Seafood rides the wave of sales increases during the pandemic


Seafood rides the wave of sales increases during the pandemic
Walker Seafood Australia owners Pavo and Heidi Walker with a whole Yellowfin Tuna being hauled off their boat in Mooloolaba. Photo: Paul Harris

By Bianca Nogrady

“My customers in the US were sending me messages saying ‘do not send us more fish’ and ‘we can’t take any more fish, we’re going into lockdown’,” says the co-owner of the Queensland-based tuna company Walker Seafoods. “We had five boats at sea, all catching fish, so I knew we had to do something because I had a lot of fish coming in and at this point there was no opportunity to send fish anywhere.”

The COVID-19 axe fell overnight and it was terrifying, Heidi Walker says. But rather than panic, the company threw themselves into finding a solution.

Local markets

The first thing Walker Seafoods did was set up a pop-up shop outside their factory in Mooloolaba. It attracted the attention of local media and soon was flooded by locals wanting to get their hands on – and teeth into – the kind of premium produce that is normally only sold into exclusive export markets, such as the US and Japan, and high-end restaurants in Asia and Australia.

Their second move was to contact Coles supermarkets, with the help of John Susman from seafood agency Fishtales. Within a week and a half, they had worked out a deal to get Walker’s Yellowfin Tuna into 150 of Coles’ stores. It sold out within hours and more deliveries are now on their way.

“We realised we were onto something good,” Heidi Walker says, of the new market opportunity, which the company plans to continue in the longer-term.

Walker Seafoods may be one of the rare good-news stories of the COVID-19 pandemic. But amongst all the devastation caused by the pandemic and its associated shutdown of export markets, hospitality and tourism, businesses are doing what they can to adapt.

Fisher Bryan Denny from Ocean Blue Diving in Tasmania runs a small two-pronged operation harvesting Abalone and Periwinkles, and has found this diversification has really helped see him through so far.

When his Abalone business stopped in January, as China closed its borders, he was still able to fish for Periwinkles that he supplies to a west Sydney restaurant.

Then, as the restaurant also had to close later in March, China began opening up, so he switched back to the Abalone business.

The Northern Territory seafood industry, many others, has been impacted by the loss of the hospitality market, as restaurants in its towns and cities closed and Lunar New Year events – traditionally a boom time for fishers – were called off.  

“Some fishers have stopped fishing because they physically can’t move the volume they need to,” says Katherine Winchester, CEO of the Northern Territory Seafood Council. Others are taking advantage of the downtime to do repairs or engage in some business reflection, but “that obviously can’t go on forever”, she says.

Some are trying to move product within the local community, either direct to consumers or through existing retailers. Local retailers, in particular, have been offering their support to help fishers to sell their wares.

Others are making the move from fresh product to frozen, selling both direct to consumers and through existing retail channels.

Several fisheries in the Northern Territory already had good links with supermarkets, which Katherine Winchester says has been “a real lifeline”.

“Businesses are looking for ways to diversify and find new markets, essentially to try and create some movement rather than just opting for storage and waiting till things open up again,” she says.

Freezer conversion

Taroona Pty Ltd & Mackerel Online is one company taking this approach. It operates in the Spanish Mackerel troll line fishery off Darwin and has two boats – one supplying fresh fish and the other fitted with freezers to supply frozen product. Ordinarily the business sells into the pubs and restaurants of Melbourne, but since the pandemic both demand and price have plummeted.

As a result, the company made the expensive decision to put a freezer and cryovac facility on its ‘fresh’ boat and to focus on smaller packs.

It built a freezer outside its shopfront in Darwin, put solar panels on the roof to run it, and opened up a new virtual shop called Mackerel Online.

All up, owner Norm Hedditch reckons he has spent $35,000 to $40,000 on the conversion. But he is glad he did it.

“I’m really happy with the way it’s going,” he says. Frozen product now coming off both boats is selling online, through his retail shop, and is also sent to Queensland and Western Australia to supply the fish and chip market. The move to frozen has increased turnover and helped the business turn a profit.

As well as selling his own one and two-kilogram frozen packs of fish, Norm Hedditch is expanding the produce available in his own shop to include local prawns, Barramundi and King Threadfin. He also started a home delivery service, which was going well but has dropped off since the lockdowns started lifting.

The retail shift

The shift from wholesale and hospitality into consumer retail can be a challenging one, and not all are able to make that transition as smoothly, according to Fishtales’ John Susman.

“In some instances they’ve approached it well and in others instances they’ve approached it quite naively in terms of the lack of recognition for what retail channels look and how they operate and what are the demands.”

For example, a fisher who is used to having a five-minute transaction with a chef for an order in the hundreds of kilograms might find it a very different experience to deal with the questions of a home cook ordering two fillets for dinner that night.

