Legislature(2023 - 2024)GRUENBERG 120
02/09/2023 11:00 AM House FISHERIES
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| Audio | Topic |
|---|---|
| Start | |
| Presentation(s): Update on Alaska's Seafood Market | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON FISHERIES
February 9, 2023
11:07 a.m.
DRAFT
MEMBERS PRESENT
Representative Sarah Vance, Chair
Representative Kevin McCabe
Representative CJ McCormick
Representative Ben Carpenter
Representative Craig Johnson
Representative Louise Stutes
Representative Rebecca Himschoot
MEMBERS ABSENT
All members present
OTHER LEGISLATORS PRESENT
Representative Dan Ortiz
COMMITTEE CALENDAR
PRESENTATION(S): UPDATE ON ALASKA'S SEAFOOD MARKET
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
JEREMY WOODROW, Executive Director
Alaska Seafood Marketing Institute
Juneau, Alaska
POSITION STATEMENT: Provided a PowerPoint presentation on
Alaska's seafood market.
ACTION NARRATIVE
11:07:28 AM
CHAIR SARAH VANCE called the House Special Committee on
Fisheries meeting to order at 11:07 a.m. Representatives
McCabe, McCormick, Carpenter, C. Johnson, Stutes, Himschoot, and
Vance were present at the call to order.
^PRESENTATION(S): Update on Alaska's Seafood Market
PRESENTATION(S): Update on Alaska's Seafood Market
11:08:51 AM
CHAIR VANCE announced that the only order of business would be
the Update on Alaska's Seafood Market presentation.
11:09:27 AM
JEREMY WOODROW, Executive Director, Alaska Seafood Marketing
Institute (ASMI), gave a PowerPoint presentation, titled "Alaska
Seafood Marketing Institute," [hard copy included in the
committee packet]. Mr. Woodrow provided an outline of the
presentation content, as shown on Slide 2, [original punctuation
provided]:
head2right ASMI Overview
head2right Economic Update
head2right Global Market & Strategy
head2right ASMI Resources
MR. WOODROW read from Slide 3, "What is the Alaska Seafood
Marketing Institute?," which read as follows, [original
punctuation provided]:
As Alaska's official seafood marketing arm, ASMI
maximizes the economic value of the Alaska seafood
resource by:
? building and protecting the Alaska Seafood brand
? developing and creating markets for Alaska
seafood products
? working directly with the seafood industry to
maximize efforts
ASMI is directed by a Governor-appointed Board of
Directors: five processors, two commercial harvesters;
and 10 board-appointed Species and Operational
Committees.
MR. WOODROW identified the funding sources of ASMI for fiscal
year 2023 (FY 23) and FY 24 spending plans in Slide 4, "ASMI
Funding," which read as follows, [original punctuation
provided]:
FY23 Budget Authority
Seafood Marketing Assessment
$15,932,800 (0.5% of ex-vessel value)
Federal Funds
$5,603,500
• Market Access Program (MAP)
• Agricultural Trade Promotion Program (ATP)
• Saltonstall-Kennedy Grant (SK)
• Cochran Fellowship
• Emerging Markets Program (EMP)
• Quality Samples Program (QSP)
$0 General Funds*
FY23 Spend Plan: $21,250,000
FY24 Governor's Budget
Seafood Marketing Assessment$16,067,300 (0.5% of ex-
vessel value)
Federal Funds
$5,640,500
• Market Access Program (MAP)
• Agricultural Trade Promotion Program (ATP)
• Saltonstall-Kennedy Grant (SK)
• Cochran Fellowship
• Emerging Markets Program (EMP)
• Quality Samples Program (QSP)
$0 General Funds
FY24 Spend Plan: Set by ASMI Board in May
*FY23 Capital Funds: $300,000 UGF for Alaska canned
salmon food aid to Ukraine.
MR. WOODROW defined the term, "ex-vessel value" in Slide 4, as
the first sale from a fisherman to the processor or the next
person down the line.
11:11:50 AM
MR. WOODROW recounted the ASMI budget history and forecast in
the presentation. He showed a graph on Slide 5, which displayed
the funding sources for ASMI. He walked through the trends in
the graph, notably FY 20, where there was a dramatic loss in
funding. Subsequently, the federal government stepped in,
providing funding through the Alaska CARES Act in 2021 and other
funding sources later in 2022. He said, this year's spending
plan was around $21 million, but without additional revenues,
ASMI will have to reduce spending until revenues match
expenditures. He admitted ASMI will need to reduce the budget
down to $14 million to be sustainable.
