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Market Demand Assessment For Haa Aaní Oysters

Confidential

Prepared for: Sealaska Haa Aaní

Prepared by:

Juneau • Anchorage

May 2011

Table of Contents

Key Findings ............................................................................................................................ 1 Summary ............................................................................................................................... 6

Introduction and Methodology .............................................................................................. 8 Methodology ......................................................................................................................... 8 Measures of Oyster Production and Conversion Factors .......................................................... 9

Overview of International and Domestic Oyster Production and Markets .......................... 10 Oyster Markets ..................................................................................................................... 10

Potential Markets for Haa Aaní Oysters ............................................................................... 22 Alaska Markets ..................................................................................................................... 22 Lower 48 Wholesale Market .................................................................................................. 26 Lower 48 Retail Market ......................................................................................................... 29 International Markets ........................................................................................................... 31

Transportation, Logistics, and Quality ................................................................................. 32 Shipping .............................................................................................................................. 32 Logistical Considerations ...................................................................................................... 33 Oyster Quality ...................................................................................................................... 34

Organizational Considerations ............................................................................................. 36 Appendices ........................................................................................................................... 37 Appendix A List of Contacts ................................................................................................. 38

Wholesalers/Distributors ....................................................................................................... 38 Seafood Restaurants and Oyster Bars .................................................................................... 42 Retailers ............................................................................................................................... 47 Anchorage Wholesalers ........................................................................................................ 48 Icy Strait Point ...................................................................................................................... 48 Small Ships ........................................................................................................................... 48 Shipping and Logistics .......................................................................................................... 49 General Information ............................................................................................................. 49

Appendix B: Selected Menus ................................................................................................ 50

Market Demand Assessment for Haa Aaní Oysters McDowell Group, Inc. • Page 1

Key Findings

Haa Aaní LLC, a subsidiary of Sealaska Corporation,

and Yak-tat Kwaan Inc. are supporting the

development of three oyster farms in Yakutat as

part of a rural regional economic development

initiative. Haa Aaní’s three farms are on track to

produce 250,000 marketable oysters by year-end

2011 and an additional 500,000 oysters by the

end of next year. Within three to five years, Haa

Aaní production volume could reach 2 million

oysters per year. Haa Aaní oysters will be a high-

quality floating tray cultured oyster intended for

the high-value half-shell market.

Maximizing the market value of this very

substantial volume of oysters will require a well-

defined plan with expertly executed marketing

strategies. The purpose of this study is to provide

the market information necessary to develop a

sound marketing plan.

McDowell Group’s research for this project, which

included interviews with oyster distributors,

restaurateurs, and retailers from across the country,

has confirmed that the prevailing image of pristine

Alaska water, coupled with our state’s unique

“wild” mystique, sets the stage for a potentially

large market for high-quality Alaska oysters.

However, efficient distribution and competitive pricing will be significant challenges for Haa Aaní efforts to

distribute large volumes of oysters profitably.

Following are key findings from the study.

International and Domestic Oyster Production and Markets

• U.S. domestic oyster production has averaged 217.5 million pounds, live weight, per year since 2000.

The top export markets for U.S. oyster exports in 2010 were Canada, Hong Kong, Taiwan, Singapore,

France, and Italy.

• Pacific Coast landings totaled 73 million pounds, live weight, in 2009. Production is centered in

Washington. Sales in the Pacific region totaled $72.8 million in 2009. British Columbia production


totaled another 11.9 million pounds, with a landed value of $6.2 million. Alaska production

accounted for .03 percent of Pacific Coast landings.

• Oyster exports through U.S. Customs in Seattle in 2010 totaled 5.5 million pounds and were valued

at $14.8 million. Oyster exports through Seattle were destined for Hong Kong (35 percent), Canada

(34 percent), and Taiwan (23 percent).

• Imports of British Columbia oysters to U.S. Pacific Coast states totaled $5.4 million in 2010. Along the

Pacific Coast, California imports the largest value of B.C. oysters, followed by Washington.

