April, 2003: The Yankee Trader

By Greg Rushford

Published in the Rushford Report

BOSTON—-Although this great port city is commonly called Beantown, the key to understanding Boston — and an important part of the American character — begins with seafood. It started with the Pilgrims, who arrived in New England in 1620 with no appreciable talents apart from religious passion — and nearly starved because they did not know how to catch fish. But within 25 years the Pilgrims had turned into resourceful Yankee traders, as author Mark Kurlansky noted in Cod, a political biography with the apt title,  The Fish That Changed The World. Indeed, the triangular international trade that built Boston began with cod. Yankee traders sold their best cod in Spain, where they acquired money, wines, fruits, iron and coal, some of which they then traded in the West Indies for sugar and molasses before sailing their schooners back to the Bay Colony. By the 1700s, Boston already had mansions built by codfish aristocrats, and had become an international trading power.

            So it is appropriate that Boston now hosts the annual International Boston Seafood Show, for 21 years the biggest annual celebration of the global seafood industry. The industry’s best and brightest from every continent gathered here from March 11-13, where they displayed a dazzling array of products and innovations in some 1,300 booths on three floors of the Hynes Convention Center . For a visitor from Washington , D.C. , where politics is the only industry, this was a wonderful educational opportunity to see the inner workings of today’s fast-moving, creative global seafood supermarket. Anyone can glimpse pieces of the international seafood industry on a much smaller scale simply by walking down the aisles of their local grocer — but the show in Boston offered a close look into a much larger reality.

            If you looked closely while walking around the booths — sampling a wonderful array of delicacies ranging from chowders, sushi, salmon, shrimp,  every wonderful thing imaginable that once swam somewhere — politics  was never far from the surface.  The competitive, innovative waters of the global seafood industry are constantly churning with conflict.

            Sometimes the seafood politics were not obvious at first glance.

Seaweed politics

            Consider Arturo de Jesus, who was running Booth 2639 on the second floor.

            De Jesus is a Filipino who lives in Irwindale , Calif. He works for a Taiwanese company called New Choice Food, Inc., which makes an innovative snack product called Squeez’N’Bites. These are bite-size heart-shaped cups of fruity jello, made from strawberries, kiwis, apples and other fruits. I had the mango flavor. The mango came from the Philippines . The seafood connection is carrageenan, a food additive that also comes from the Philippines .

             Carrageenan is derived from seaweed, which Philippine entrepreneurs plant in shallow ocean waters perhaps six feet deep in rows that look like corn or soybeans, only underwater. Carrageenan gives the consistency to jello, and also other food products ranging from burgers to beer and ice cream. The Philippine seaweed industry is world class.

             But when the Filipinos started marketing carrageenan in the United States in the early 1990s, they came under protectionist fire from competitors who could not compete on prices. Fronting for domestic lobbyists, Sen. Orrin Hatch (R-UT) and then-Sen. George Mitchell (D-ME) peddled unfounded allegations that the Philippine seaweed was unsafe. It took the Filipinos more than a year (and a multi-million dollar lobbying effort) to persuade the Food and Drug Administration to knock down the false charges.

Science, or salmon politics?

            Speaking of dubious science, I happened by Booth 1327 to see what Copper River Seafoods had to offer. Now, there is nothing dubious about wonderful wild salmon that are caught in Alaska ’s scenic Copper River . And there is much to praise in Copper River Seafoods’ clever niche marketing of its product, aimed at giving an Alaska frontier feeling.  “Taste the Wild —- Taste the Difference,” the brochure encourages. If only that were all to it.

            The difference is found in farmed salmon. For years, the Alaskan wild-salmon industry has been in the business of trashing farmed salmon, which mainly come from Chile . The economic root of the problem is obvious: scarce Alaskan wild fish, caught only seasonally, are easily outsold by cheaper farmed fish from aquaculture powers like Chile . Chilean farmed salmon is available every day of the year in whatever quantities the market will bear. Consumers love it.

            What’s the difference between your wild salmon and farmed salmon? I asked a Copper River representative.

            “Ours don’t have pollution, antibiotics and PCBs,” he explained. “Ours don’t spread disease.”

            Ouch. I immediately thought of my daughter, who lives in Boston and had unknowingly dined on farmed Chilean salmon the previous night — without keeling over, at least.

            To some in the Alaskan salmon industry, smart marketing involves frightening consumers with scary-sounding science. The Alaskan salmon folks are enthusiastically supporting some environmentalists who allege that farmed salmon raised in floating cages made of nets spread antibiotic-laden toxic poop around the oceans. While there are certainly legitimate environmental issues associated with farmed fish that deserve to be fully aired and debated, still, this has the smell of a negative advertising campaign.

            For example, the David Suzuki Foundation — run by a Canadian environmentalist-broadcaster — has a brochure that purports to explain why farmed salmon is not as good as wild salmon. Seems that farmed salmon “is one of the greatest threats to nature.” Farmed salmon “impact wild salmon and other marine species by spreading disease and parasites.” Farmed Atlantic salmon contains “200 percent more fat than wild Pacific pink or chum salmon.” Might as well have a cheeseburger.

