seafood production and marketing co-op

Katlian

2010-01-26 21:14:20

A very successful friend of mine once explained the concept of "No Margin, No Mission." He stated that unless everyone in a business proposition is making money, the business will soon fail. I firmly believe the success of all buyers, processors, distributors, retailers is based in a healthy margin. Conflicts arise when parties figure out that their model is based on a giant markup and small volumes. Conversely large volumes to fewer customers and slim margins.

It seems like we have a seafood producers co-op alive and well here in Sitka. From my experience it functions only as a production co-op, not as a marketing co-op The marketing process is not transparent enough for my druthers. I once asked for a price for fish that I could buy back from the co-op in bellingham to see if I could make a dollar and spread the fish around. They declined to offer me a price list, let alone purchase any fish. I asked a non-member to call with the same request and they were instantly furnished with a price and availability sheet. I have experience a few similar roadblocks with being a member of SPC. Non-members can enter into custom processing relationships with SPC, but members seem to be prohibited.

I would hope to see SPC migrate toward being a production and marketing co-op. Encourage members to be ambassadors and vendors of the product that we spend our lives producing. I have heard that the co-op buys 50% of the troll production on the west coast. They currently have two salesmen. I wish there were a third sales position to focus on FAS marketing, niche marketing, developing markets and products, and encouraging members to bring in these markets.

windy in sitka, winter tool sorting and thinking underway.

Carol W

2010-01-26 23:00:15

Ok Karl I don't know if you Eric and others are baiting me or what but I have been asking some of the same questions and I also beleive we need some more transparancy in the coop. I also think we need some more progressive ideas and we as members of SPC need to help staff understand that the price we have been receiving per pound for salmon the last few years is well below what we need to maintain our own businesses profitability. So continue on folks I am watching all 3 of these threads and am preparing to take these messages to the board of directors and the staff.

Keep your hand on it

Tom

Katlian

2010-01-27 00:15:27

ok, One issue at a time: Sales Staff

I have worked quite a bit with sales teams. Like all employees, the challenge is to motivate the sales staff to operate with the large view of the business and its long term goal in mind.

I will sum up some of the concerns I have heard over the last few years. How is the sales staff compensated? Are they compensated based on performance. How is that performance evaluated. While the core of their job is to negotiate with customers to get the highest price, it is also key to sell all of the product before aging depreciates its value. It has been voiced that "The co-op sales staff's job is easier when prices are low." While that is somewhat rhetorical, how can the membership be assured that their motivation is highest return, not ease of sale?

Is it the position of the board that a sales staff of two can effectively reach the expanding markets of SPC products? I know that the many small seafood buyers of the coast "beat the streets" for their new customers. Is the co-op finding new customers or are the legacy european markets comfortable and easy?

I am hoping to be constructive and get some serious question raised. I am a member for the long term and would like to challenge our organization to be it's best.

slr (not KARL)

Salty

2010-01-27 01:50:52

Tom,

I have nothing to do with the above posts. While interesting to me, and I do happen to know the various parties, I am not involved in discussions leading to these posts or, heaven forbid, baiting you, Tom.

I believe SPC is one of the best collaborations in the history of Alaska fisheries. I am proud to be a member, as my father was before me and I hope my son will be after I am gone.

I also think Katlian brings forth good questions and hope he pursues them with Board members.

Carol W

2010-01-27 15:30:46

I was being my usual smart ass self when I made the baiting comment Eric and yes I think Katlian has brought up some good questions and I would encourage him to submit the questions he has asked in an e mail to the Board or a written letter I would enjoy hearing both the staff and board response to the question as to whether our sales staff is big enough. The bonus the entire staff receives is based on the overall performance of the coop and the returns to the members, I know it is not exactly what Katlian is envisioning but it is an incentive. I do believe the sales staff has worked hard and continues to do so and does not make a sale just to make a sale but rather the sales staff is price driven. However the problem is still there in the fact that we are not receiving enough per pound so how do we get there? I have sent an email to the board and staff listing the prices that I think the average troller needs to obtain to be profitable and have asked for a plan to get us there, so we will see what their answers are. The board has also started addressing the issue of FAS and I think most of the board is supportive of a FAS salesman now lets see if that happens.

I do truly believe in the Coop and think that the troll fleet and longline fleet have a very unique tool with the coop and we should all as a fleet capitalize on it, however we all need more in returns and I aim to continue to ask questions, poke and prod to get answers and make sure that our concerns as members are heard.

Keep Your Hand On It

Tom

John Murray

2010-01-27 18:32:08

One of the things members can do to is attend the board meetings.The staff works hard to deliver the right info to the board.The board often has thoughtful discussion.Its the best way to get the scoop on CO-OP matters.One can get part of the story at the dock,bar or coffee shop.But its the filtered story,mixed with dock rumors.Also writing letters to the board is a good way for your imput to be acted on possibly ,at least it has a fair chance of getting discussed by the staff and/or board.Or like Carl kick it around this forum and see what transpires.

squarehead

2010-01-30 01:03:39

Should the FAS guys start their own co-op?

Can SPC give FAS fishermen the sevices they want at a price that will make them happy?

Can a smaller sales focused co-op do more for us?

These questons run through my head every winter but I always come back to the SPC. in the long run it has payed off.

carojae

2010-01-31 06:47:00

What did the price of Coho's settle out at in the co-op? Or has it settled yet.

