Quality

Alaska's triple-whammy

• Declining prices
• Disappearing markets
• Increasing costs

Alaska salmon industry currently faces many threats, termed here as the triple whammy. Prices are declining, markets are disappearing and costs continue to rise.

Is farmed salmon to blame?

• Has set new quality standards
• Standards we have ignored
• Farmed salmon has no surprises
• Increasing salmon consumption

Salmon farmers have set high quality standards that Alaska cannot ignore if it is to regain markets at a high value. Farm salmon’s consistent quality assures buyers they will not have a mixed lot of fish. In the process, farmed salmon increased consumption and that may prove useful for Alaska’s salmon industry down the way.

Why markets like farmed salmon

• Year-round availability
• Fresh year-round
• Consistent species and size grading
• Consistent flesh characteristics
• Low shrinkage
• Consistent and declining prices
• Market-driven production
• Financing considerations

Why markets favor farmed salmon?

Year-round availability/Fresh year-round: Farm salmon is available year round and it can be purchased fresh.

Consistent species and size grading/Consistent flesh characteristics: The salmon are grown to the same size and grading under their controlled production environment assures consistent quality.

Low shrinkage: Low shrinkage refers to less waste for the final seller who will need to remove rotting flesh prior to sale.

Consistent and declining prices: As salmon farms gain in size and production capacity, they have realized operating efficiencies that are passed onto the buyers.

Market-driven production: They produce products that the market is wanting.

Financing considerations: Salmon farms will accept delivers on financing terms.

Why the market no longer favors Alaska salmon

• Inconsistent supply
• Uncertain pricing
• Inconsistent quality
• High shrinkage
• Prodcer-driven production

Conversely, the markets are rejecting Alaska salmon because the supply generally occurs during the summer, they never know what prices to expect, often different grades of fish are in the same shipment, flesh quality is often poor resulting in high shrinkage at the point of sale and the production facilities are set, forcing consumers to settle with whatever products the processors choose to provide.

Why markets like the quality of farmed salmon

• Appearance - bright, no scale loss
• Flavor - mild and some customers like this
• Color - consistent
• Texture - uniform
• Freshness - fresh 52 weeks a year

Markets like the quality of farmed salmon. Since farms can control their production cycles and raise similar species of fish, consistency is achievable.

Causes of quality loss

• Bacteria growth
• Enzyme degradation
• Physical damage
• Dehydration
• Contamination

There are a number of things that cause quality loss. They might be lumped into categories like bacteria growth, enzyme degradation, physical damage, dehydration, and contamination. In the wild Alaska fishery, the industry has each of these elements fighting against it. Farmed salmon, on the other hand, has developed operations that contain these problems.

Buy and dealing with farmed salmon is easy.
Buying and dealing with Alaska salmon is not.

Why is That?

• Farmed salmon has eliminated all the negatives
  • Uniform pricing
  • Year-round availability
  • Consistency
• Alaska salmon quality is inconsistent
• Alaska is still trying to "sell the pack"

For seafood buyers, farmed salmon is just plain easier than Alaska salmon.

Farmed salmon is easier for buyers to deal with because it has eliminated all the negatives that remain associated with wild salmon. As mentioned before, farm salmon has uniform pricing, year round availability, and good old consistency.

The same is not the case with Alaska salmon. It remains inconsistent and often times producers are focused on trying to “sell the pack.” Wild salmon is processed as it runs to the coast - in huge volumes. This has lead to large “packs” of salmon inventory. Once a pack was built up, it was the processor’s job the rest of the year to sell it off. The easiest way to sell these huge inventories was to do it through big sales. This led to a “sell the pack” mentality, where producers try to move product quickly without great care to customer service or product development. Even today, you will often hear that Alaska is trying to sell the pack.

The Alaskan Way

• Processors buy the entire catch
• Processes all qualities the same way with old technologies
• Alaska sets the specs - not the market
• Prefer to export H&G or canned to large volume buyers
• We sell by the truckload
• Sell it and forget it!
• Poorly trained process workers

Alaska salmon in processed the Alaskan Way. Processors tend to buy the entire catch, no matter what quality the fish arrives in. All the fish is thrown together, good quality or not, and processed with old technologies. Grading specifications are set by the processors and have been known to change from one year to another. Huge volume sales of products with limited processing save costs and are encouraged. Oftentimes, sellers will not attach great customer service with their products. And finally, there is great turnover in the workforce leading to a poorly trained workforce.

It may not be the case that all sellers of salmon prescribe to the Alaska Way or that they don’t work hard to address these areas, but discussions with buyers in the market still indicate that salmon continues to move as a detached high-volume, commodity business.

The Alaskan Way worked adequately
prior to competition.

If buyers wanted salmon:

• it came from Alaska;
• it was purchased, processed, and sold to Alaska specifications;
• at prices set by the Alaska industry - not the market.

Before farmed salmon, Alaska salmon producers could sell the pack in the Alaskan Way. Practices and prices reflected it was a sellers market.

It's a new day, a new business.
Now we need to ask ourselves...

What is expected of Alaska fishermen and processors
that was not expected before?

Groups who handle quality differently

• Triad Fisheries
• The Copper River salmon industry
• Arctic Keta® producers
• Others (Cook Inlet, SE troll producers)

There are a number of sellers and programs coming on line that are taking a page from the farm salmon page book. Each of these groups adhere to quality standards.

Triad Fisheries is a troll-caught salmon producer that adheres to strict quality handling procedures that includes stunning fish, bleeding live, hand bleeding fish, immediate and quick freezing practices.

Copper River salmon industry is experimenting with a quality handling practices program that includes tracking each fish and utilizing a third party inspection program with a quality seal.

The Arctic Keta program was funded from 1996 - 2000. It required participants to adhere to quality handling procedures.

Cook Inlet fishermen and processors are undergoing a branding campaign that includes a quality control component. The Southeast troll caught producers also have similar quality control criteria in their buying operations.

Common threads among these leaders

• Fisherman and processor handling guidlines
• Based upon ASMI quality guidelines
• Third-party inspection and verification
• Branding

For the preceding groups, each prescribed to common quality control practices. These included handling guidelines based on ASMI quality standards, third party inspection and verification, and branding of the final product.