ASMI - Alaska Seafood Marketing Institute

Alaska SeafoodMarketing Institute

Message from the Chair of theBoardAlaska’s seafood industry is undergoing dramatic and permanentchange. As in most sectors of American business, Alaska seafoodhas seen tremendous consolidation, driven by increased worldwidecompetition and changing consumer preferences. As a result of thisconsolidation the remaining companies are stronger and better able tocapitalize on the changing consumer and the new manufacturing climate.In recent years seafood processing companies have made significantprogress toward the goal of becoming modern market-driven foodproduction operations, and are producing more value-added products formore different markets around the world than ever before.The public-private partnership of Alaska Seafood Marketing Institutehas been rejuvenated by active participation of seafood industry leadersand the support of the State of Alaska through the Alaska FisheriesRevitalization program. By exploiting the partnership of the industry andthe state, the Alaska Seafood Marketing Institute has been able to fieldhighly effective promotional activities that have helped drive up the valueof the products Alaska has to offer.These are exciting times for the Alaska seafood industry, forharvesters and processors, and for the many communities – small townsand large cities – that depend on the industry for economic survival. Ourfisheries resources are abundant, managed for sustainability, and offer asource of delicious and healthy food to people around the world. We aremeeting the challenge of providing the products that today’s customerswant, and providing them in an environmentally friendly way, so thatbusinesses can plan on having a supply of Alaska seafood for generationsto come. As ASMI celebrates 25 years of service to the industry andto Alaska, we look forward to our future successes in promoting WildAlaskan Seafood.Sincerely,Mark Palmer, ChairBoard of Directors

Message from the ExecutiveDirectorThis year marks a quarter century of service to the Alaska seafoodindustry by ASMI. This unique partnership has weathered a number ofstorms over this time and is in a strong position going forward. Mostimportantly, our brand, Alaska Seafood, is one of the strongest seafoodbrand names in the world, something ASMI can rightfully take a largeshare of the credit for creating. Persistent, targeted messaging aboutAlaska Seafood has gained a strong foothold in a very competitiveworld market.At a time when sustainability is catching on in the global marketplace,we are proud to point out that Alaska Seafood is the world leader insustainable seafood. Since statehood, Alaska, through its progressiveand forward looking seafood management practices has been ensuringAlaska’s seafood stocks will be here for the generations to come; in fact,this concept is enshrined in our State Constitution. It is gratifying tosee the rest of the world embracing this long standing Alaska seafoodmanagement principle, to which the Alaska seafood industryis committed.This year, for the first time in over a decade, the Alaska Legislaturejoined with the Governor to provide state general funds to help ASMIconduct its very important work on behalf of all who harvest and processAlaska seafood products. This action renews a vital partnership betweenthe State of Alaska and its seafood industry; it ensures we will continueto get the word out about our great products and help Alaska’s seafoodindustry remain competitive in a very demanding world market.The visionaries that founded ASMI 25 years ago were giants in theindustry and forward thinkers. Three of the original industry membersinvolved, Al Burch, Ron Jolin and Jeff Stephan, continue to serve ASMIto this day. We owe these fine people, along with the hundreds that havevoluntarily served on ASMI boards and committees over the years, a debtof gratitude for giving so much of their time and intellect for the goodof the Alaska seafood industry. It is because of people like these thatASMI has been able to make a positive difference in the market place andestablish Alaska Seafood as a proud and highly respected brand whereverseafood lovers gather.These are exciting times for the Alaska seafood industry and ASMIwill have a very important role to play in the years ahead just as it hasfor the last quarter century, in promoting the great seafood products thatcome from the bountiful waters of Alaska.Ray RiuttaExecutive Director

What is Alaska SeafoodMarketing Institute (ASMI)A Partnership of Public and Private SectorsEstablished 25 Years AgoThe Alaska Seafood Marketing Institute (ASMI) was createdtwenty-five years ago as a cooperative partnership between theAlaska seafood industry and state government to advance themutually beneficial goal of a stable seafood industry in Alaska.It is Alaska’s official seafood marketing arm, and is establishedunder state law as a public corporation.

NewWhat’s new at ASMI?Agency structureLegislative action in 2004 streamlined the agency, reducing thesize of the board and facilitating more effective alignment with theseafood industry.Streamlined boardA new seven-member board replaced the 25-member board, andimproved alignment between the marketing efforts of ASMI and theseafood suppliers.New board appointmentsIn May 2004 Governor Frank Murkowski named five processors andtwo commercial harvesters to the ASMI board.

