The Winding Glass

Massive flu outbreak could have huge economic consequences to seafood

In a couple of our news stories today, I flagged the potential for a swine flu epidemic this fall to be another major blow to travel, foodservice, and by extension the seafood industry.

From our AP story:

 U.S. health officials say swine flu could strike up to 40 percent of Americans over the next two years and as many as several hundred thousand could die if a vaccine campaign and other measures are not successful.

Those estimates from the Centers for Disease Control and Prevention mean about twice the number of people who usually get sick in a normal flu season would be stricken by swine flu. Officials said those projections would drop if a new vaccine is ready and widely available, as U.S. officials expect.

After the attacks on Sept. 11, 2001 - the seafood industry was hit hard as people stopped traveling, and in the lobster industry the bank collapse in the fall of 2008 led to virtually a drying up of many restaurant purchases.  I am worried that a flu epidemic and media coverage of it could end up creating a huge disruption to travel - and consequently another economic blow to the seafood industry.  

None of this is to belittle the human and material cost of the pandemic - its just that along with the public health planning, seafood businesses should also think about how their own day to day business may be affected by a massive flu outbreak. 

Gloucester Industry faces stark choice in approach to future at demonstration tonight

here is another in our series of editorials about the fishing crisis in Gloucester.  In a nutshell, they are fighting the last war, and putting the New England industry at risk.  This appeared on our paid news site yesterday. SEAFOOD.COM NEWS by John Sackton - [Editorial Comment] July 8, 2009 - The recent developments in the New England Fishing industry have struck a nerve in Gloucester, and the entire community is mobilizing to respond.  Gloucester, long one of the centers of the New England Fishing industry along with New Bedford, has faced stepped up enforcement, more reductions in days at sea and fishing time, the threatened temporary closure of the fish auction for violations, and now a wholesale change in fisheries management to a system of catch shares. It is no wonder the community feels under siege. But the industry faces a stark choice tonight, and it is time to put forward a positive vision of the future the industry wants. Most of the outrage over this situation has been directed at the wrong targets. The Gloucester Times is incensed that NOAA chief Lubchenco has a prior association with the Pew Foundation, mentioning it in every story they write. They have gone on to suggest that the money being spent by environmentalists is to support the oil industry, since the original funding for the Pew foundation came from an oil company. Yet they never suggest that because Gloucester got a large cash payment for an offshore natural gas terminal as part of $10 million spent in Gloucester by a Texas energy giant, that their own views are compromised by the oil industry. They have also seized on a statement from one of the Environmental Defense funds executives touting the investment potential (up to 400% return) in buying up quota shares. Anyone who believes this should have invested in Bear Sterns. It is nonsense. Actual markets for quota shares in Alaska trade at five to seven times the per lb. value of the catch, well within the normal range of returns for a large number of investments. So while Gloucester is tilting at windmills, such as Pew and Environmental Defense and Lubchenco's past associations, the real issues of catch shares are not even on the radar. The issue is whether catch shares end up concentrating the fishery in a few corporate hands so that crews become employees, as has happened in the offshore clam fishery, or if catch shares are implemented in a way that keeps fishing vessels in local communities, provides for orderly retirement and income for boat owners, and provides an avenue for new entrants, i.e. crew, to become captains and run and own their own vessels. One of the key tests for this is whether there are owner-on-board requirements for the new catch shares. Owner-on-board requirements make it impossible for outside investors to become more than minority partners in the various fishing enterprises. It certainly is one way to protect local communities. Owner on board requirements also force environmental groups to partner with fishermen, not dictate to them.  Yet there is a downside, which is for those who are currently leasing and want to sell their shares, the owner on board requirement reduces their value because there is a more limited universe of buyers. This should not be an issue if the goal is to retain the present decentralized nature of the fishery.  Another important consideration in catch shares is the percent of total quota that can be held by any single company or individual. It is true that some New England companies see catch shares as a bonanza, because they will be in a position to buy up significant amounts and control a portion of the total catch. Once this happens, catch shares are aggregated on to a few boats, drastically reducing the size of the fleet. In the Alaska crab fishery, the fleet went from around 280 vessels to 80 operating vessels virtually overnight.  If Gloucester is concerned about concentration, they should advocate for a strict limit in both species quota and total quota to be held or used by any individual share holder or sector.  The catch share system is not a straight jacket, but rather a different way of managing fisheries. The environmental community is rapidly learning to navigate in this new environment, while Gloucester continues to fight old battles. Hopefully tonight, someone will stand up and tell the crowd that there are ways to achieve a healthy fishery in the community by insisting on certain rights under catch shares - but unfortunately it is more likely we will hear more of the vilification of NMFS, the government, environmentalists and Pew, without anyone putting forward a positive vision of how to retain a healthy fishery in Gloucester in the face of changing times. Given the speed of the changes going on in New England, not putting forward a positive vision could be fatal. Gloucester is fighting the last war. History has not been kind to those who make this mistake.