• Other top international destinations for British Columbia oysters were Hong Kong ($4.8 million in

exports in 2010) and Singapore ($1.3 million in exports in 2010). These countries were also the top

export destinations for oysters from other Canadian provinces.

Alaska Oyster Production

• A total of 27 farms in Alaska (15 in Southcentral and 12 in Southeast) harvested 764,422 oysters in

2010 with a total farm gate value of $384,500, based on data self-reported to ADF&G. Alaska

harvest is down from the 2005 peak of 1.3 million oysters with a total farm gate value of $566,000.

• The average price (farm gate value) for Alaska oysters has risen from $3.98 per dozen in 1990 to

$6.04 in 2010. The price per oyster in 1990 averaged $0.33, while the average oyster price in 2010

was $0.50 per oyster. This price increase is generally on par with inflation over the 20-year period.

• Roughly half of the statewide harvest occurs in Southeast. In 2010 423,288 oysters were harvested in

the region with a farm gate value of $166,000. This equates to $4.71 per dozen. Over the past 20

years Southeast’s oyster harvest peaked in 1996, at 624,000 oysters.

• Southcentral growers have increased the average value of the region’s oyster harvest over the last five

years to $7.69 per dozen. This may be the result of lower shipping costs and increased direct-to-the-

public sales via the Internet. Prices listed on the Kachemak Shellfish Growers Cooperative website

range from about $16 to $19 per dozen (plus shipping). It is unknown what volume of oysters are

sold at these prices.

• Most oyster farms in Southeast Alaska are small in scale. The larger oyster producers in Southeast

include Pearl of Alaska (estimated production of 13,000 to 16,000 dozen in 2010 with plans to

increase production to about 40,000 to 60,000 dozen by 2012 or 2013), Canoe Lagoon (about

10,000 dozen per year), and Blue Starr Alaska Oyster Company (about 3,000 to 5,000 dozen per

year).

• Alaska oyster production will increase dramatically in the next few years. Haa Aaní production alone

will nearly double total statewide oyster production within the next year or two. Pearl of Alaska and

several oyster farms on Prince of Wales Island will also be ramping up production.


Market Structure and Characteristics

Oysters can change hands several times before ending up on the plate of the consumer. Some growers sell

directly to restaurants or retailers, while others may rely almost exclusively on wholesalers/distributors. Many

growers do both; carefully developing relationships with select high-end buyers while also selling larger

volumes of oysters to a wholesaler (who may then sell the oysters to yet another smaller local distributor). In

any case, each approach has its advantages and disadvantages, as summarized below.

WHOLESALE MARKETS

• Wholesale markets are appealing because of the potential to sell very large volumes of oysters, which

can reduce the unit cost of marketing, harvesting, testing, packaging, handling, and shipping.

However, growers must be willing to settle for lower prices, perhaps substantially less than direct

sales to oyster bars or other restaurants.

• Oysters often go through two wholesale distributors: a large specialized shellfish distributor and

another smaller, less-specialized local distributor.

• Six large-scale and several mid-sized oyster distributors were interviewed for purposes of this study.

Key points from these informative interviews are provided in the appendices, along with contact

names and information. Contact information for oyster distributors in all 50 states can be purchased

from Urner Barry, a commodity market reporting firm.

• Most high-volume distributors expressed interest in Alaska oysters but had different reactions

regarding prices. Several large East Coast distributors indicated that in total they could potentially

buy 600 to 800 dozen Alaska oysters per week, if the price was about $7.20 per dozen (FOB East

Coast). Other wholesalers currently buy some oysters at prices over $8 per dozen FOB East Coast but

that volume is significantly less. Two others were adamant that they’d be more interested if the price

was $5.00 or less per dozen. Pacific Coast distributors have a steady supply of high-quality oysters

from Puget Sound and British Columbia in the range of $5.00 to $7.00 (FOB Seattle).