NewRedefined mission: increase economic valueThe Alaska Seafood Marketing Institute is a marketing organizationwith the mission of increasing the economic value of the Alaskaseafood resource through• Increasing positive awareness of the Alaska Seafood brand• Collaborative marketing programs that align ASMI andindustry marketing efforts for maximum impact within thefood industry• Long-term proactive marketing planning• Quality assurance, technical industry analysis, education,advocacy and research• Prudent, efficient fiscal managementExpand exploration of new marketsAgressive pursuit of new opportunities in Asia, Europe and theU.S., including the U.S. Hispanic market.

NewEmphasis on consumer campaignsEffective consumer campaigns aligned with marketing effortsof suppliers provide efficient, cost effective service to Alaska’sseafood industry.Special allocations of federal funding through GovernorMurkowski’s Fisheries Revitalization Strategy and the AlaskaFisheries Marketing Board helped finance the launch of nationalconsumer campaigns in the U.S. The campaigns cover the fullrange of Alaska seafood products.Leading U.S. campaigns• Cook it Frozen• Hispanic canned salmon campaign – introducing cannedsalmon to new usersRaise volume, value of exportsIncrease volume and value of Alaska seafood exports to specificcountries in which ASMI is active— Western Europe, NorthernEurope, United Kingdom, Southern Europe, Japan and ChinaBoost sales of frozen seafood in the U.S.Stimulate sales of frozen salmon and other Alaska productsduring the “shoulder season”Research prospects for additional marketdevelopment in E.U., China and eastern europe

AccomplishmentsASMI’s New WebsiteASMI’s new website launched in early 2006. There are resourceson the website for processors and harvesters, retailers, chefs,foodservice operators, dietitians, and consumers. Members ofthe Alaska seafood industry have access to special promotionalresources, a long-range calendar of promotions, advertisingplacements and trade shows, image library, market research, andindustry e-newsletters.Fleet earnings in the Alaska salmonfishery have recovered significantlyin the last three years. According torevised ADF&G data released thisSpring, harvester earnings in the 2005Alaska salmon season totaled $334million, more than double the lowpoint of $162m in 2002.11

ResultsIncreased ex-vessel value of salmonThe price paid to fishermen doubled in three years to more than$300 millionBoosted volume and value of pink salmonIncreased sales volume and value reflect promotional effort;market data show increased sales in six of the seven U.S. marketswhere the Hispanic canned salmon campaign was conductedIncreased ex-vessel value of key commercial speciesThere was volume sales growth of cod, halibut, and salmon in theU.S. with frozen salmon sales up 18.7% in 2004 over same periodin 2003, through a Cook it Frozen consumer campaign.13

ResultsIncreased export volume and valueAlaska Seafood exports to the world increased 48% by value and74% by volume (aggregate) from 2000 to 2005.Exports of Alaska Seafood to countries where ASMI is activeaccounted for 70% of the total by value, and 74% by volume.14

ResultsIncreased popularity of surimi in the European UnionMore fresh and frozen salmon and salmon fillets goinginto Europe and the United Kingdom.Total Alaska harvest of groundfishand flatfish rose slightly in 2005,up from 2.12 million MT in 2004 to2.14 million MT in 2005.ASMI’s Alaska pavilion in Europe’s largest tradeshow generated projected sales over 12 months ofover $106 million for 15 participating Alaska seafoodcompanies.Leveraged the value of corporate partnershipsASMI has achieved increased use and awareness of the AlaskaSeafood brand and companion brands through developing itsrelationships with grocery retailers, restaurant operators andfoodservice distributors at the corporate level.15

ResultsSalmon fleet participation hasincreased substantially with therebound in salmon value. The numberof salmon permits fished rose 863 (13percent) from 6,645 in 2002 to 7,508in 2005.Earned respect in the marketplace for the AlaskaSeafood brandBuilt brand equity for Alaska Seafood through relationships builtby ASMI and as a result of educating retail seafood managers,chefs, restaurant operators, foodservice distributors and seafoodbuyers about Alaska Seafood.In the U.S. 77% of restaurant diners have a positive impression ofthe Alaska Seafood brandThe Alaska Seafood brand is the second most popular food brandon menus of the top 500 U.S. restaurant chains, up from thirdplace in 20012nd Place -This is up from 3rdplace in 2001!Source: DatassentialResearch 200416