Greenpeace freaks out at Trader Joe's 'We simply listen to our customers' approach

(this appeared on the Seafoodnews.com website on Monday) SEAFOOD.COM NEWS by John Sackton - July 6, 2009 - Trader Joe's has had one of the best run and innovative seafood programs for many years. They have pioneered a custom-pack frozen display that consistently offers a variety of frozen fillets and steaks - often featuring products like Alaskan cod and salmon, as well as other items like snapper, mahi mahi, and frozen shrimp. True to its philosophy of buying when deals are available, Trader Joe's does not attempt to consistently keep certain species in stock, but rotates through a range of seafood items. The variety makes their frozen seafood case a good stop for heavy seafood users, and because of its emphasis on frozen and frozen at sea product, it is unique among retailers. Most other banners emphasize their fresh fish counters or tray pack fresh items. What has flipped out Greenpeace is that Trader Joe's has refused to engage with them over their seafood purchases. In correspondence dated March 11, 2008 (which Greenpeace says is the most recent and only time Trader Joe's management deigned to discuss the issue of seafood sustainability with Greenpeace), Jon Basalone, Senior Vice President of Marketing for Trader Joe's, stated "We simply listen to our customers", when refusing to participate in Greenpeace's survey of American retailers.  This attitude has provoked fury. First, Greenpeace has built a web site, called Traitor Joe's, to argue that the company is a poor environmental steward. What Greenpeace cannot abide is that for most customers, Trader Joe's has a strong environmental approach that includes copious labeling and lots of organics. Greenpeace says of Trader Joe's customer first approach "This view is antithetical to the basic tenets of Corporate Social Responsibility - to take social, environmental, and political concerns into account when doing business - and runs counter to consumer preference and marketing trends toward sustainable products." In otherwords, unless Trader Joe's buys into the social, environmental, and political concerns of Greenpeace USA, the company is an outlaw. Greenpeace has a nice little skull and cross bones icon on their Traitor Joe web site. The problem for Greenpeace is not that Trader Joe's might in fact be making a strong statement about corporate responsibility, but that they are not doing it according to Greenpeace's rules. Greenpeace says that their surveys found Trader Joe's sells 15 of the 22 red list seafoods: Alaskan pollock, Atlantic cod, Atlantic salmon, Atlantic sea scallops, Chilean sea bass, Greenland halibut, monkfish, ocean quahog, orange roughy, red snapper, redfish, South Atlantic albacore tuna, swordfish, tropical shrimp and yellowfin tuna. What Greenpeace did not find out was how the Trader Joe purchasing model of taking advantage of seasonal opportunities for good seafood when available, is in fact very compatible with sourcing wild products whose abundance and seasonality fluctuates. The most destructive purchasing practices for seafood are when companies seek to have certain items at any price - for in this way buyers distort the market and drive demand for illegal fishing, assuming that they must have a product to please their customers, even if it is in short supply and at a high price. This had lead to abuses for illegal supplies find a ready market. More flexible policies, such as providing the customer with a variety of available frozen fish that changes depending on what is in season, what is packed, and how it is priced, is a much more long term sustainable policy than purchasing from a fixed list of items no matter if these items are red or green. Trader Joe's should take Greenpeace's anger as a badge of honor. It is obvious that seafood is an important part of their vision of customer satisfaction, and that is a long term benefit to the entire seafood industry.