            Whatever the truth, the more one reads the brochure, the less it looks like science and the more it looks like David Suzuki is selling something. Farmed salmon, he asserts, doesn’t even taste as good as wild salmon. “In blind taste tests, farmed salmon loses every time,” the brochure adds. “Whether ordering or buying salmon always ask if it’s wild or farmed.”

            Experience suggests that the real question for Mr. Suzuki is: Where does science end and politics begin?

Inescapable global economic realities

            The thread that ties together the seafood fights that I’ve covered in recent years — seaweed, crabs, crawfish, catfish, salmon, shrimp — is that of a declining domestic industry that is going through the painful process of adjusting to competitive challenges. The Mississippi Delta catfish farmers who first developed a lucrative domestic market for farmed catfish, for example, deeply resent the fact that Vietnamese entrepreneurs have had the temerity to enter U.S. markets to compete. Probably Henry Ford, who developed the assembly lines for Model T’s, felt the same way when other automakers came along to take market share from him. No businessman likes his competitors. It is easy to understand why Mississippi and Alabama catfish farmers, or Louisiana crawfish producers, or hard-pressed Gulf Coast shrimpers, would hope to use the prospect of high tariffs associated with successful use of the U.S. trade laws to keep the foreigners at bay.             Speaking to a panel here, Antonio Diaz, the president of the California-based Ocean Garden Products, Inc., a shrimp industry marketing leader, summed up the choice in clear terms: When you are in a race, you can try to win it by running faster — or you can try to win by making your competitor run more slowly.

             But while the trade laws may slow down the competition, they can’t do so forever. When it comes to seafood, those who survive can’t depend solely on tariffs. In this business, either learn to use modern aquaculture and innovative marketing, or you won’t be around long. That is the most important lesson that was on display here in Boston during the seafood show.

            Signs of those who are adapting were all over the Hynes Convention Center . 

            Take David Gautier, of Pascagoula Ice, who is busy adjusting his business to the new realities of the global shrimp industry. Gautier deals in wild shrimp that is caught in U.S. waters. As farmed foreign shrimp is so much cheaper, Gautier is looking for niche markets to market the high-quality wild American shrimp. Consumers, he explains, will pay a price premium for such shrimp, if it is marketed properly. At the same time, Gautier has invested in a shrimp farm in Belize , because he understands the huge demand in the U.S. market for farmed imports (presently 88 percent of US consumption).

            Christine Ngo, of H & N Foods International in San Francisco and Los Angeles , also has learned the realities of the global marketplace. Ngo, a hard-working Vietnamese-American who came to this country as a boat-person refugee in the late 1970s at age five, is a classic American success story. She is a true Yankee Trader.

            When I found her booth, Ngo was busy talking to a couple of Good Ole boys from Alabama about buying some U.S. farm-raised catfish. H & N buys a lot of domestic fish, including wild salmon. At the same time, Ngo’s business also relies upon imports, including Asian Tiger Shrimp, Chilean salmon fillets, and catfish from Vietnam .

            Those Vietnamese catfish are now famously called “basa,” thanks to a negative lobbying campaign against them by catfish producers from the Mississippi Delta that resulted in a law passed by Congress stipulating that only North American catfish can be called catfish. By whatever name, it looks like the price of the fish from the Mekong Delta will soon go up, thanks to a pending antidumping petition filed by the Catfish Farmers of America.

            Even the xenophobic U.S. catfish industry can’t escape global realities.

            This I learned while munching on the delights offered by American Pride Seafoods, which had a prominent booth on the second floor of the convention center. The American Pride booth featured a gray Volkswagen beetle that was adorned with fins to look like a bewhiskered catfish. The American Pride representatives handed out tasty bites of American-farmed catfish from its operations in Greensboro , Alabama . It was a patriotic scene.

            But wait. The same American Pride people were also offering salmon — from Norway . Turns out that American Pride’s parent, the Seattle-based American Seafoods International, also owns Frionor USA, Inc., a subsidiary of Norway Seafoods Co. The catfish part of American Pride is at war with foreigners, while the salmon part is foreign. American Pride is, in fact, a perfect model of the kind of sophisticated international operation that it takes to thrive in the global markeplace.

            There were too many other international success stories to note here. Phillips Foods, Inc., over in Booth 2515, has grown from a regional restaurant chain that struggled to find enough domestic crabs to serve its customers into a major supplier of seafood to U.S. national markets. The secret to Phillips’ success is that Steve Phillips learned to source his seafood in international markets. Another major innovator at Booth 804, the Boston-based Slade Gorton & Co., won the annual New Product competition with something tasty called Asian Citrus Shrimp — which is pink shrimp from Argentina that is flavored with a citrus- and wasabi marinade.

            Like Baltimore ’s Steve Phillips, Mississippi ’s David Gautier, California ’s Christine Ngo and so many other successful seafood entrepreneurs, Slade Gorton’s President Wally Stevens thrives because of his ability to swim in international waters. Like the Pilgrims in Boston who learned to fish, trade, and thrive back in the 17th century, such people are today’s Yankee Traders.         

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