Legislature(2011 - 2012)CAPITOL 120
02/21/2012 05:00 PM House FISHERIES
| Audio | Topic |
|---|---|
| Start | |
| Presentation: Alaska Seafood Marketing Institute (asmi) | |
| 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 21, 2012
5:07 p.m.
MEMBERS PRESENT
Representative Steve Thompson, Chair
Representative Scott Kawasaki
Representative Bob Miller
MEMBERS ABSENT
Representative Craig Johnson, Vice Chair
Representative Alan Austerman
Representative Bob Herron
Representative Lance Pruitt
COMMITTEE CALENDAR
PRESENTATION: ALASKA SEAFOOD MARKETING INSTITUTE (ASMI)
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
RAY RIUTTA, Executive Director
Alaska Seafood Marketing Institute (ASMI)
Juneau, Alaska
POSITION STATEMENT: Provided a PowerPoint presentation titled
"Alaska Seafood Marketing Institute."
BRUCE WALLACE, Member
Alaska Seafood Marketing Institute Board (ASMI)
Juneau, Alaska
POSITION STATEMENT: testified during the ASMI presentation.
ACTION NARRATIVE
5:07:19 PM
CHAIR STEVE THOMPSON called the House Special Committee on
Fisheries meeting to order at 5:07 p.m. Representatives
Thompson and Miller were present at the call to order.
Representative Kawasaki arrived as the meeting was in progress.
^Presentation: Alaska Seafood Marketing Institute (ASMI)
Presentation: Alaska Seafood Marketing Institute (ASMI)
5:08:05 PM
CHAIR THOMPSON announced that the only order of business would
be a presentation from the Alaska Seafood Marketing Institute
(ASMI).
5:08:49 PM
RAY RIUTTA, Executive Director, Alaska Seafood Marketing
Institute (ASMI), stated that the Alaska Seafood Marketing
Institute (ASMI) was a partnership between the State of Alaska
and the seafood industry, and had been in existence for more
than 30 years, with its primary mission to market seafood.
Directing attention to slide 2, "The Codfish," he read the ditty
and exclaimed that "it pays to advertise." Moving on to slide
3, "Alaska's Seafood Industry," he declared that the seafood
industry was "big business in Alaska ... for the most part, we
pay our own way." He declared that many taxes were assessed on
the industry, and that about half the ASMI budget was based on a
one half percent tax on the price the processors paid to
fishermen. He reported that the other half of the budget was
secured in a match with the industry, declaring that this
leveraged "marketing access program funds" to support the
international marketing efforts. He explained that the three
sources, industry funds, state funds, and federal marketing
funds, comprised the ASMI budget. He shared that the fishing
industry, in 2009, had generated more than $4.6 billion in
economic value, was the major employer in Alaska, and had
contributed more than $1.45 billion in labor and income.
5:11:12 PM
MR. RIUTTA stated that Alaska was the dominant seafood producer
in the United States, with more than half the seafood produced
for market. He shared that, in 2010, the Alaska fish harvest
was the 11th highest since statehood.
5:11:55 PM
MR. RIUTTA addressed slide 4, "U.S Per Capita Protein
Consumption 2009," and compared fish consumption with that of
beef, pork and poultry. He noted that only 16 pounds of seafood
was consumed per capita in the U.S. and he conjectured that
people would experience an improvement in health if more fish
products were consumed. He shared that Alaska produced about 90
percent of the salmon in the U.S., but only 12 percent in the
global market. He pointed out that a lot of the global
production was farmed fish from Chile, Canada, and Norway.
Alaska produced about 2 percent of the global market for all
seafood. He clarified that this necessitated for ASMI to market
itself as an entity, not a commodity, in order to command a
better price.
5:13:31 PM
MR. RIUTTA moved on to slide 5, "Alaska Seafood Production By
Type," a graphic indicating the species value versus volume, and
pointing to black cod, halibut, shellfish, and salmon as higher
value-to-volume products. Each of these stood on their own as a
product, as opposed to being an ingredient. He declared that
the fishing industry had a high impact on the economies of rural
communities, slide 6, "Impact on Rural Communities." Referring
to slide 7, "What is the Alaska Seafood Marketing Institute?",
he explained that ASMI was a partnership between the state and
the industry, and its job was to market Alaska seafood. He
reported that ASMI had a Board of Directors, comprised of five
processors and two commercial harvesters, who were appointed by
the governor.