“You need to have recognised levels of food safety plans, of record-keeping from wharf to store, and you may need to have services of a third party to assist in processing and distribution,” John Susman says. It also means changing packaging – for example, from one kilogram of crab to 100 grams – and complying with consumer labelling requirements.

But the upheaval of the COVID-19 pandemic can also provide opportunity, both for fishers and retailers, says Heidi Walker.

“Increase your consumption of Australian seafood, and now’s the time to do it because the price has never been better,” she says.

Fast-moving marketing

It is certainly a message that Australian prawn producers are keen to get out there. Immediately after COVID-19 shut everything down, the collective of prawn producers behind the Love Australian Prawns campaign held an emergency meeting to see how they could salvage the situation.

“We did a quick-turnaround social campaign to encourage people to go to the seafood department of their supermarket and ask for a box of frozen prawns,” says Ben Hale from digital marketing agency Adpower, which came up with the Love Australian Prawns campaign. That was just the first step in what has been a nimble and fast-adapting social media campaign making the most of changing consumer behaviour during the pandemic.

The campaign crafted posts to take advantage of consumers making their own meals while working from home and the rise in home baking. As the lockdown stretched out, the campaign encouraged consumers to try complex and diverse cuisines from India and Thailand.

“Over six to eight weeks we managed to create as much consumer engagement as we did over the entire summer,” Ben Hale says.

Not everyone can pivot their business model so quickly. Oysters are one industry that has taken a significant hit from COVID-19, with John Susman estimating the industry is down by 60 to 70 per cent. The challenge is that oysters are largely seen as a premium product that is enjoyed in restaurants, not at home.

“The industry hasn’t done a huge amount of work in terms of teaching consumers how to enjoy oysters at home on a Saturday night,” he says. But producers are adapting and some brands have been working on significant public campaigns over the past couple of months to try to change that.

Despite the challenges of COVID-19, John Susman believes things could change for the better for Australian fishers, retailers and consumers. However, “the domestic market still needs to be encouraged”, he says. “My fear is that the producers themselves, as soon as international markets reopen, will forget about the domestic market because they’ll think it’s just too much work.”

The true impact of COVID-19 is still unfolding and ly will be for some time, says Katherine Winchester. Some fishers are already starting to open up their businesses – for example, mud crabbers
are looking to get back out and fishing in the coming days, despite the lack of airfreight.

While restaurants and cafes have reopened around the country, the restrictions on customer numbers may mean reopening is not an economic prospect for some. Despite this, Katherine Winchester says she is feeling quite optimistic about the future – of the Northern Territory seafood industry at least.

“A lot is yet to unfold for us,” she says. “We’re looking to boost that confidence wherever we can and making sure we can adapt and come this as strong as possible.”

Photo captions (from top right):

Walker Seafoods' pop-up shop outside their factory in Mooloolaba. Photo: Walker Seafood.

Companies such as Taroona are finding new markets in order to keep trading. Photos: Taroona Fish and Mackerel Online.


California lobster fishermen ride high-price wave from China

Seafood rides the wave of sales increases during the pandemic

Santa Barbara, California, the United States — On a recent winter’s evening in Santa Barbara Harbor, seafood distributors Gabriel Sosa and Tony Escalante lifted large containers crawling with California spiny lobsters off of the boats of local fishermen and onto a wharf to be weighed before placing them into large, water-filled containers in the back of a white truck.

At the end of the night’s work, Sosa estimated the truck contained around 1,360kg (3,000 pounds) of the crustaceans, which lack the iconic claws of their New England counterparts but are prized for the sweetness of their meat.

Since it became home to California’s first lobster fishery in the early 1870s, the coastal city of Santa Barbara has established a long and proud history of lobster fishing. The industry is now experiencing a surge in demand because of a trade war between nations that are thousands of miles across the Pacific Ocean.

Almost all of the lobsters caught in the waters off of Santa Barbara’s coast this season will end up in China, where an ongoing dispute with Australia has worked to the advantage of California’s lobster fishing community. The surge in demand from Chinese markets has resulted in high prices that fishermen and distributors here say are without precedent, as well as plenty of uncertainty.

“The most I’ve paid for lobster in my 20 years as a distributor is $25 a pound,” Sosa told Al Jazeera. “This year, we’ve seen it go as high as $40.”

Volatile prices

The economic interconnection between California’s lobster fishermen and markets in China, where the spiny crustaceans are popular with the country’s growing middle class as a symbol of status and good fortune, comes as a double-edged sword.

A 2016 study by researchers at the University of California San Diego estimated that over 95 percent of California’s annual lobster production ends up in Chinese markets. That means that varying levels of demand and market access can produce price volatility at home in California.

