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Top Story: Beyond the stamp
Is support for improving fisheries a credible component to sustainable sourcing policies?
By Steve Coomes
October 01, 2013
When the big Alaska processors decided not to renew their Marine Stewardship Council (MSC) certification last year it sent shock waves through the industry. Confident in its own sustainability efforts, Alaska adopted Responsible Fishery Management (RFM) guidelines for its third-party certification.
What wasn’t expected was how the decision would displease Walmart. The retail giant said in June that it might stop shopping there. Its internal regulations on sustainable seafood sourcing dictated it could not buy from fisheries without MSC certification or equivalent standards established in fishery improvement projects (FIP’s) working toward MSC certification.
And though other seafood retailers have bought from FIPs for some time, none are so big as the Bentonville, Ark., chain, which set a 2006 goal of purchasing 100 percent of its seafood from MSC-certified fisheries.
That decision didn’t sit well with the Alaska Seafood Marketing Institute (ASMI). Alaska fisheries are not only recognized as a model for sustainability, ASMI says, its fisheries have no plans of deviating from the demanding and proven program: RFM was now, and would remain, its third-party certification scheme.
That scenario proved problematic for Walmart. According to Senior Manager of Sustainability Communications Christopher Schrader, Walmart was unfamiliar with the RFM standards, and without knowing that policy’s particulars, the retailer couldn’t be certain Alaska salmon still met its sustainability criteria. Schrader insists the company is not in this quandary by choice.
“We’re not taking a position around Alaska fisheries,” Schrader says. “The question has become, how do we collectively ensure that the seafood we’re sourcing today is sustainable and available for generations to come? To answer that, we have to have a clearer understanding.”
ASMI Executive Director Mike Cerne understands that. But what bothers him is Walmart’s presumption that switching to a new certification source makes Alaska salmon a dubious commodity. Why, he asks, would Walmart potentially shift its purchases away from proven providers to fisheries only now working toward MSC standards?
“We feel it’s very important that they recognize how sustainable Alaska’s fisheries are already,” says Cerne, who, while being interviewed, was preparing to meet with Walmart executives.
Cerne believes Alaska’s longstanding reputation for sustainable fisheries should exempt its industry from third-party certification entirely, but he also understands Walmart’s predicament.
“They have their policies and they have a responsibility to their customers to make sure they’re selling sustainable products,” says Cerne, adding that Walmart has cooperated in working to understand Alaska’s new standards. Pointing to the Alaska Department of Fish and Game’s $5 million research investment into the sustainability of the state’s hatcheries, he says, “For all practical purposes, that’s an FIP, even though it doesn’t follow an NGO model. That research is transparent and open to the public.”
Some view Walmart’s decision to consider buying from FIPs as the most significant issue at hand, wondering whether it will lead to even more retailers and restaurant chains to source from FIPs likely unable to manage new demand sustainably.
Dick Jones, director of major buyer engagement for Sustainable Fisheries Partnership (SFP), understands Wal-mart’s need to proceed cautiously wherever it buys its seafood. The Seattle-based organization is recognized as one of the world’s leading FIP coordinators, having spearheaded improvement projects for blue-swimming crab in Indonesia and the Philippines, among many others around the world.
“I would assume Walmart is looking at two clear lines of risk in considering FIPs,” Jones begins. “The supply risk: Will they have enough product to sell to customers? And the brand and reputational risks: They have to be clear that any standards they’re following are legitimate and can be audited and verified. They chose a very high standard in following MSC.”
Credibility at stake
Not surprisingly, the issue isn’t one that retailers and restaurant operators are eager to address publicly. Of nine major restaurant seafood chains and eight seafood retailers contacted by SeaFood Business, most didn’t respond to requests for interviews. A few pointed to sustainability statements on their websites, while just one, Wegmans, commented on the record.
This summer, the Rochester, N.Y.-based grocer promoted longtime seafood merchandising VP Carl Salamone to VP of seafood sustainability. He says the creation of his position marks the company’s increasingly serious approach to buying sustainable seafood, but “it doesn’t mean we’re doing FIPs on everything. We’re picking and choosing who we buy from very carefully.”
He says Wegmans considers not only the resource when choosing seafood sources, it looks at how the chain’s purchases impact those fisheries’ communities and workers. “We look at the social aspects of the FIP, the economy, traceability, all of it, when we buy from them.”
Asked whether Walmart’s decision to look closer at FIPs as a seafood source might change the way Wegmans shops, he says “no.”
“We have to do our own thing, which I’m sure other [retailers] are doing,” he says.
Such a strategy could be risky for fisheries, says Bill Fox, Ph.D., who is VP of fisheries at World Wildlife Fund (WWF) in Washington, D.C. Sourcing non-MSC-certified seafood risks harm to already exploited resources, he says.