5:15:50 PM
MR. RIUTTA indicated slide 8, "ASMI Mission Statement," and
declared that ASMI was focused on increasing the economic value
of Alaska seafood and maintaining market access. He showed
slide 9, "Lead by Industry," which listed the Board of
Directors. He noted that ASMI also had a Customer Advisory
Panel which advised on how best to approach the marketplace.
5:17:16 PM
MR. RIUTTA, reflecting on slide 10, "ASMI Builds 'Alaska'
Brand," said that AS 16.51.110 required that ASMI promote every
Alaska product equally, not by brand or region. He noted that
sustainability, as defined in the Alaska State Constitution, was
a basis for Alaska seafood products.
5:18:10 PM
MR. RIUTTA shared slide 11, "The Alaska Brand," which listed the
consumer descriptors associated with Alaska seafood. Directing
attention to slide 12, "Alaska Seafood Audience," he said that
although the Baby Boomer Generation was the target audience,
Generation Y had been recently added as a target group. He
indicated slide 13, "ASMI Domestic & International Programs,"
and described the six marketing programs: retail, foodservice,
international, consumer public relations, seafood technical, and
global food aid.
5:20:50 PM
MR. RIUTTA discussed the domestic retail marketing program,
slides 14 and 15, which worked to align the Alaska Seafood
Industry with retailers across the US, and support their sales
and marketing programs through in-store promotions, consumer
advertising, public relations, and trade advertising. He
described other advertising strategies, including co-branding
with Alaskan Brewing Company and partnering with individual
stores.
5:23:05 PM
MR. RIUTTA described the ASMI work in domestic foodservice
marketing, slides 16 and 17, with restaurants, universities,
chef networks, and broad line distributors to promote Wild
Alaska Seafood products.
5:24:46 PM
MR. RIUTTA shared some activities that ASMI cooperated in to
promote Alaska seafood on campuses, slide 18.
5:25:50 PM
MR. RIUTTA said that international marketing was paying off in
key markets, including Japan, the European Union, Brazil, and
China, slides 19 and 20. He declared that this marketing was
only limited by the money.
5:26:26 PM
MR. RIUTTA stated that the Alaska Canned Salmon Global Food Aid
program, created in 2005, had brought canned salmon to areas of
need, slide 21. He shared that many countries which had
received salmon through food aid programs were now buying ASMI
products.
5:27:17 PM
MR. RIUTTA discussed slide 22, "Seafood Technical," which
outlined the technical program for guidance to the seafood
industry in food safety, quality, nutrition, food labeling,
environmental issues, and cargo handling. He stated that this
technical program, focusing on sustainability, offered guidance
from point of harvest to the end user. He moved on to slides 23
and 24, "Communications," and said that the communications
program supported the marketing staff in its outreach. He
shared the many materials available, including recipe cards,
cookbooks, and training materials. He shared the development of
Alaska Seafood University, and its on-line courses, which had
been incorporated into the training for many of the large retail
chains.
5:30:49 PM
MR. RIUTTA moved attention to slides 25, 26, and 27, which
depicted Seafood shows and Expositions around the world. He
said that a partnership with Rei Munoz and her artwork had
helped to make the seafood show in Boston a success in 2010. He
described that the largest seafood show in the world was in
Brussels, Belgium, which had garnered $634 million in projected
sales for ASMI. He discussed some of the other international
events including Hong Kong, Poland, and Germany.
5:33:10 PM
MR. RIUTTA briefly mentioned that the social media programs on
You Tube, twitter, tumblr., and Facebook, slide 28, were
important to get the message out to the Generation Y audience.
5:34:03 PM
MR. RIUTTA discussed some of the "Recent Challenges," slide 29.
He pointed to price resistance, growth in farmed salmon,
currency fluctuations, and world economics as challenges to
ASMI.
5:34:50 PM
MR. RIUTTA directed attention to slides 30, 31, and 32, noting
the attacks on Alaska salmon producers when they withdrew from
the MSC certification process in January 2012. He summarized
that Alaska had been with the MSC (Marine Stewardship Council),
which certified seafood as sustainable, for more than 10 years.
He reflected that the Alaska salmon producers had asked ASMI to
refocus its efforts for an alternative to the MSC
recertification. He explained that the new certification was
defined by the FAO (Food and Agriculture Organization of the
United Nations) code of conduct for responsible fisheries
management, and the ISO 65 standards, the toughest certification
standards in the world. He declared that this had resulted in
"quite a pushback by both the MSC and a number of their sponsors
since we brought that program to market, claiming it's not
equivalent, it's not worthy, it's a step backward for the
sustainability movement, and a lot of other things."