ResultsThe message is out on Alaska SeafoodThrough consumer advertising and branded campaigns, morepeople than ever before are being exposed to the brand and tokey messages. “Alaska” signifies wild, natural, unparalleledflavor, superior quality, sustainability, versatility, ease ofpreparation, and healthfulness.Bering Sea crab stocks harvestedin 2005 was just under 24,000MT, consistent with the previousthree years. For 2006, statewideallowable catch of Alaska crab showsan increase to approximately 28,000MT.17

Fisheries Revitalization Strategy ReportASMI and Alaska’s FisheriesRevitalization StrategyGovernor Frank Murkowski initiated the Alaska FisheriesRevitalization Strategy to address the needs of those affected by aneconomic downturn in the salmonfishing industry and to stimulateprofitability in the seafood industry.The multi-year strategic effort wasfunded utilizing $50 million infederal funds, obtained through theefforts of the state’s congressionaldelegation. Many Alaska seafoodcompanies received allocationsof funds for product innovationand supporting sales of new valueadded products in the marketplace.$4.5 million of the FisheriesRevitalization Strategy is dedicated to special promotions throughthe Alaska Seafood Marketing Institute. These project monies wereaugmented by allocations of federal funds by the Alaska FisheriesMarketing Board.Cook it FrozenThe Alaska seafood industry wished to boost sales during the fall“shoulder season,” when frozen products present an excellentoption for consumers, so ASMI initiated a $1.4 million Cook itFrozen media campaign, aligned with the seafood industry’s salesefforts, to educate consumers about eating frozen seafood. Salesat retail grocery stores were supported by chef demonstrations,celebrity sales support including streaming video on the Cookit Frozen website, newspaper articles with Alaska seafoodrecipes, colorful point of purchase materials for more than3500 participating stores, radio ads (13 major market areas),and billboards for Wild Alaska Salmon in Seattle, Portland, andWashington, D.C.18

Fisheries Revitalization Strategy ReportCanned/Shelf Stable Alaska Salmon ProductsLaunched in April 2005, this $2 million, two-pronged consumercampaign was aligned with the sales efforts of Alaska seafoodsuppliers. It included radio ads, consumer shows, point ofpurchase materials inEnglish and Spanish,demonstrationsin grocery stores, aTV broadcast segmentin Spanish starringa Hispanic celebrityspokesperson, and a consumer sweepstakes with an Alaskacruise as the grand prize. The campaign was geared towardmoving traditional canned salmon, and successfully extended themomentum of the annual spring sales season, while at the sametime carving inroads into the growing Hispanic market in the U.S.Consumer Advertising CampaignFisheries Revitalization Strategy funds, combined with federalfunding obtained from the Alaska Fisheries Marketing Board hasenabled ASMI to field a national advertising campaign in food andlifestyle publications. The magazine ads focus on different speciesseasonally (salmon, canned salmon, black cod, crab, cod & pollock)or highlight previously frozen seafood. The campaign is alignedwith industry marketing efforts. The ads appear in publicationsread by consumers matching the Alaska Seafood demographic, andby many chefs.19

ASMI & AFMB Funds ReportASMI expenditure of fundsreceived from Alaska FisheriesMarketing BoardThe Alaska Seafood Marketing Institute, a public-privatepartnership between the State of Alaska and the Alaska seafoodindustry, received Saltonstall-Kennedy funding through the AlaskaFisheries Marketing Board.The Saltonstall-Kennedy program was established by the U.S.Congress to provide financial assistance for projects to strengthenthe U.S. fishing industry, and the fund source is duties and tariffson imported fish and fish products.Alaska Seafood Marketing Institute is using $6.5 million in fundingreceived through AFMB for a multi-year national consumercampaign that includes advertising, publicity, internet resourcesfor consumers, retail grocery and foodservice promotions, tradeeducation and research.The attention focused on Alaska seafood marketing during the pastthree years has had a measurable effect. Millions of Americanshave been exposed to favorable messages about Alaska Seafood.Demand for most products has increased markedly, new marketsare being developed, and prices paid to the producers for a numberof products are improving, thus strengthening the U.S. seafoodindustry in the face of a tide of cheap foreign imports.20