• Three wholesalers in Anchorage have the potential to handle from 200 dozen to as much as 500

dozen oysters per week at an FOB Anchorage price of about $7.00 per dozen. These buyers are very

familiar with oysters grown in Southeast Alaska and stated that demand exceeds supply, especially in

winter. Nevertheless, selling in Anchorage or other wholesale markets will require competitiveness

with prevailing prices.

• To preserve relationships with wholesalers, growers cannot also sell directly to the wholesaler’s

customers. Long-term relationship building is critical in seafood market development. Many

wholesalers have been doing business with the same Alaskan oyster growers for two decades.

• As with any new venture, there will be a product handling, logistics, and market development

learning curve. High-end customers, those willing to pay over $7.00 per dozen for oysters will be

demanding in terms of quality, consistency, and delivery reliability. It will be critical to work out the

logistical kinks (perhaps with one or two smaller customers) before doing business with premium

buyers such as K&B Foods or JP’s Shellfish.


RESTAURANT MARKETS

• Owners and executive chefs from nine upscale restaurants located in New York, Chicago, San

Francisco, Portland, Washington, D.C., and Seattle were interviewed to gauge interest in Alaska

oysters and price sensitivity. Notes from those interviews are included in Appendix A. The appendix

also contains contact information for over 100 upscale oyster bars and seafood restaurants (which

feature raw oysters). Additionally, a selection of international restaurants is included as well.

• Alaska’s seafood mystique was noted by several executive chefs, particularly in New York. High-end

raw bar managers/owners interviewed for this project all were very interested to discuss Alaska

oysters. Interview summary notes and contact information for these restaurants are provided in the

appendix.

• While one raw bar owner paid more than a $1.00 per oyster for some varieties, most chefs indicated

they would be interested up to a price of about $0.80 to $0.85 per oyster ($10.20 per dozen

including shipping). This price is a significant premium over the $7 to $8 maximum from wholesalers

but carries hidden costs such as marketing effort and expense, extra handling, and higher freight

rates.

• Although restaurants may pay a higher price, there is greater risk associated with transportation and

other logistical mishaps associated with moving relatively small volumes of oysters. Farmers also face

greater risk of non-payment from restaurants, where the business failure rate is high.

• The Grand Central Oyster Bar in New York and the AquaGrill Restaurant in New York indicated they

already buy significant quantities of Alaska oysters and would be interested in buying from Haa Aaní.

Each of these restaurants could potentially buy 60 to 100 dozen oysters per week.

• There may be a total potential of 375 to 425 dozen oysters per week from the restaurants

interviewed. Logistics and quality control assurances should be carefully defined before approaching

the larger premium customers.

RETAIL AND OTHER MARKETS

• Oyster sales in retail settings are a function of many factors: grocer’s niche, average incomes in

neighborhoods served, regional preferences (propensity to buy oysters at retail or at raw bar), and

proximity to oyster farms or distributors. Retail demand for oysters was reported to be greatest

during the winter holidays.

• Selling to small, independent seafood stores presents many of the same obstacles as selling to

restaurants. Often the volume involved may not justify the time and effort required to sell to that

outlet.

• Selling to larger, chain grocery stores is another option. However, because other brands of oysters

will be cheaper on the wholesale market Haa Aaní oysters may not be price competitive. In addition,

the process of becoming a vendor is typically rigorous (for example, potential suppliers must submit

applications). Nevertheless, the option of connecting with an “upscale” chain like Whole Foods or


Wegman’s is worth pursuing. These large chains have the potential to consistently absorb relatively

large volumes of oysters and perhaps at a price slightly better than may be available to Haa Aaní on

the wholesale market.

• Market demand in Juneau retail outlets appears to be about 30 dozen oysters a week, primarily at

Alaskan and Proud and Super Bear. However, these retailers are currently served by Pearl of Alaska

and Canoe Lagoon. In addition to demand in Juneau there is potential for sale of another 5 to 10

dozen oysters per week in the northern Southeast area including lodges in and near Juneau,

Gustavus, Elfin Cove, and Hoonah. Icy Strait Point in particular has excellent potential for buying Haa

Aaní oysters.