5:36:11 PM
MR. RIUTTA provided a quote, slide 31, from Mike Sutton, of the
Monterey Bay Aquarium and a founder of MSC. "Alaskans are going
to regret the path they are trying to go down." He reported
that there was now a concentrated effort to discredit the Alaska
hatchery program which was a model for world hatcheries.
5:37:19 PM
MR. RIUTTA explained the issues, slide 32, with MSC and why
Alaska had withdrawn. He said that market access had become
restricted, as MSC certification was now necessary in some
states and countries. ASMI had viewed this as a long term
problem, because MSC was influenced by its funders, which
included the World Wildlife Fund and other non-governmental
organizations (NGO). He noted that ASMI had developed the
Alaska Seafood brand, and did not want to be swallowed into the
MSC brand. He mentioned other associated cost increases by the
MSC.
5:38:51 PM
MR. RIUTTA provided a flow chart, slide 33, "What should be the
role of the NGO?" to define what ASMI would like to see as the
role of an NGO. He pointed out that the fishery governance
decisions were controlled by legal mandates, FAO guidance, the
competent authorities, the stakeholders, and the NGOs. After
the decisions for governance were made, they were imposed on the
fishery and the fishermen. The fishermen then had the option of
selling to the processor, or producing and direct marketing
their own product. He pointed out that the certification
programs had been established for enforcement prior to the sale
to the market, and these certification products were becoming
mandatory. He clarified that this mandatory requirement gave
NGOs greater influence over fisheries governance. He
acknowledged that in areas of bad governance, this was
effective, but that in Alaska, with strong governance, this kept
the standards in flux. He shared that the biggest concern of
the seafood industry was that NGOs could stop fisheries from
sending their product to market, without the NGO having to
participate in the governance process. He stated that
governments should have the responsibility for establishing
certifications. He listed some of the disagreements with the
MSC, including its proposed separation of hatchery and non-
hatchery fish, and separation into multiple geographic regions.
He declared that Alaska could take care of any fisheries
management problems, if they arose, as it was the "law of the
land." He declared that the current certification program was
"absolutely adequate and it gets the job done." He agreed that
the MSC had a role, but that it should not interfere, as "a
single private entity who has their own private standard, to
give them the sole authority to decide who can sell seafood to
the public and who cannot, is problematic in the view of the
industry." He declared a need for competition in the
marketplace, slide 34.
5:44:43 PM
REPRESENTATIVE KAWASAKI asked if there were other states,
countries, or nations that were removing themselves from the MSC
labeling system.
MR. RIUTTA replied that no others were currently leaving MSC,
although not every country had entered into it. He reported
that Alaska was now using the same program as Iceland,
Responsible Fisheries Management Certification. He noted that
Canada, and a few other countries, were also contemplating the
Alaska model for certification processes as an alternative to
the MSC.
5:45:39 PM
REPRESENTATIVE KAWASAKI asked, as the Canadian fishery used more
farmed fish, why it had not left the MSC.
MR. RIUTTA explained that this certification was for wild
capture fisheries, and that there was a separate certification
for farmed fish.
MR. RIUTTA, in response to Representative Kawasaki, said that
MSC was the best known certification program for wild capture
fisheries. He shared that Alaska salmon fisheries were
concerned that MSC would become the sole gate keeper to the
market. He explained that Alaska had returned to the source of
the certification programs, the FAO code of conduct for
responsible fisheries management, which had been developed by
more than 70 nations. He shared that MSC had increased this
standard and its application, but that it was a changing
standard without any return to the agreed upon FAO code.
5:48:26 PM
MR. RIUTTA, in response to Representative Miller, stated that
MSC were the initials for the Marine Stewardship Council, and
FAO were the initials for the Food and Agricultural Organization
of the United Nations.
REPRESENTATIVE MILLER asked for an update to the labeling for
genetically modified, or farmed, fish.
MR. RIUTTA offered his belief that although labeling was not
nationally required, Alaska did require it. He pointed out that
consumer demand was to know the origin of the product. He said
that this was a current discussion in the U.S. Congress.