ASMI & AFMB Funds ReportHighlights• Media coverage of Alaska seafood products, particularlysalmon, has been favorable. Hundreds of favorable mentionshave occurred in magazines, newspapers, radio, television, andon the internet.• The consumer advertising campaign included ads in Sunset,Cooking Light, and Bon Appetit as well as some advertisingin foodservice trade publications. The series of ads targetedAmerican consumers and professional cooks, and stimulatedfurther demand for Alaska seafood products.• The Alaska Seafood brand became the second most popularfood brand on menus of the top 500 restaurant chains − theresult of ASMI programs to educate key corporate executivechefs and conduct promotions with high-profile foodserviceoperators and foodservice distributors.• Sales of Alaska Seafood through retail grocery stores receivedadditional lift from ASMI promotions. Support for the retailpromotions includes merchandising guidance, special couponoffers, advertising, cooking demonstrations, cooperativepartnerships with national brands, Alaska Seafood promotionsat consumer shows and events, internet website enhancementscatering to consumers, and development of emerging marketssuch as the U.S. Hispanic market.Products promoted were wild Alaska seafood products:• salmon (fresh, frozen and canned)• whitefish varieties (Alaska Pollock, sole, rockfish, halibut, blackcod, Pacific cod) and surimi seafood.• shellfish (three kinds of crab, other shellfish including scallops,shrimp)21

HistoryASMI HistoryASMI was established in 1981 as a cooperative endeavor ofindustry and state government to stabilize the economics of theseafood industry. Twenty-five years later it has successfully builtthe Alaska Seafood brand and works to increase the value ofAlaska’s seafood harvest.ASMI History in a NutshellAlaska’s Seafood Industry Steps to the PlateWhen ASMI was created, seafood processing companies electedto tax themselves to fund the program; for many years, they paidan assessment of .3% of the value of all seafood species theyprocessed. The board included members of both the fishing andprocessing sectors. In 1993, the legislature enacted a 1% salmonmarketing tax to be paid by commercial fishermen. More fishermenwere added to the board of directors, resulting in a 25-memberboard. The legislation establishing the salmon marketing taxpaid by fishermen was up for renewal after five years, and wasreinstated in 1998, thanks to support from commercial fishermen.Federal Support for International MarketingThe first federal funds to support the marketing activities overseaswere received in 1988, allowing promotional efforts to expand fromthe United Kingdom to Japan and France. Australia joined the mixin 1992, as did Italy, Korea, and The Netherlands. Four years later,Belgium, China, Taiwan, and Hong Kong were added tothe program.The international program, which is made possible by theassistance of the Market Access Program operated by the U.S. Dept.of Agriculture (USDA) Foreign Agricultural Service now spans theJapan, China and the European Union, with concentrated activityin Northern, Southern and Western Europe. Russia has recentlybeen added to the list of emerging markets.22

HistoryHelping Hands from Washington, D.C.A new three-year campaign to promote Alaska salmon in the U.S.was begun in 2000; thanks to the guidance of U.S. Senator TedStevens, the U.S. Congress appropriated $5 million in funding forthis purpose under the Trade Adjustment Assistance Act to help thesalmon industry in Alaska.Thanks to the efforts of the Alaska Congressional delegation, andSenator Ted Stevens in particular, funds to assist the Alaska seafoodindustry were allocated to the State of Alaska and to a newlycreated Alaska Fisheries Marketing Board. During the last few yearsASMI has received funds through both of these sources to aid itsmarketing efforts, successfully increasing the visibility of the AlaskaSeafood brand in the U.S. (See pages 20-21.)Newly Streamlined, Aligned with Industry,Moving AheadFollowing two years of work by a task force comprising membersof the seafood industry and the Alaska State Legislature, a newlaw was enacted to restructure ASMI, trimming the board toseven members (five processors, one of them a small processor,and two commercial harvesters). The law eliminated the 1%salmon marketing tax paid by salmon harvesters. It also requiredprocessors to vote on whether to retain ASMI and on whether ornot to increase their tax contribution for marketing. The processorsvoted in the fall of 2002 to continue the marketing program, and toraise their tax to the equivalent of .5% of the value of the catch.The board of directors is invested in the marketing mission withrenewed vigor, and works to ensure that ASMI promotionalactivities complement those of the seafood suppliers. The successachieved so far in building the Alaska Seafood brand is attributableto the guidance of many industry leaders over the past quartercentury: harvesters and processors named by the governor to theboard of directors, and many experts tapped by the board to serveon advisory committees. All have committed their intelligence andcreativity to this effort, and have helped to advance the AlaskaSeafood brand.23

