New Approaches Benefit Maine’s Lobster Co-ops

The coast of Maine is dotted with fishing cooperatives. They may be in small harbors with just ten or twenty members, or larger businesses with 80-plus fishermen involved. Each is run by its members, for its members, yet each approaches the task slightly differently. Landings continues its series examining how Maine’s fishing cooperatives operate and how they are coping with a constantly shifting economic and environmental landscape.

It’s a familiar picture: a fleet of lobster boats offloading the day’s catch at their co-op’s dock, the crew hoisting crates into a waiting truck, the boats baiting up for the next day’s fishing. Maine’s fishermen’s co-ops have chugged along in the same fashion for decades, providing their members with a modest but reliable dividend at year’s end.
That began to change in the last decade. As Maine’s lobster landings skyrocketed during an unstable world economy, Maine lobster dealers scrambled to expand markets and lobstermen saw the price tank in 2008 and 2012 as the industry grappled with unprecedented market dynamics. The board of directors of many co-ops realized that something had to change if the businesses were to survive increasing volume and sharp swings in the price paid for their lobsters.

The Cranberry Isles Fishermen’s co-op retail store more than paid for itself in its first year of operation. CIFC photo.

“The price got so low in 2012,” recalled Marc Nighman, general manager of the Cranberry Isles Fishermen’s Co-op on Islesford. “Bruce Fernald, Dave Thomas and I knew we had to do something.” That something was to develop a clear brand for the lobsters landed at the co-op, to make sure that their lobsters were of the highest quality, and to offer lobsters for sale to the general public. “We came up with the brand and logo for Little Lobster Company, which is within the co-op,” Nighman explained. “And we opened up a little retail store to increase our live lobster sales.” Islesford has a population of approximately 65 people during the winter but in the summer it hosts a lot of summer residents, tourists and passing yachts. For as long as the co-op has existed, its dock was solely for member lobstermen to bring in their catch and get bait and fuel. “It was a working dock. Retail wasn’t our thing,” Nighman said. But the members recognized that there were customers ready and waiting for them. The co-op converted a building on the dock into a small store, installed a live tank, hired staff, and began selling lobsters and gift items of interest to tourists. In the first year of operation the store made $50,000 in revenue, adding 3 cents to each member’s dividend, according to Nighman. “Now it’s more of a grocery store. We might start adding lobster rolls and so forth,” Nighman said.
Little Lobster Company also began selling its lobsters to customers via the Internet. The summer residents and visitors were aware of the quality of lobsters landed at the co-op so selling live lobsters online wasn’t difficult. “We have summer people here from all over and they want our lobsters,” Nighman said. Someone else, it turns out, also wanted lobsters from Little Lobster Company:  Whole Foods.
The giant natural foods company has strict standards for its food items. In 2006 it declared that it would not sell any live lobsters, only frozen lobster meat. That meat had to come from companies that met the Whole Foods’ strict handling and processing standards.
This spring Little Lobster Company will start selling frozen lobster tails through Whole Foods. The lobster will be processed by Cape Seafood in Saco, which holds a contract with Whole Foods.
“Our lobstermen have been doing things right for a long time. So we were Whole Foods-compliant already,” Nighman said. Co-op members all have a live tank on their boats to store their lobsters while fishing. The lobsters are handled carefully when they get to the dock, following the “one hand, one lobster” practice. No more than five crates of lobsters are allowed on the dock at a time. If five crates fill up, work stops until those crates are in the water. No more than 24 hours passes from the time the lobster comes off the boat until it reaches Cape Seafood. The co-op even has its own 35-foot boat which it uses to take up to 100 crates of lobsters to the mainland. “It doesn’t really slow things down on the dock,” Nighman said, referring to the co-op’s procedures. “We can get five boats in at a time at our five buying stations so everyone is within three feet of the water. And the lobstermen understand the benefit [of being Whole Foods-compliant]. We’ve got a good group of lobstermen here. And we did it all ourselves.”
On Vinalhaven, the Vinalhaven Fishermen’s Co-op is doing more than increasing the price paid for its members’ lobsters — it’s helping the lobstermen become better businessmen.  

Co-op manager Emily Lane at the Vinalhaven Fishermen’s Co-op in Vinalhaven, Maine.

“We wanted to give members an idea of alternatives for saving money,” said Emily Lane, the co-op’s administrative manager. She invited financial advisors from Camden National Bank and Davidson Associates to make presentations to Vinalhaven lobstermen about planning for the future, financial investments and other business-related topics. “The workshops were aimed at young lobstermen who don’t think of themselves as businessmen, just as lobstermen,” she said.
Lobstermen learned about a Capital Construction Fund, for example, which allows fishermen to write off money they contribute to the fund each year on their taxes. When a fishing year is good, a Capital Construction Fund is one way to shelter money from the IRS. The money in the fund can only be used, however, to cover the costs for a new boat or a new engine.
The Vinalhaven Fishermen’s Co-op also does something that old-fashioned Firemen’s Insurance companies once did:  it puts money aside for each member in case of emergency or for retirement. “Tom Johanson set it up first in 2008,” Lane said, referring to the co-op’s late board member. “It’s called a Certificate of Value.” Each year the co-op divides the net profit from the co-op’s gas station and retail lobster sales by the total number of pounds landed in the year. That figure is then multiplied by the number of pounds landed by each member and the sum is put into the member’s Certificate of Value. If the member becomes ill, decides to retire, or dies, the money is paid to the person or to his or her estate. “It’s a pot of money set aside and in addition to the yearly dividend,” Lane added. The co-op currently has 107 members, of which approximately 70 are active. Should they all retire at once, Lane laughs, the co-op might be in trouble but she doesn’t worry that such an event will happen.  

A co-op of scallop farmers was organized in 2016. MAC photo

Not all co-operatives in the state are solely devoted to lobsters. The new Maine Aquaculture Cooperative, formed in late 2016, is designed to offer its members, some of whom are lobstermen, economic savings. Merritt Carey, a board member of the Tenants Harbor Fisherman’s Co-op, helped organize the initiative. “The co-op is not acting like a lobster co-operative. It doesn’t have a geographic location,” she explained. Instead, the co-op is a collection of fishermen interested in scallop aquaculture who want to share information and equipment and to have the clout that an organized group can have when it comes to negotiating price for their product. Currently the Maine Aquaculture Co-op has ten members, from Stonington to Tenants Harbor, who have aquaculture leases from the Department of Marine Resources to grow scallops.  
“It all came about when C.E.I. [Coastal Enterprises Inc.] came to Tenants Harbor in 2016 looking for lobstermen to help collect scallop spat,” Carey said. “They also wanted fishermen to test scallop growing equipment from Japan. Well, that got us interested.” She and a few local fishermen talked to other fishermen about scallop aquaculture and the notion of forming a co-operative. “They got the concept of a co-op really fast. This is the right model for aquaculture because you are not out there by yourself risking everything.” Farm-raised scallops are gaining attention among seafood companies because they, unlike the wild version, can be landed with the shell on, adding value to the final product.
Fishermen’s co-operatives have been a mainstay on the coast of Maine since 1947, when a group of Pemaquid fishermen first decided to band together for their mutual benefit. Today’s co-ops are sailing into different waters in order to maximize their value to their members and the communities that depend on them.