11:13:18 AM
MR. WOODROW highlighted the five main programs of ASMI, shown in
Slide 6: Domestic Marketing; Seafood Technical; International
Marketing; Communications; and Global Food Aid. He then showed
a map of the 42 international markets ASMI cooperates with, on
Slide 7, which includes emerging markets in South America,
Southeast Asia, and Africa. Referring to slide 8, "Domestic
Marketing," he disclosed the domestic market [U.S. and Canada]
consists of primarily business to business in the foodservice
and retail space. He highlighted the figures on slide 8, which
read as follows, [original punctuation provided]:
FY22/23 Promotions:
•35,000 retail and e-commerce stores
•18,000+ foodservice establishments
11:15:00 AM
REPRESENTATIVE MCCABE asked if this marketing presentation could
be sent to the U.S. Trade Representative to [promote] Alaska
seafood as an export commodity.
MR. WOODROW responded that is a great idea, and he said he would
follow-up with the U.S. Trade Representative [Katherine Tai].
11:15:29 AM
MR. WOODROW, returning to the PowerPoint, expressed the need for
communication and public relations for sustainable seafood
marketing. On Slide 9, "Communication & PR," he highlighted a
segment on the Today Show that kicked off Earth Week featuring a
fisherman from Kodiak who displayed an assortment of salmon
products during a live interview. He directed attention to
Slide 10, "Seafood Technical," which describes how the marketing
program interacts directly with the seafood industry to develop
new materials and research. He said the program ensures quality
control of seafood products from boats, to processors, and
throughout the supply chain.
MR. WOODROW described the Global Food Aid Program on Slide 11,
which read as follows, [original punctuation provided]:
Seeks Alaska seafood inclusion in domestic and
international food aid programs:
USDA
Women's Infants and Children's (WIC)
Supplemental Nutrition Program (SNP)
School Lunch Program
USAID, and more
MR. WOODROW added that the Global Food Aid Program provided
300,000 cans of salmon to Ukraine. He said the cans were
delivered on January 30, [2023], partnered with the World
Central Kitchen (WCK). He thanked the Governor Mike Dunleavy
Administration for maintaining ties with the Ukrainian
workforce.
11:18:44 AM
REPRESENTATIVE HIMSCHOOT inquired about the artwork on the
salmon can label.
MR. WOODROW responded that it was created in-house by ASMI as a
throw-back to the can salmon labels of old, in honor of those
labels.
11:19:28 AM
MR. WOODROW continued the presentation with Slide 13, "A
Cornerstone of Alaska's Economy." He read the statistics from
the slide, which read as follows, [original punctuation
provided]:
• Directly employs 62,000 workers annually, more
than any other industry in Alaska - largest
manufacturing sector in Alaska
$1.75B in direct earnings
• Industry operates over 8,900 Vessels & over 160
shore based processors in 40+ communities
• Alaska holds six of the nation's top ten ports by
value
MR. WOODROW continued directly to Slide 14, which read as
follows, [original punctuation provided]:
Value for Alaska
Seafood provides economic activity and tax revenue the
state.
$163 million
in annual state, municipal, and federal taxes, fees,
and assessments paid by Alaska seafood industry
$5.7 billion
directly benefits and contributes to Alaska's economy;
$2.2 billion in labor income
MR. WOODROW summarized Slide 15, "SEAFOOD SUSTAINS ALASKA." He
provided polling results that affirmed 87 percent of Alaskans
feel proud when they see Alaska seafood in grocery stores and
restaurants; and 88 percent of Alaskans view commercially-caught
Alaska seafood as enhancing Alaska's reputation around the
world.
11:21:20 AM
The committee took two consecutive at-eases from 11:21 a.m. to
11:22 a.m. to address a technical issue.
11:22:23 AM
MR. WOODROW played a 30-second video about the Alaska seafood
industry. He added that the advertisement he played can be seen
on YouTube and other media outlets.
11:23:21 AM
REPRESENTATIVE HIMSCHOOT asked what the criteria were for
choosing an Alaska audience or if the intended audience was
broader than just Alaskans.