5:50:25 PM
MR. RIUTTA, in response to Representative Kawasaki, explained
that Germany and the United Kingdom (UK) were strongholds for
the MSC certification, as Germany especially was "heavily
influenced by green environmental groups," and retailers were
required to have MSC certification in order to market wild
capture seafood. He acknowledged that this represented a
problem for Alaska seafood marketing in Germany, and that Alaska
needed to educate these countries that Alaska was the gold
standard for salmon fisheries management. He shared that only a
few retailers in the U.S. had insisted on MSC certification,
while most preferred the FAO designation, in lieu of any eco
labels, which allowed an inclusion with their corporate social
responsibility programs. He explained that the Magnuson -
Stevens Fishery Conservation and Management Reauthorization Act
was a requirement for sustainable seafood, hence any fishery in
the U.S. had already been certified by law. He shared a concern
that more countries would not buy Alaska seafood without the MSC
certification, which he described as a "moving bar." He opined
that the initial MSC certification was "a really good balance
between industry and the environmental world to try to ensure
that all the world's fisheries were sustainable using market
pressure" but that it had "begun to tilt" so that the seafood
industry felt it had no input to the process.
5:54:49 PM
MR. RIUTTA returned attention to slide 36, which illustrated
that the value of key commercial species had increased from 2004
to 2010, with the exception of 2009. He pointed out that the
value of Alaska salmon had increased every year from 2002 to
2010, and although not on the graph, he shared that "the 2011
numbers were even better." He reported that this increase was
directly attributable to investment incentives and the Joint
Legislative Salmon Industry Task Force in 2002. He noted that
aggressive marketing and investment in changes to the industry
had given rise to the value of the canned and fresh products and
stabilized the salmon market. He noted that ASMI performance
was measured by the ex-vessel price of fish.
5:57:40 PM
MR. RIUTTA moved on to slide 37, a graph depicting consumer
advertising and public relations campaign expenditures. He
pointed out that, as funding had diminished, ASMI had focused on
consumer public relations campaigns and, most recently, social
media. He noted that the lower graph reflected the consistency
of Alaska seafood exports for value and volume since 2004.
5:59:27 PM
MR. RIUTTA discussed slide 38, which reflected the sources of
allocation for ASMI funding, including Federal Market Access
Program (MAP), Seafood Assessment Tax, and State General funds.
He expressed concern to the future cancellation of the MAP
program, and those consequences for ASMI.
6:00:05 PM
REPRESENTATIVE KAWASAKI asked if the MAP funding was related to
the state general fund match.
MR. RIUTTA confirmed that the MAP funding was tied to the state
funding, which was a combination of industry and general funds.
He repeated the funding sources he had described earlier: the
seafood industry self-assessment tax, and state general funds,
which were used to leverage the MAP funds.
6:01:25 PM
REPRESENTATIVE KAWASAKI asked if ASMI had taken advantage of
every available federal dollar. He asked if MAP funding was
capped.
MR. RIUTTA replied that MAP funding was capped at $200 million,
and that ASMI was leveraging this funding as heavily as
possible.
6:02:29 PM
MR. RIUTTA directed attention to slide 39, which provided the
ex-vessel value trend versus the ASMI funding trend, and he
noted the fairly parallel trend lines on the graph. He
concluded that reasonable investments in advertising increased
the overall value of the seafood harvest.
6:03:29 PM
MR. RIUTTA analyzed slide 40, the FY 2012-2012 budget figures,
by component, and he pointed out that although ASMI expected to
receive about $500 million less in MAP funding, the seafood
industry and general funds should cover the loss. He moved on
to slide 41, "FY13 Governor's Operating Budget," which depicted
the ASMI expenses.
6:05:26 PM
MR. RIUTTA, in response to Chair Thompson, agreed that,
initially, it would probably be more costly to market Alaska
seafood in Europe without the MSC certification.
CHAIR THOMPSON offered his belief that ASMI was a very
successful program, and that it was necessary to educate the
markets that Alaska's seafood standards exceeded those of MSC.
MR. RIUTTA agreed, stating that both standards accomplished the
same thing, both were good programs, and that it was all about
sustainable seafood. He said that the new program in Alaska,
Responsible Fisheries Management, was based on the FAO code, and
that Alaska had gotten the idea for this alternative from
Iceland.
6:08:54 PM
BRUCE WALLACE, Member, Alaska Seafood Marketing Institute Board
(ASMI), commented that the shift from the MSC certification had
been discussed extensively among the United Fisherman of Alaska.
It had been generally agreed that it was not acceptable to allow
an NGO to determine the MSC certification. He clarified that
the fishermen had agreed with the fish processors to make this
change.
6:10:29 PM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Fisheries meeting was adjourned at 6:10
p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| ASMI Overview with budget.pdf |
HFSH 2/21/2012 5:00:00 PM |