Thursday he thinks “rivalry” is too strong a term. He said the differences that exist among fishermen, dealers and processors are more a result of a lack of familiarity with each other’s businesses.

“I don’t think they understand how each other work,” Dow said. “The rivalries that exist are with other products. We’ve got to do a better job of marketing ours.”

He said that, with better overall understanding of the supply and marketing chain, he thinks there can be better cohesion within the industry. He also said that better indoor lobster storage facilities in Maine could help make the supply of lobster coming out of the state more consistent year round, and reduce the effect of the sup-ply glut that accompanies the busy lobstering season each fall.

Dane Somers, a task force member and executive director of the Maine Lobster Promotion Council, said Thursday that all levels of the industry need to have a better understanding of what the end customers want and to work together better to provide it. Restaurants want better consistency in supply and pricing, he said, while consumer demands are always evolving. Being responsive to those needs, he said, will add value to the industry.

“We could do a lot more,” Somers said. “When you work together, good things happen.”

Maine’s multiple research and marketing organizations may not have the same kind of rivalries, but they compete for limited funding and overlap in their efforts, according to the report.

“The industry stands to realize greater profits with all the constituents pulling in the same direction,” the consultants wrote. “Where possible, we recommend the consolidation of these entities into a single organization called the Maine Lobster Institute that would manage and direct research and marketing efforts for the entire Maine lobster industry.”

The report also calls for improved handling methods to reduce the amount of lobster that has to be discarded after it is harvested but before it reaches consumers. As much as 20 percent of harvested lobsters have to be discarded during the distribution process, which can result in as much as $50 million in industry losses, the re-port indicates.

The task force meeting will be held from 1 to 3 p.m. Wednesday, July 1, at the Natural Resources Service Center at 6 Beech St. in Hallowell, according to information posted on the Maine Department of Marine Resources Web site.

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