MR. WOODROW clarified that the video he showed was targeted
specifically for Alaskans. He said the main reason was to show
support for the industry.
11:24:15 AM
CHAIR VANCE asked specifically which Alaska communities are
being targeted by ASMI.
MR. WOODROW said the aim was to hit most of the population base
and coastal Alaska, as well.
MR. WOODROW resumed the presentation on Slide 17, "Alaska's
Fisheries' Ex-Vessel Values," which shows a pie chart depicting
the diversity of commercial fisheries in Alaska. He showed
salmon are the predominant species caught at 39 percent;
followed by halibut, sablefish, and crab with 26 percent; next
in proportion is pollock with 22 percent; with cod, flatfish,
rockfish, and "other" rounding out the rest of the $2 billion
yearly total. He said the pie chart illustrates why it is
important to have a diverse seafood portfolio to maintain
consistent earnings from year to year.
MR. WOODROW read from Slide 18, "2022 - Groundfish Harvest,"
which read as follows, [original punctuation provided]:
• Pollock quota decreased by >15%
• Record prices and continuing strong
• Flatfish economics appear to be recovering after
disruptions (China/COVID)
• Pacific cod quotas growing after years of
decreased abundance
11:26:26 AM
MR. WOODROW pointed to Slide 19, "2022 - Salmon Harvest," which
illustrates salmon harvest fluctuations over a 5-year average,
as follows, [original punctuation provided]:
2022 Salmon Harvest
• Record breaking Bristol Bay harvests
• Pink well below average, but up from 2020
• Keta historically low, but harvest volume up
from 2021
• Strong prices
• Some regional harvests down
• Sockeye would be down if not for Bristol Bay
MR. WOODROW spoke about the graph on Slide 20, "Bristol Bay
Sockeye Salmon Harvest," which shows the harvests, measured in
the millions of pounds, from 1980-2022. He emphasized that
Bristol Bay sockeye salmon are driving the industry right now.
He cautioned that salmon processors have an overload of product
right now and have asked for the help of ASMI to move the
overstock to other markets. He said the response by ASMI was to
add $1.1 million to the domestic program in 2023.
11:28:11 AM
MR. WOODROW showed Slide 21, "Alaska Seafood in U.S. & Global
Contexts," which provides the statistical breakdown the Alaska
fishes harvested, [original punctuation provided]:
Alaska contributes to the global supply:
• 41% of Alaska pollock
• 30-40% of wild salmon
• 66% of sablefish
• 61% of Pacific halibut
• 21% of flatfish
• 10% of cod
11:29:19 AM
MR. WOODROW segued from global markets to the Russian market on
Slide 22, "What is the U.S. blocking from Russia?" He provided
the history of 2014 and 2022 embargos between Russia and the
U.S.
11:30:20 AM
MR. WOODROW highlighted the bullet point from Slide 23, "GLOBAL
COMPETITION," which read as follows, [original punctuation
provided]:
• Opportunities & Challenges
not unique to Alaska Seafood
• Norwegian Seafood Council
global budget 3x larger than
ASMI
• Russia investing $7 Billion
into its fisheries
• Processing, New Vessels, Cold
Storage & Promotion
• "New Alaska"
11:31:02 AM
MR. WOODROW outlined the four major obstacles facing the Alaska
seafood market on Slide 24, "HEADWINDS," which are: inflation;
a strong U.S. dollar; product inventory; and trade barriers.
Conversely, he stated that Alaska has opportunities from: brand
recognition of Alaska salmon; market diversification; full
utilization of Alaska fleets; and innovation of new products.
He elucidated the global strategy of ASMI is based around
connecting with home cooks and promoting wild, sustainable
salmon harvests, as well as practicing diversification and
premiumization.
11:32:40 AM
MR. WOODROW continued the presentation on Slide 27, "Global
Marketplace," which read as follows, [original punctuation
provided]:
About 65-70% by value of Alaska
seafood production exported
annually to 100 countries
U.S. has largest market share
with more than 30% by value
China/South Korea largest
trading partners primarily for
transshipping and reprocessing
Japan/Europe largest direct
foreign markets
75% of pollock, keta salmon,
and flatfish species exported
11:33:58 AM
MR. WOODROW emphasized the need for diversification on Slide 28.