HistoryMembers of Past Boards of DirectorsAlaska Seafood Foundation – the ASMI PioneersThe Alaska Seafood Foundation was established in anticipation of the lawestablishing ASMI. These people pioneered the ASMI effort, with a small staffheaded by Eric Eckholm, the first executive director.Jim Beaton, American Eagle SeafoodsBob Blake, Cordova Aquatic Marketing Assoc.Frederic Bolthouse, Pacific Pearl SeafoodsAlec Brindle, Ward’s Cove Packing Co.-served continuously, resigning in 1999Robert F. Brophy, Icicle Seafoods, Inc.Jay S. Gage, Peter Pan SeafoodsRon Jolin, United Fisherman’s Marketing Assn.John B. Martin, Alaska Food CompanyRobert F. Morgan, Morpac, Inc.Dan O’Hara, Bristol Bay Native Assn.David Osterback, Peninsula Marketing Assn.J. Richard Pace, Universal Seafoods, Ltd.Darryl K. Pederson, Seawest Industries, Inc.John G. Peterson, Ocean Beauty AlaskaJake Phillips, Alaska Longline Fishermen’s Assn.Denton Sherry, Whitney Fidalgo SeafoodsJohn K. Sjong, Trans-Pacific Intl. Inds.William Woods, Pan-Alaska Fisheries24

HistoryAll of the individuals listed below were appointed by the Governor of Alaska toseats on past ASMI boards of directors. Their service to Alaska and the Alaskaseafood industry established the foundation we build on today.Jim BeatonBob BlakeFrederic BolthouseAlec BrindleRobert F. BrophyJay S. GageRon JolinJohn B. MartinDan O’HaraDavid OsterbackJ. Richard PaceDarryl K. PedersonJohn G. PetersonJohn K. SjongWilliam WoodsW. H. “Nick” NicholsDan RearNels Anderson, Jr.William G. SaleticJeffrey R. StephanThomas E. ThompsonVictor W. Horgan, Sr.Larry M. KanerRoseleen L. “Snooks” MooreBruce “JB” J. CrowBart EatonDuncan A. FentonRonald E. HeggeCharles H. BundrantOscar DysonTerry GardinerDexter KyleTom SteinbachGeorge SullivanEric EckholmGreg FavrettoSandra CesariniGary D. ErvinLaurence IrvingRobert L. ScottConnie YoshimuraBob WaldropCheryl SuttonHarold ThompsonDave HarvilleBill KingMargaret BransonRonald SparksDavid WilderGerold S. Gugel, Jr.Rodger A. PainterJames HemmingJohn R. SwansonBen A. StevensRobert D. SchellJames KallanderCecilia A. AngasanNels AlexieCharles W. TreinenDennis DelayeLarry HillBill TerharGordon JacksonJack SchultheisHeather McCartyErik BreivikJohn SevierJames ShaniganSherry TuttleDoug Van DevanterJustine GundersonRose M. HeyanoStephen P. IvanoffPatrick BurdenJack AmonMitchell SeybertRobert NickinovichGloria ChythlookMike CusackGig DeckerJamie RossJay StinsonGary SlavenSandro LaneJohn SalleVirgil UmphenourJames ShaniganMichael VanNoteSteve ChartierL. John Iani25

FinancialsFY 04 REVENUES (in $000s)Reserve forward $4741% Marketing Tax $1,9430.3% Industry Assessment Tax $2,875MAP Federal Grant $3,221EDA Grant $894SK Grant/AFMB $1,000Total $10,407FY 04 EXPENDITURES (in $000s)Admin/Consolidated Costs $792Seafood Technical $216Public Relations $343Foodservice $1,343Retail $1,766International $4,210EDA Grant/Domestic $894Total $9,56426

FinancialsFY 05 REVENUES (in $000s)Reserve forward $3651% Marketing Tax $2,4000.3% Industry Assessment Tax $3,400MAP Federal Grant $3,741SK Grant/AFMB $1,500AK Fish Revit.-Canned Salmon $1,400AK Fish Revit.-Cook it Frozen $1,400Alaska Fish Marketing Board $2,200Total $16,406FY 05 EXPENDITURES (in $000s)Admin/Consolidated Costs $1,205Seafood Technical $236Public Relations $500Foodservice $2,035Retail $2,564International $4,600Canned Salmon Promo $1,600Cook it Frozen Promo $1,400Roe Herring Japan $5Total $14,14527