I haven't sold to them before.

sven

2010-02-03 03:33:15

"we as members of SPC need to help staff understand that the price we have been receiving per pound for salmon the last few years is well below what we need to maintain our own businesses profitability."

I'll give my best approximation for the SPC summer troll season salmon prices (from memory).

King Salmon:

2008: ~$6.50

2009: ~3.00

Average: ~$4.75

Coho Salmon:

2008: ~$2.50

2009: ~$1.40

Average: ~$1.95

Is $4.75 & $1.95 not enough to maintain profitability?

The bottom line is that the consumers are driving the price. Due to the economic climate in 2009 consumers are cutting back on expensive food (even if it is the best tasting and most healthy). The relatively poor 2009 salmon price is a function of consumer spending, not the Co-op's marketing ability. I don't think that the co-op can just raise prices. Don't get me wrong, we've got to keep 'em honest. However we also need to be realistic.

So to maintain our profitability we have a few options: 1) catch more fish, 2) decrease expenses, 3) value add/direct market. All three are easier said than done....But it still beats a day job.

yak2you2

2010-02-03 06:08:19

It's true that processors go out of business as often as fishermen do. Without the ability to see through all the smoke and mirrors, I guess i've always been of the opinion that making to much money off of the backs of fishermen was not a common occurrence with processors. The one thing that I have always faulted the processors with though, is not trying harder to get more out of the product. selling off the pack to the comfortable, lowball markets, just seems to me like the easy way out. When you already have an office and a staff, why not hire a couple more hands to man the phones and peddle at least some of the product out to individual restaurants and specialty markets? The hope would be that maybe some of the high end prices we all see our product moving at could be shared between the processors and the fishermen, and ultimately these moneys mixed in with the pay from the general markets would raise the overall average price. Wholesales and retailers, are a necessary part of the equation, but something has just never added up to me when I see a $2.75 per lb. ex-vessel fish that could be one of mine, selling in a retail chain for $19.95 per lb. To me, the guys after the processor, and before the consumer, have to much unchecked power of the pen.

About once a decade i'll eat food that costs 20 bucks a pound, so it's pretty unrealistic of me to expect anyone to pay anymore than that on a regular basic for seafood, and since most of us aren't happy with the recent ex-vessel prices that some how equate out to 19.95. The only obvious way for fishermen to stay in business is to demand from our processors that they force the middlemen to tighten their belts, by jumping over them to the consumer once in a while, just to keep them honest.

I am currently not a part of SPC, I hope to be someday. but I also feel that it has to become even bigger than that. You'll still have to move the biggest part of you pack through the main supply lines, even if specialty markets are achieved. which means that if there's still a majority of processors pumping out cheap fish, the co-op won't have much choice but to sort of follow suit. It's like selling oranges for a buck a pound, when the guy across the street is selling his for a quarter, where are you going to get yours from? If the guy at a buck wants to stay in business, he'll be lowering his price.The theory behind a co-op, has to somehow become a fleet wide notion for it to have much of a real affect, unless I'm missing something.

Carol W

2010-02-03 16:04:41

Sven I have E mailed the staff with values that I see the troller needs to maintain profitabillity and my coho value was below the your average and my King value was right on with your average. I do know the staff has seen these numbers and I have asked for a plan that will elevate value, I will continue to press this point.

As I said in the other thread one of the things we as members can do is deliver all our production to the coop, I know this sounds like the staff line but think about it. You deliver 5 pounds to the coop then you deliver 5 pounds to a for profit company who has a lot of other fish products. The coop and the for profit company go to safeway to sell that 5 pounds the coop offers the fish at $5 and the for profit company offers their 5 pounds at $4.75 so now in order to sell the 5 pounds the coop needs to lower the price to get the sale. If the coop had the full 10 pounds chances are we could get the $5, at least the chances are improved.

It has been said the coop needs competition on the grounds to keep prices up, the memberships check and balance is the 12 member board who is comprised of Fisherman who all want the most value per pound. And as a board member I will continue to push staff to increase the returns to the membership and to operate our plant at optimum efficiency and as you said under increasing profitabillity we all need more pounds and the coop is included in this.

Keep your hand on it

Tom

salmon4u

2010-02-03 22:21:07

I keep hearing the line, "consumers are cutting back" yet the prices I still see at stores here in western Washington don't represent that.

Also there's been more good national press showing the benefit of eating wild salmon. I was driving listening to NPR, they covered a recent study that shows infants born from people that ate wild salmon test with higher brain function & IQ's.

I think we're selling our quality fish too low,

I think having frozen salmon portions in attractive packaging would be a huge seller,

Check this out... this is a big seller here in Seattle.

http://www.schwans.com/products/productDetail.aspx?id=52036&c1=10429

JYDPDX

2010-02-03 23:03:50

The Salmon consumer or retailer seem knows so little about what they are buying. Or perhaps the retailer knows exactly what they selling but plays the ignorance card. We might as well refer to all of it as "fish". What are they selling at swansons? King, humpy, chum? Nope just plain old standard "Alaskan Salmon." How can we even hope to get a premium price for our premium products, Ie. King Salmon, Troll caught coho, etc. when the retailers lump it all in to the same product name. Why would anyone pay a premium price for something that they don't even know is a premium product.