“Last Thursday, we were buying for $33 a pound. But then I got a call that some markets were closing down in China again because of the [coronavirus] pandemic, and they dropped to $23 the next day,” Sosa said. “The price changes all the time.”

Seafood distributor Gabriel Sosa shows off a recent haul of California spiny lobsters destined for export to China, where they are considered a delicacy [Brian Osgood/Al Jazeera]Even without variables in China to consider, lobster fishing is a business defined by its unpredictability, with factors ocean temperatures and atmospheric conditions affecting a fisherman’s daily prospects.

California’s lobster season runs from October through March, and prices typically start low and end high, since the majority of the year’s annual haul is caught in the first half of the season, causing supply to drop and prices to rise as the season continues.

In 2018, not an exceptional year itself, Santa Barbara Harbor saw close to 124,738kg (275,000 pounds) of lobster deposited on its docks, bringing in a total value of over $4.5m. In 2019, despite nearly identical poundage, that value shrunk to just over $3.8m.

During the last two months of the season, when prices would typically be ending high, data from the California Department of Fish and Wildlife show that the average price of lobster unloaded in Santa Barbara and surrounding ports sunk below $10 a pound.

Hit hard by COVID-19

But even for an industry accustomed to volatility, the last two seasons have seen incredible price swings. Owing in large part to varying levels of access to Chinese markets, fishermen and distributors say prices have gone as low as $8 per pound and as high as $40.

In the 2019-2020 season, a trade war between the United States and China early on was followed by market closures both at home and abroad due to the COVID-19 pandemic.

Since prices fluctuate on a regular basis, fishermen caution against overreliance on price averages.

But many confirm that as the COVID-19 closures started to be felt more acutely first in China and later in the US, prices dropped as low as $8 to $10 a pound, the lowest level in years.

Seafood distributor Tony Escalante (left) stands with a fisherman as he rounds up the day’s haul of California spiny lobsters [Brian Osgood/Al Jazeera]“The American seafood industry is primarily dependent on two things: international trade and restaurant sales,” Easton White, a researcher who co-authored a study on the effects of the COVID-19 crisis on the American seafood industry, told Al Jazeera. “You couldn’t ask for two areas more seriously impacted by the pandemic and the resulting closures.”

During lockdowns, consumer demand for seafood from US restaurants dropped by as much as 70 percent, the study found.

At the same time, US seafood exports to China also plummeted — falling by 44 percent in February 2020 compared to February 2019, the nonpartisan Congressional Research Center found, and the export of fresh seafood including lobster “nearly stopped.”

Roaring back

If the US-China trade war and COVID-19 pandemic restricted access to Chinese markets and sent prices into a nose dive last season, this year has been just the opposite. Locked in a trade dispute with Australia that has barred Australian lobster from Chinese markets, China has seen demand for California’s lobster supply skyrocket, and prices have jumped to unprecedented levels.

“We’ve seen prices go above $40 a pound for lobster,” Chris Voss, president of the Commercial Fishermen of Santa Barbara, told Al Jazeera. “That isn’t just good, it’s beyond anything I’ve seen in all my years as a fisherman.”

Before the season opened in October, seafood business outlet Undercurrent News reported that many in the lobster fishing community were worried that the 2020-2021 season would be defined by more low prices.

But in the month of December, with Australia and China locked in political disputes and Australian lobster locked Chinese markets, the monthly average price of California spiny lobster jumped to over $33 a pound in the Santa Barbara area.

Fishermen and seafood distributors in Santa Barbara Harbor in California have seen a windfall recently thanks to high prices for one of their main catches, California spiny lobster [Brian Osgood/Al Jazeera]Nevertheless, Voss said that fishermen are realistic about the fact that the prices won’t stay sky-high forever.

“Smart fishermen put away money in the good times so they can weather the bad times,” he explained. “This is an expensive industry, and there are a lot of ups and downs. The one thing we know for sure is that the good times don’t last forever.”

A silver lining to the volatility seems to be that the floor is higher than it was previously, in large part due to the vast Chinese demand supplanting that of domestic consumers as the primary market for  California spiny lobster.

“Chinese consumers are generally willing to pay higher prices for lobster than Californians are,” Theresa Talley, a researcher at California Sea Grant based at the University of California San Diego, told Al Jazeera. “So the incentives are to export.”

Because of the early effects of the pandemic on international trade, White said his research found that American fishermen turned to selling more of their products through local ventures fishermen’s markets and direct-to-consumer services.

“Some of those developments might remain in place after the pandemic,” White said. “But America is a top importer and exporter of seafood. It’s a very international business.”

Voss echoes that sentiment.

“I’m a big believer in buying and selling locally,” he said. “But it doesn’t make a whole lot of sense economically not to sell to the highest bidder.”

Source: Al Jazeera


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