Clawing for market share against foreign suppliers

A flood of cheap imported crabmeat, much of it from Asia, has put the pinch on US crab processors.

Crabmeat costs about $18 a pound to pick and process, explains Jim Dodson, owner of Byrd's Seafood, a Crisfield, Md.-based crab-picking house. If foreign imports undercut these costs by just 25 cents, they can "outsell us any day of the week," he says.

Opting for the price advantage, many restaurants - even those throughout the Chesapeake Bay area - serve the Asian species of crab and call it "Maryland-style crab cakes" or "Chesapeake-style crab cakes," Mr. Dodson notes.

"Everyone could be thinking that this is the blue crab, but it's not. It's a completely different species," he says, charging some restaurants with deceptive advertising. "People should go in and ask what it is they're eating."

In Dodson's own restaurant, The Captain's Galley, the menus state: "We don't use foreign crab meat."

Officials estimate that crab imports have tripled from 9.2 million pounds in 1994 to more than 27.2 million pounds in 1999.

During this time, the US market share has dropped from 67 percent to 27 percent.

Bill Sieling, a marketing specialist with the Maryland Department of Agriculture says that if the economic picture doesn't change in the next two to three years, "you are not going to see anything close to resembling the domestic crab industry we have today. It's just not going to be there."

North Carolina, the overall giant among crabmeat producers, has reportedly lost 19 of its 43 crab-processing plants in the past five years.

"What we need to do is a big marketing campaign to reeducate consumers what really good North American blue-crab meat tastes like," Mr. Sieling continues. He estimates a successful campaign would cost about $35 million to $50 million.

A coalition of crab processors from Maryland, Virginia, North Carolina, Florida, and Louisiana has filed a petition with the US International Trade Commission seeking federal funds for just such a marketing campaign.

The petition, which was heard by the Commission on June 15 in Washington, also calls for market relief through import restrictions. In a similar case, US sheep ranchers received federal help after being hit by a flood of lamb imports from Australia and New Zealand.

The Commission is expected to rule on the crabmeat petition in mid-July.

In the meantime, US producers are moving forward with plans to better promote their product. These efforts include a just-released trademark logo-seal for use on packaging to tout domestic crab.

"People have a right to know where the crab comes from," says Jack Brooks, a Maryland crab producer who is active with the Chesapeake Bay Seafood Industries Association. "You wouldn't go into a restaurant and just order 'fish.'"

But crabmeat importers counter that they're only responding to consumers. Phillips Foods Inc. is one of the country's largest importers of crabmeat from Asia.

The Baltimore-based company just recently started labeling its boxes of Maryland-style crab cakes and soups with the crab's country of origin, says Honey Konicoff, director of marketing for Phillips.

But at the same time, Ms. Konicoff notes that Phillips has expanded the market for crabmeat well beyond the mid-Atlantic, where it didn't exist before.

"The domestic numbers can't possibly meet the demand," she says.

Konicoff argues consumers don't necessarily expect their crab cakes to be made with domestic crab. They just want something delicious.

As an example, she notes: "When you eat New York-style cheese cake, I don't think the consumer expects that all the ingredients come from New York and that it was prepared in New York."

Konicoff warns that if the government limits foreign crabmeat, there will be a huge increase in price, the industry won't be able to meet demand, and people won't buy the product. "We all will lose in the end," she says.

Mr. Brooks fears that perhaps the domestic industry has already lost: "The damage has been done," he says. "They've come in and replaced us."

(c) Copyright 2000. The Christian Science Publishing Society

You've read  of  free articles. Subscribe to continue.
QR Code to Clawing for market share against foreign suppliers
Read this article in
QR Code to Subscription page
Start your subscription today