“Everyone knows that, for seafood, MSC is the only credible standard, though we wish more certifications were as credible,” Fox says. WWF founded the MSC with Unilever in 1997, so it’s no surprise it heavily backs the program. Based on WWF’s criteria, MSC hits only 93 percent of the organization’s desired marks, but “everyone else is closer to 50 percent. The good thing is a lot of fisheries are working toward MSC certification.”
Another plus to buying from FIPs is the revenue sent to those fisheries’ businesses, Fox says. When managed correctly, funds are reinvested into those FIPs to further their certification aims. Making that happen requires delicate management, he adds.
“Retail provides funds,” Fox says. “The fishery improves and it can be certified in the end. But that takes time and oversight.”
Change on the water
A large retailer’s influence in the marketplace also can drive positive change, says Jerry Knecht, president and CEO of P.T. Bali Seafood International, an Indonesia FIP manager and division of his other firm, North Atlantic Seafood in Portland, Maine. Knecht cited McDonald’s encouragement of Russia to raise its cod fisheries to MSC standards years ago as an example.
When Russia declined the burger giant’s request, McDonald’s shifted its cod purchases to Argentina, leaving Russia to rethink its position and eventually gain MSC certification. (Jim Cannon, who served as an advisor to McDonald’s on its seafood purchases at the time, went on to found SFP.)
“He took that experience and said, ‘I can drive change on the market end,’ and that’s positive,” Knecht says.
While McDonald’s muscle effected change in Russia, Knecht says that evolution doesn’t happen so quickly in emerging markets. Such areas are highly fragmented and reliant upon thousands of subsistence fishermen who aren’t always easily convinced to follow a party line.
“When you’re dealing with fisheries in Russia, Alaska and Iceland, for example, it’s easier because people in those fisheries live by the rules or face the consequences,” Knecht says. “When you get to the emerging world, where there’s little rule of law, you’ve got to give them a good reason, like personal gain, to get them to play by the rules.”
Well-run FIPs, he says, can bridge the gap effectively by providing transparent, authentic and actionable data about a fishery that third parties, such as SFP or WWF, can take to retailers and say, “This is under competent management, this is competent science and they want to become certified,” Knecht says.
FIPs, he adds, are becoming market currencies that enable high-profile retailers like Walmart to rely on new suppliers if current ones aren’t meeting sustainability standards. He believes that will encourage other retailers to examine sourcing from FIPs, but he also says that shift likely will create market bottlenecks.
“FIPs are expanding at a very rapid rate now, but the data is also telling us there’s not enough seafood available to fill the unmet demand of the big buyers,” Knecht says.
Perhaps developing nations’ greatest challenge will result from their own good practices. Once their sustainability goals are achieved, they have to amass the funds necessary for MSC certification, which some sources peg at $1 million per fishery.
“Some fisheries just aren’t very big, so they don’t have enough revenue coming out of them to absorb the cost of certification,” Knecht says. “At this point, MSC’s growth is stymied because markets in the developed world are the only ones that have enough revenue to afford that certification.
“And if you have a huge retailer with the goal of 100 percent MSC-certified seafood, where do you go to meet all that demand — especially if you’re the size of Walmart?”
Michael McNicholas, VP of Secaucus, N.J.-based tuna processor Uoriki, says both sides of the situation merit consideration.
“Walmart is the monster in the room, and they can really vacuum up an entire resource,” he says. “So I don’t know if they’re good for FIPs or not.”
Schrader says Walmart knows progress in developing regions of the world will be slow and must be handled delicately, and that the company relies heavily on its certification partners to provide guidance and flag areas of concern. Anything Walmart can do to promote marketplace advancement is an upside, he adds.
“We’re looking for continual improvement, so it would make sense for us to work with fisheries that are making progress and showing genuine concern for supply management,” says Schrader. “We feel that it makes a more positive impact to encourage that rather than not.”
While Walmart’s intentions may be noble and beneficial to developing nations, McNicholas believes the retailer played its hand poorly in Alaska.
“Walmart will bend to political pressure in Alaska,” McNicholas predicts. “That was a terrible position to take because the only other source of MSC-certified salmon is Russia. The Alaska boys have to like that as ammo for a press campaign.”
But even McNicholas admits that PR maneuvering has its limits when few outside the seafood industry understand the dispute or the needs of the players themselves. The trade acronym overload alone, he says, “has even me to the point that I don’t know who’s on first and what’s on second anymore.”
Like other processors, his wholesale customers and their retail customers have little to no idea what any of it means other than “assumed sustainability.” One fine-dining chef, who asked to speak off record, says, “I can’t keep up with all that. It’s a mess to my mind. I have to trust that my supplier is doing that homework for me, that he’s buying fish that are sustainable. I guarantee I’m not the only one who’s confused like this. ‘Just get me good fish,’ I tell him.”
It’s no small wonder that buyers trying to determine what role FIPs play in their sourcing policies are waiting for market leaders like Walmart to dip their toes in the waters first. Contributing Editor Steve Coomes lives in Louisville, Ky.