• The barriers to selling to larger cruise lines that call on Southeast ports are significant but not

insurmountable, although pressure for low pricing would be great. There is a greater likelihood of

selling to smaller cruise lines that call on Juneau.

• Oysters are very popular in Yakutat – a fly-fishing mecca for many affluent fishermen from April to

August – where it might be possible to sell 75 dozen per week seasonally.

Transportation and Logistical Considerations

• Efficient, cost-effective, and reliable transportation of oysters to buyers is critical. Daily north-bound

and south-bound Yakutat jet service is an advantage, but the cost of shipping oysters will

nevertheless represent a significant constraint on the net price per dozen earned by Haa Aaní.

Depending on the destination, current Alaska Airlines air cargo rates will add as much as $2.38 to

$4.05 per dozen to the final cost of the product. This does not include the cost of packaging or

transferring the oysters from the airport to the customer. Freight costs can represent one-third of the

delivered cost of oysters in some markets.

Alaska Air Cargo Cost Per Dozen from Yakutat to Major Market Airports

Zone

Destination

30-159 dozen

(100# rate)

160-324 dozen

(500# rate)

325+ dozen

(1,000# rate)

2 Anchorage/Fairbanks $2.38 $2.22 $2.05

3 Southeast Alaska $2.54 $2.41 $2.22

4 Portland/Seattle $2.61 $2.49 $2.33

6 California, Nevada, Arizona $3.35 $3.20 $3.01

7 Austin/Chicago/Dallas/Denver Houston/Minneapolis

$3.50 $3.38 $3.19

8 Atlanta/Boston/New York Washington DC/Miami

$4.05 $3.91 $3.75

Source: Alaska Air Seafood Express Air Cargo Note: Rates are per dozen based on an average of 2.7 pounds per dozen shipped in 50 pound boxes with six pounds of packaging, including the box. This results in about 16 to 17 dozen oysters per 50 pound box. Actual rates paid may vary from these estimates, depending on oyster size and weight of packing. Rates include $0.22/lb fuel and $0.04/lb security surcharge.


• To facilitate handling, Haa Aaní will need to become a known-shipper with Alaska Airlines (or other

carriers) and establish a certified screening facility with TSA. Becoming a TSA-approved certified

shipper allows cargo check-in two hours before takeoff and has a lower security screening fee. In

addition, as a certified shipper TSA will generally not open boxes for inspection.

Image and Branding

• According to distributors, restaurant managers, and chefs interviewed for this study, the image and

mystique of Alaska seafood is an important sales tool. Managers and chefs expressed a high level of

interest in the prospect of purchasing Alaskan oysters. Creating a brand image with themes that

include “Alaska” will provide Haa Aaní with advantages in the marketplace. Other themes such as

“grown in pristine Alaska water” and “Native Alaskan grown” will also be beneficial to establishing a

unique brand identity. Haa Aaní oysters will be sold as Alaskan oysters so it may not be as necessary

to have the word Alaska in the name. Specific brand names such as Snow Whites, Cannon Beach

Shooters or perhaps an Alaska Native word or phrase could capitalize on the Alaska mystique in the

marketplace. The name “Haa Aaní oysters” has potential.

• To distinguish its oysters in the restaurant market Haa Aaní will want to provide high-quality point of

sale pieces such as brochures, posters, and table tents to end-users to reinforce its brand image. A

quality online and social media presence will also be a valuable marketing tool.

Product Quality

Consistent production and delivery of a high-quality oyster – comparable to Kumamoto, Kusshi, and Penn

Cove, as well as Alaskan oysters produced by Canoe Lagoon (Coffman Cove) and Pearl of Alaska (Kake) – are

essential in building a market for Haa Aaní oysters. If Haa Aaní cannot achieve similar quality with respect to

shell appearance, cup depth, texture, flavor, and consistency of size, expectations about price and potential

markets must be adjusted accordingly.

