Commercial fishing businesses in Louisiana, striving to survive years of low prices for their catch and a safety scare following the BP oil spill in the Gulf of Mexico, are hoping for a boost in demand when restaurants across the state are required to disclose imported shrimp and crawfish on their menus starting Sept. 1.
But already there is doubt that it will have much of an impact.
"There's a challenge because in Louisiana, domestic shrimp aren't harvested year-round," said Stan Harris, president of the Louisiana Restaurant Association.
As a result, it's difficult for restaurants to sell Gulf Coast shrimp all year without developing direct relationships or buying frozen shrimp up front, he said. "In my view, this legislation isn't going to do anything to change the market for shrimp because of the existing supply chain and seasonality," he said.
Harris also was skeptical that restaurants would feel pressure from consumers to sell domestic shrimp in Louisiana because it would mean higher prices, and he hasn't heard of any member restaurants making the switch this fall.
"I don't believe that this is going to change demand," he said. "We're very supportive of the domestic seafood business, but the market is driven by consumer demand."
A potential wave of new restaurant customers would make a difference for Kim and David Chauvin's fourth-generation family fishing business in Dulac, but they haven't been sitting idly by over past years while watching the demand for domestic seafood drop as imported seafood flooded the market — especially for sales to restaurants.
Beyond lobbying for the new shrimp and crawfish disclosure law, the Chauvins and others in the industry plus the LSU Agricultural Center have been working to change the Gulf Coast seafood market by modernizing boats and freezing operations to extend the shelf life of wild-caught seafood, focusing on premium products rather than commodity shrimp for processing, and finding ways for fishing operations to sell directly to consumers.
But capturing market share for domestic shrimp will be tough. About 90% of seafood sold in the U.S. is imported, according to a 2017 report by the U.S. Government Accountability Office.
Shrimp imports totaled 1.5 billion pounds at $6.2 billion in 2018, by far dwarfing crawfish imports of 15.8 million pounds at $99 million, U.S. Commerce Department statistics show. Meanwhile, most of the U.S. crawfish harvest takes place in Louisiana.
The price per pound of shrimp paid to commercial fishermen in Louisiana has largely hovered below $2 for the past decade.
By comparison, commercial fishermen and aquaculture farmers in foreign countries earn much less, though dockside prices are not widely reported. The wholesale price per pound of shrimp in India and Indonesia was $1.84 and $2.20, respectively, in April 2018, according to the Food and Agriculture Organization of the United Nations. On average, the wholesale price of shrimp in Louisiana is closer to $6 per pound.
Lax laws and subsidies
The vast majority of imported shrimp comes from India and Indonesia, where laws on use of antibiotics in shrimp farming operations are different as well. The governments of those countries also subsidize the industry by offering payments to shrimp farmers to offset lower prices. Gulf shrimpers noted those points in their push for the source-disclosure law as primarily a safety issue.
The Food and Drug Administration inspected only 2.2% of all imported seafood for food safety issues due to lack of resources in fiscal 2015. In fiscal 2016, the FDA inspected 144 foreign seafood processor facilities for compliance, about 2% of the more than 7,600 processors exporting seafood to the U.S.
"We seem to be the dumping ground for all the world’s junk (sea)food that has things in it that are banned but are getting into this country,” Kim Chauvin said.
For years, she would ask restaurant servers an uncomfortable question. “I was the person who would go into a restaurant and very nicely ask to see the box" the seafood came in, Chauvin said. “I don’t want to eat the imported stuff."
She said she’s optimistic but also realistic about whether the new source-disclosure law will trigger an uptick in demand for domestic shrimp and crawfish.
“We’ll see; the restaurants still have the choice,” she said.
A lot has changed since the Chauvin family built its first fishing boat in 1996 and began selling to restaurants in 2000 on its trek toward expanding potential markets:
- The business now has three boats, which have plate and brine freezers on board. These boat freezers are one significant change to the fishing process because the seafood is flash-frozen after being caught rather than hauled back to shore and frozen in a factory. The Chauvin family added freezer systems to control quality and increase fuel efficiency, Kim Chauvin said. This means restaurants and suppliers can buy shrimp for sale year-round.
- After Hurricane Katrina in 2005, the business began selling under the brand Mariah Jade.
- In 2010, the company bought an ice house and added a dock for a retail store where the public can buy shrimp, squid and flounder.
- Three years later, the family acquired Bluewater Shrimp Co. because it had a cryogenic tunnel, which allows the company to freeze shrimp in bulk that hasn't been frozen on boats.
- In 2016, the company branched out into tourism and started Down the Bayou Shrimp Tours, which shows off its dock and processing facility.
- The Chauvins even started a mobile food truck in Dulac that serves fresh seafood from scratch called Kim's Shuga Shack.
