Legislature(2023 - 2024)GRUENBERG 120

02/09/2023 11:00 AM House FISHERIES

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11:07:28 AM Start
11:08:51 AM Presentation(s): Update on Alaska's Seafood Market
11:51:46 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Please Note Time Change --
+ Presentation: Update on Alaska's Seafood Market TELECONFERENCED
by Jeremy Woodrow, Exec. Dir.,
Alaska Seafood Marketing Institute
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
              HOUSE SPECIAL COMMITTEE ON FISHERIES                                                                            
                        February 9, 2023                                                                                        
                           11:07 a.m.                                                                                           
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                                                               
        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                                                                         
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                                                               
     FY23 Budget Authority                                                                                                      
     Seafood Marketing Assessment                                                                                             
     $15,932,800 (0.5% of ex-vessel value)                                                                                      
     Federal Funds                                                                                                            
          • 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                                                                                                            
          • 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:                                                                                         
     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                                                               
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                                                               
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                                                               
     • 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                                                                        
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                                                                     
     $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                                                               
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                                                               
11:30:20 AM                                                                                                                   
MR. WOODROW highlighted  the bullet point from  Slide 23, "GLOBAL                                                               
COMPETITION,"  which  read   as  follows,  [original  punctuation                                                               
     • Opportunities & Challenges                                                                                               
       not unique to Alaska Seafood                                                                                             
     • Norwegian Seafood Council                                                                                                
       global budget 3x larger than                                                                                             
     • 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                                                               
11:32:40 AM                                                                                                                   
MR.  WOODROW  continued the  presentation  on  Slide 27,  "Global                                                               
Marketplace,"  which  read   as  follows,  [original  punctuation                                                               
     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                                                               
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                                                                      
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                                                                                                                   
There being no further business before the committee, the House                                                                 
Special Committee on Fisheries meeting was adjourned at 11:52                                                                   

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