Lobstermen must decide: will investing in marketing bring better boat price?

First published in the MLA Newsletter, June, 2012.

This winter, the state’s Lobster Advisory Council (LAC) created a subcommittee to investigate better methods for marketing Maine lobster. The subcommittee, chaired by LAC chair Bob Baines and the Maine Lobstermen’s Association education coordinator Annie Tselikis, hired John Sauve, former director of the Wild Blueberry Association of North America and current president of The Food and Wellness Group, a marketing firm in Portland, to do just that. The result is Project Maine Lobster.

The subcommittee’s plan will be presented in public meetings this June at four locations along the coast. The plan offers specific, concrete actions that lobstermen, processors and the state can take during the next three years to improve recognition of Maine lobster in domestic and global markets and thus build demand for the state’s most abundant marine species.

As Sauve said at a May LAC meeting, “There aren’t many people out there happy with the boat price.” To make that price rise, he continued, one could either limit the supply of lobsters (more than 100 million pounds landed last year with a comparable volume predicted for this year) or boost consumer demand. A drop in lobster landings is not likely in the near future, barring unforeseen events, so the emphasis should be placed on building global demand for lobster harvested in Maine. “It’s not an issue of over-supply,” Sauve emphasized, “it’s an issue of under-demand. If you have 100 million pounds of lobster, you want to be 20 million short of the demand.”

Project Maine Lobster Meeting Dates

June 12, 6-9 p.m., The Log Cabin, 196 Main St., Yarmouth.
June 14, 6-9 p.m., Rockland High School Auditorium, 400 Broadway St., Rockland.
June 18, 6-9 p.m., University of Maine Machias, Science room 102, Machias.
June 19, 6-9 p.m., Ellsworth High School Cafeteria, 299 State St., Ellsworth.

Project Maine Lobster is organized into three phases that will identify, develop and initiate projects to be implemented over a three-year period. The cost: $3 million, 75 percent of which will come from lobstermen, 25 percent of which from dealers. The split in cost between dealers and lobstermen is the same percentage now used to fund the Maine Lobster Promotion Council. Under the plan the Promotion Council would be phased out and replaced by a new entity, the Maine Lobster Global Marketing Council.

First among these efforts is to create a brand identity for Maine lobster as a differentiated product in the market. Some people consider all Homarus americanus to be the same. But others believe that the environment – the bottom characteristics, water temperature, currents – influence the flavor of the lobster. Therefore lobster from Maine is, in fact, different than lobster from Massachusetts or Nova Scotia, despite being the same species.

Crafting that brand recognition will take time yet as Sauve noted, the name ‘Maine’ carries some weight right now. “But competition for the center of the plate is getting stronger all the time. Other proteins are edging in,” he said. So getting consumers to recognize the value of Maine lobster, as they do Alaskan salmon or Chesapeake Bay oysters, is critical. Once demand for the product has increased, it will put pressure on supply. “With enough pressure you will feel it all the way down to the boat price,” Sauve emphasized.

Project Maine Lobster also will focus on promotional activities in the United States and overseas markets and on a new organizational structure to oversee those efforts.

Sauve pointed out that in most other commodity sectors, there is an entity that moves into new areas prior to the actual businesses entering to, as he put it, “soften them up.” Organizations such as the Wild Blueberry Institute or the the Cranberry Institute have the responsibility of marketing and promoting their specific commodity in markets where that commodity previously had been unknown. “That marketing component is absent in this industry,” said Sauve. “There is not anywhere near enough happening to boost generic demand for Maine lobster.” The task of the new Maine Lobster Global Marketing Council will be to do that work.

Sauve and members of the LAC will be hosting the public meetings throughout the month of June to review with lobstermen the draft plan and gather thoughts on its implementation. If the industry supports the plan, a bill will be crafted to make the required legislative changes. “It’s important that lobstermen attend a meeting to find out about this proposal,” emphasized Baines. “Basically it comes down to this – we need to help ourselves. No one else is going to do it for us.”

Anxiety about the position of Maine’s lobster in the world market has been fueled by actions in Canada. The Lobster Council of Canada, which began operating in 2010, commissioned a report by Gardner Pinfold consultants in 2011 analyzing the lobster industry in Eastern Canada.  A” Long Term Value Strategy for the Canadian Lobster Industry” noted that the financial difficulties faced by Maritime lobstermen were not solely the fault of the global economic downturn. Instead, the Canadian lobster industry is “disorganized and structured to underperform.” As a result, the Lobster Council proposed last fall a penny-a-pound levy, paid for equally by buyers and lobstermen, to support comprehensive marketing initiatives to improve Canadian lobster standing in the world’s marketplace.

“Canada is setting the standard for what is considered a quality lobster,” Baines said. “And they are doing that by investing more time and resources in their product. Maine is playing catch-up.”