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« September 2007 Table of Contents

Case Study: Wild salmon

New product forms fuel Alaska salmon market expansion

The mighty wild salmon, the fish of legend for many cultures, has until recently in the United States suffered the less-than-noble fate of being headed, gutted and shipped out canned and frozen to countries like Japan. But a new wind blowing across the country, or at least through the corner offices of marketing gurus, has helped position wild salmon as gourmet fare and has opened the market for wild salmon to upscale eateries and retailers.

That wild salmon is now a featured entrée at some of America's finest restaurants rather than simply a canned staple on the back shelf of a pantry is an effort largely led by the state of Alaska's savvy public relations and sustainable fishing efforts.

And for Alaska fishermen, who catch an estimated 95 percent of the wild salmon sold in the United States, gaining a new market is a good thing.

"We're going for upscale, white tablecloth restaurants and the Whole Foods Market sort of business," says Jack Schultheis, sales and logistics manager for the Yukon Delta Fisheries Development Association, based in the lower Yukon Delta area.

A majority of the fish caught by association members are sold through Kwik-pak Fisheries, a Yup'ik, Eskimo-run company. Most of their salmon was shipped to Japan as recently as five years ago, says Schultheis. Now he estimates that 40 percent of the company's production is sold fresh to high-end restaurants or retailers in the United States, a line of business he notes is "a tough market to break into, because we don't have a lot of bullshit salesmen."

And while fresh salmon is still a small piece of the overall market for wild salmon, it is a growing one, says Schultheis.

"We are improving every year in terms of placement. Going from 0 percent to 40 percent in five years may be slow, but it is good."

It is a line of business that also keeps up the price of salmon paid to native fishermen, says Ragner Alstrom, executive director of 
the YDFDA.

Alstrom points out that in the Yukon, with gas prices approaching $7 a gallon, transportation costs are even higher than in the Lower 48.

"With the costs of transportation rising, targeting high-end restaurants and groceries is one way to pass on money to our fishermen," says Alstrom.

Indeed, last year the price of fresh Alaska salmon fillets rose to $4.34 a pound, a 32 percent increase over 2005 prices, while H&G fresh prices approached $2.26, a 1 percent increase. In terms of frozen product, H&G salmon reached $1.45, a 12 percent increase from 2005, and fillets rose a whopping 24 percent to $3.82 a pound during that time frame, according to the state's Department of Revenue.

The big five

Five wild salmon species can be found on the market, chinook, chum/keta, coho, pink and sockeye. The chinook, or king salmon, which can stay out to sea for five years before returning to their natal streams, has the highest oil content and commands the highest price, especially if troll-caught on the ocean. Chum is least expensive and usually caught with seines or gillnets. Coho salmon are mostly troll-caught, although some fish are taken by seines and gillnets. Pink salmon is the smallest of the wild salmon but is also the most plentiful and is used mostly for canning, while sockeye, also known as red salmon, is used for premium canned salmon and is mostly caught with gillnets.

Wild salmon is heavily regulated in California and the Pacific Northwest, where it crops up on endangered lists. While California in past years has exceeded Alaska's catch of chinook salmon, says David Goldenberg, CEO of the California Salmon Council, severe limits set in 2005 led to the 2006 season being declared a disaster by the state. California's chinook salmon harvest dropped from an average 6 million pounds before 2005 to 1 million in 2006.

Some $60.4 million in disaster relief has been established for California, Oregon and the Indian tribes who rely on the salmon industry in those states, says Goldenberg.

Though California salmon prices have soared along with the decline in supply to, "upward of $6 to $7 a pound from about $4 for wild chinooks," Goldenberg says, or around $28 a pound at retail, "it is a niche market here until our supply stabilizes."

While the lower 48 states struggle with supply issues, Alaska is on track to have its seventh strongest salmon run on record in 2007, according to the Alaska Department of Fish and Game, which it credits to the state's long-standing sustainability goals.

Alaska has mandated fish production on the sustained-yield principal in its constitution since its acceptance into the union in 1959, and is the only state to do so.

The salmon season started May 1, and as of Aug. 10, preliminary Alaska commercial salmon catches, saw 463,000 chinooks; 44.8 million sockeyes; 1.2 million cohos; 74.2 million pinks and 12.9 million chums landed, according to the ADF&G.

Selling sustainable

The Marine Stewardship Council's sustainability certification of Alaska's wild salmon fisheries has allowed Alaska to embark on a multi-million-dollar marketing campaign effectively branding the state as the premier supplier of wild salmon, and plays heavily to both the topics of healthy eating and sustainable supply.

The effort has included television ads running on the Food Network featuring the actor/economist/comedian Ben Stein. The ads target an audience of college-educated women, ages 35 to 54 with an annual household income of at least $75,000. The spots play to an environmentalist sentiment as Stein urges viewers to "Grab a fork, there's a lot more out there."

In a celebratory theme, the arrival of the first run of wild Alaska salmon in the spring is feted with the same amount of enthusiasm by the Alaska Seafood Marketing Institute as French wine producers who rejoice in the arrival of Nouveau Beaujolais each fall.

Other ASMI campaigns play up the health benefits of wild salmon through heart-healthy recipe promotions; an ASMI-sponsored survey conducted by the Hale Group revealed that restaurant patrons showed a "strong preference" for wild seafood on menus; point-of-sale material is available for retailers; and alliances with top chefs and recipe development also are employed as ways to market wild Alaska salmon.

"Our mission is to raise the value of the harvest and one of the ways we can do that is to try to lift as much of our harvest as we can out of the commodity category," says Laura Fleming, ASMI's communications director.

"In the old days, Alaska's salmon harvest found its way either into a can, or was headed and gutted and frozen," Fleming notes. "Now, while much of the harvest is still canned in addition to producing more fillets, which are in demand in the United States, our industry is adding value with new product forms."

One area of growth is products that save time for consumers like salmon burgers, smoked products and boneless skinless portions in a variety of sizes, Fleming adds. Fully cooked grill-marked portions, some with smoke flavor, are playing 
well to the foodservice industry, says Fleming.

But just as a rising tide raises all ships, the high-profile Alaska campaign also helps build awareness of the benefits of wild salmon versus farmed salmon, at a time when imports of farmed salmon from Chile and other countries are the chief competition to the wild fish, says the California Salmon Council's Goldenberg.

While California fisheries operate on a much smaller public relations budget, "If Alaska can raise awareness about wild salmon, the more power to them," Goldenberg says.

And Alaska's wild message has gotten through to chefs like Maria Hines, owner of the Seattle restaurant Tilth, who buys her wild salmon off the docks from a Seattle fisherman.

Hines, who was named one of Food & Wine magazine's "Top Ten Best New Chefs in America" in 2005, looks for fresh local food for her menu. To that end, she values her relationship with her local fish supplier.

"It is a family-run business," she says, adding that she values knowing where the fish served at Tilth is coming from.

Eco-conscious consumers in Seattle and other cities across the country are willing to pay more for wild fish.

"My customers ask for wild salmon because they want sustainability and flavor," says Hines.

Thyra Porter is a freelance writer based in Cape Elizabeth, Maine