- The goal is to start selling its seafood online in the coming months for the first time. The business has about 50 employees, though many are seasonal jobs.
In 2016, Louisiana had about 36,102 jobs related to the seafood industry, the majority of which were related to domestic seafood. That was an increase from 30,635 workers in 2015 but down from 42,901 in 2014. But for commercial operators trawling for shrimp, there have been fewer boats on the water in recent years.
No lack of shrimp
"We see a shrinking fleet of boats not because there's a lack of (shrimp) but because of economic pressures," said David Veal, executive director of the American Shrimp Processors Association, based in Mississippi.
Veal isn't optimistic there will be any significant changes of mind at New Orleans restaurants about whether to buy imported seafood. And much of the damage has been done since the BP oil spill in 2010.
"There was a scare about the safety of products in the Gulf, and once you lose market share, the only way to get those customers back is to buy them back," Veal said. "So if you had a customer who bought shrimp from you and switched to imports, which are probably cheaper, there's no incentive for them to come back to you a year after the spill is over. Those things take a long time to overcome."
To survive, fishermen are becoming more vertically integrated rather than just catching seafood and turning to the wholesale market for sales, said Thomas Hymel, director of Louisiana Direct Seafood, which has made LSU AgCenter and other experts and advisers available to those on the coast for years and also has a website that helps fishing businesses sell directly to consumers.
Hymel said there’s a big opportunity for Louisiana’s seafood industry to step in to meet potential demand from restaurants wanting to switch to domestic products.
“In the marketplace, it was all based on price,” Hymel said. “We have some of the world’s best seafood; now we’re learning how to put it in the marketplace better.”
That means making a transition from dockside to farmers market.
“If you sold shrimp at a dock, it could be from quality A to Z, but the direct-to-consumer market only wants A shrimp; they want the beautiful ones, so quality has become everything,” Hymel said.
Lifelong fishermen like Bryan Mobley, who has been in business for 35 years, have been getting creative to stay in the industry.
In 2016, his family started Corina Corina Seafood and opened a retail store in Galliano. The operation is small with only four employees, but the family chips in to make it work. He hopes to pass on the business to his children.
“We started doing retail to be sustainable and stay in business,” Mobley said. “A lot of people want to eat more healthy, and that’s increased our sales quite a bit through direct marketing.”
The company freezes and vacuum-seals its seafood to sell directly to consumers.
Thinking outside the box
New technology developed by LSU could replace the oxygen in a package with a different gas to increase the longevity of seafood, but the machinery costs $35,000, compared with several thousand dollars for a vacuum-sealing machine.
“That new machinery is a little bit expensive,” Mobley said.
But the high price tag was a bet fisherman Lance Nacio was willing to take. Nacio is a third-generation fisherman in Montegut. He started Anna Marie Shrimp in 1998 and has grown the company to 15 employees.
The company has tried to stand out by fishing for more unusual fish in recent years and catching more than just shrimp. The business sells its catch at several farmers markets across the state, including in Baton Rouge, and has established relationships with chefs.
“With the flood of imports and (low) dockside prices, it caused fishermen to think outside of the box,” Nacio said. “We embraced that early on.”
The fisherman suggested that many restaurants, especially those catering to tourists in New Orleans, have profited trying to “sell our culture and our heritage but substitute with a cheaper, less-quality product” by using imported seafood.
Often, the challenge is to get into the supply chain for restaurants.
“It’s hard to get seafood to the consumer fresh. It takes a lot for our boats to go out, and they are out there for 10 to 12 days at a time,” he said. “So that’s why we do the things that we do.”
Meanwhile, the LSU AgCenter has been working to help fishermen “break the traditional supply chain” for Louisiana restaurants that buy wholesale products from food suppliers rather than local companies.
“The supply chain has become so established that it’s caught, goes to a plant in Houma or Thibodaux and is sent to places like the Fulton Fish Market. It’s about trying to break that supply chain back up,” said Julie Lively, a fisheries specialist at the LSU AgCenter.
The hope is that consumers will respond to quality local seafood that is caught in the wild and will reject imported seafood fed antibiotics on a farm. Lively conducted a study of shrimp bought at Baton Rouge grocery stores in late 2016. She found that the majority of shrimp sold tested positive for antibiotics often used in shrimp farming overseas — even banned substances.
Beyond competition from imports, the commercial fishing industry in Louisiana is threatened by a receding coastline and rising sea levels.
“As we’re starting to move further from the coast, the animals are further out. We’ll still be able to have a great fishery, but if we can’t increase the price (it won’t work economically), because the fisherman can’t justify using more gas to go out and get the animals,” Lively said. “That becomes the concern.”