Summary

Clearly there is room in the regional, lower 48, and international markets for large volumes of Haa Aaní

oysters. As for most Alaska seafood, there is a mystique associated with clean water and pristine environment

that provides an important advantage for Haa Aaní oysters. Contacts made during this study suggest there is

potential for Haa Aaní to sell 1,000 to 1,800 dozen per week across a variety of markets, but of course that

will depend on selling prices. Once Haa Aaní has established price thresholds needed to support operations,

more definitive market outreach can be conducted and volume estimates refined.

Shipping costs will have a dramatic effect on the net price Haa Aaní receives for its oysters and Haa Aaní will

need to be price-competitive to sell high volumes of oysters. With significant near-term production volume

(and anticipated future increases), as well as competion from other growers over the next few years, Haa Aaní

will need to consider at least some level of distribution through wholesalers (even though this will likely result

in a lower price). The higher the volume Haa Aaní wishes to sell into the end-user market the greater the

effort required for marketing and handling. With enough effort (and manpower) Haa Aaní may eventually be


able to sell all their production into the end-user market. However, at production levels of 1,200 to 3,200

dozen per week it could take significant time, marketing effort, and expense to reach those levels. Whichever

mix of markets Haa Aaní chooses to pursue, substantial time will be required to establish relationships and

gradually build sales.

Though it will be tempting to seek out the largest buyers immediately, we suggest Haa Aaní sell to a few

smaller distributors and a handful of oyster bars/restaurants with modest volumes before attempting to sell

large quantities for top dollar to the biggest distributors or the busiest oyster bars. It is difficult to recover

from an early stumble with a major buyer. The exception would be the Anchorage market. Starting with

modest volume in 2011 and supplying the three Anchorage wholesalers with product through the winter of

2011-2012 should help firmly establish Haa Aaní as a valuable partner for this significant market close to

home. This will allow sales personnel and growers time to develop the skills necessary to produce and sell

significantly higher volumes of oysters. Haa Aaní will want to ask wholesalers about their needs and what Haa

Aaní can do to make the relationship work for both parties over the long-term.

Despite higher shipping costs, the Northeast could also be a fertile market for Haa Aaní oysters. Though Haa

Aaní oysters will be somewhat more expensive than other West Coast oysters sold in Northeast markets, the

Alaskan mystique and quality product should generate premium prices.

This report provides a wealth of market intelligence and contact information to support development of a

Haa Aaní oyster marketing plan. In that planning effort Haa Aaní must decide which markets to pursue, what

strategies to employ to tap each market, and the necessary investment in time and marketing. In any case, it

will likely take some level of experimentation over the next couple years to fully understand which mix of

markets will provide the most efficient and profitable returns.


Introduction and Methodology

With Alaska’s clean water and marketable mystique there is great potential for increased oyster farming in the

state. Haa Aaní LLC, a subsidiary of Sealaska Corporation, and Yak-tat Kwaan Inc. funded three oyster farms in

Yakutat as part of a village-based economic development initiative. Haa Aaní and Yak-tat Kwaan embarked on

this venture to support shareholder employment and lasting economic development in Yakutat, and perhaps

other Southeast Alaska villages in the future.

Haa Aaní’s three farms are on track to produce 750,000 marketable oysters by the end of next year, including

250,000 oysters by year-end 2011. Haa Aaní oysters will be a high-quality product intended for the high-

value half-shell market. With annual production of 750,000 oysters, Haa Aaní will need to sell, on average,

1,200 dozen oysters per week, year-round. Within three to five years, production volume is expected to be

close to two million oysters per year, which will require sales averaging 3,200 dozen per week.

Haa Aaní Oyster Production Equivalents

Oyster Count Equivalent in Dozens

Avg. Dozens per Week Selling Year-Round

100,000 8,333 160

250,000 20,833 400

500,000 41,666 800

750,000 62,500 1,200

1,000,000 83,333 1,600

2,000,000 166,666 3,200

The following report is intended to assist Haa Aaní in identifying the best potential markets and buyers, and

develop an understanding of the opportunities and obstacles in the oyster marketing business. The best

markets will yield the highest return on oyster sales with the most efficient level of sales effort.