He explained that Alaska's export to China has dropped to $450
million from 2017 to 2020. He said subsequently, selling
seafood to China is incredibly expensive with a 38 percent
tariff. He emphasized that it is essential to grow markets in
Southeast Asia, South America, and possibly Eastern Europe and
Africa. He showed Slide 29, "Alaska Seafood Export Value by
Region," which depicts the decline of seafood sales to China
from 2013 to 2022.
MR. WOODROW revealed the new markets ASMI recently developed on
Slides 30-32, in South America, Southeast Asia, England, and
Japan.
11:37:28 AM
MR. WOODROW moved to Slide 33, which illustrates the numerous
grocery companies involved with e-commerce, such as Instacart.
11:37:55 AM
MR. WOODROW highlighted how the pandemic increased sales of
seafood prepared at home. He showed Slide 34, "Still Cooking at
Home," which indicates 91 percent of consumers expect they will
prepare a meal at home from scratch as much or more often as
last year. He continued to Slide 35, "Relevant recipes are key
to keeping new consumers." which read as follows, [original
punctuation provided]:
"Most consumers could
be enticed to eat more
seafood especially if they
were provided recipe
ideas" - Datassential 2022
"Most seafood consumers
want to know more about
how to cook, prepare or flavor seafood (80%) and
new and different ways to
cook seafood (83%)" - FMI 2022
11:38:40 AM
MR. WOODROW referred to Slide 36 to relate there are "7.3
billion impressions" on a hashtag for Alaska seafood hacks. He
then moved to Slide 37, which depicts how ASMI has continued to
work with retailers such as Costco Wholesale. Slide 38 shows
chef Brooke Williamson promoting Alaska rockfish. He emphasized
the need to work with fine-dining restaurants. He pointed out
that restaurants have changed since the pandemic and menus are
smaller therefore making it very competitive to keep seafood on
the menu.
11:40:55 AM
MR. WOODROW turned to slide 40 and said Alaska seafood has logo
power. He highlighted [consumer ratings] on the slide. As
shown on Slide 41, he pointed out that "wild-caught" messaging
resonates more with consumers than "sourced from the USA" or
"Alaska" alone. He highlighted the "Make the Wild Choice" ad
campaign that hosted a cooking contest and sweepstakes. He
emphasized the need for new recipes such as the popular fish
taco featured on Slide 43. He displayed the content of Slide
44, which read as follows, [original punctuation provided]:
Consumers across all generations--from Baby Boomers to
Gen Z--are now willing to spend more for sustainable
products.
11:43:16 AM
MR. WOODROW displayed the partnerships ASMI has with companies
such as Holland America, featured on Slide 45, and Princess
Cruises, shown on Slide 46. He directed attention to Slide 47,
"Japan," and played a short video about the international
importance of sustainability.
11:45:43 AM
MR. WOODROW concluded the presentation on Slides 48-51 by
providing online resources at www.AlaskaSeafood.org. He
reported the "Alaska Seafood U" program has been improved for
retailers, sales, and wait staff. He informed the committee the
supplier's network on the ASMI website has also been upgraded to
buyers with sellers.
11:47:33 AM
REPRESENTATIVE MCCORMICK highlighted the donated canned salmon
to Ukraine and asked whether something similar could be done for
struggling families in Alaska, specifically regarding the late
Supplemental Nutrition Assistance Program (SNAP) benefits.
MR. WOODROW emphasized ASMI would be a willing partner through
the Global Food Aid Program.
11:48:55 AM
REPRESENTATIVE C. JOHNSON inquired about new emerging products
like seaweed. He questioned whether ASMI had an outreach
program to remove barriers of entry into the seafood market.
MR. WOODROW answered that ASMI is prohibited from marketing
mariculture by statute but is looking to legislation in the
future to change that law.
11:50:32 AM
REPRESENTATIVE MCCABE asked whether the Alaska Railroad was a
big buyer.
MR. WOODROW offered to follow up at a later date.
11:51:46 AM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Fisheries meeting was adjourned at 11:52
a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| ASMI House Fisheries FEB 9 2023.pdf |
HFSH 2/9/2023 11:00:00 AM |
ASMI House Fisheries FEB 9 2023 |