In addition to collecting a range of secondary data, the study team interviewed wholesalers, restaurants,

retailers, and shippers, to gauge oyster demand and logistical needs.

Methodology

McDowell Group compiled harvest and farm gate value statistics from regional, state, federal, and

international agencies. The study team performed interviews with 10 distributors, nine restaurant

buyers/chefs, three Alaskan industry veterans, six grocery stores, one lodge owner, the Icy Strait Point food

and beverage manager, and four shipping companies. These interviews provided valuable information about

sales volumes, prices, market demand, shipping costs, and the current state of the Alaska oyster industry. A

list of contacts, and notes from those interviewed, can be found in Appendix A.


Measures of Oyster Production and Conversion Factors

In general, there is little consensus about standard units of volume in the oyster market. Buyers will talk in

terms of cost per oyster, per dozen, per bag, per case, or per 100-count. Cases and bags typically refer to a

certain poundage or count.

A live 3.0 to 3.25 inch Haa Aaní oyster is estimated to weigh between 3.2 to 4.0 ounces with a mid-point of

about 3.6 ounces. A dozen live Haa Aaní oysters is estimated to weigh between 2.4 and 3.0 pounds with a

mid-point of 2.7 pounds per dozen. Actual weights may vary depending on how long the oyster is allowed to

grow and the time of year the shellfish is harvested. The meat weight of a Haa Aaní oyster is estimated to

range from 0.9 to 1.4 ounces with a mid-point estimate of 1.2 ounces.

Estimated Haa Aaní Oyster Average Weights

Oyster size Est. Live Weight Dozen

Est. Live Weight Each

Est. Meat Weight

Extra small to small 2.7 # 3.6 oz 1.2 oz


Overview of International and Domestic Oyster Production and Markets

Oyster Markets

This chapter provides a broad overview of global, national, regional and local oyster markets. Most of the

world’s oysters are sold in markets not competitive with the high-quality, half-shell market of greatest interest

to Haa Aaní. However, it is useful to have a general “big-picture” understanding of the global market, as a

first step toward understanding where opportunity is greatest for Haa Aaní, either for tapping existing

competitive markets or in new, largely untapped markets.

Globally, oysters are sold live, shucked and raw fresh, shucked and raw frozen, cooked and canned, brined,

smoked and canned in oil, dried, breaded and frozen, extracted for oyster sauce, and a range of other value-

added products.

The highest value for the individual oyster is when sold fresh on the half-shell, the end product for nearly all

of Alaska’s current oyster production. However, larger oyster growers, including growers in British Columbia,

and Washington State also sell fresh shucked, cleaned, and packed oysters.

While Alaska producers might face significant transportation or other logistical barriers to accessing distance

markets, the high-value oyster market is truly global. For example, B.C. oysters are sold in China, the world’s

largest producer of oysters, other Pacific Rim nations, and in European markets as well. As oyster production

in Southeast Alaska ramps up significantly over the next decade, growers will likely be required to incorporate

a growing proportion of international sales into their customer base.


International

World oyster aquaculture production totaled 9.5 billion pounds, live weight, in 2009 and was valued at $3.3

billion. The vast majority of oysters harvested globally are farmed, with wild harvests generally trending down

as concerns over ecosystem health increase. Total global production of oysters peaked in 2007, then declined

in 2008. Since 2008 production has returned to what has been and is expected to continue to be a long-term

growth trend.

Annual World Oyster Production, 2000 to 2009 (Pounds)

Source: Food and Agriculture Organization of the United Nations

In 2009, China accounted for approximately 81 percent of total global production, with Japan (5 percent),

Korea (6 percent), the United States (3 percent), and France (2 percent) also producing significant numbers

of oysters. Top world markets for fresh, chilled and frozen oysters are Japan, the U.S., Italy, China, Spain,

Belgium and France. The largest exporters of oysters are the Republic of Korea, France, China, the U.S., and

Canada.

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

Wild

Cultured Production


United States

U.S. domestic oyster production has averaged 217.5 million pounds, live weight, per year since 2000. In

2009, U.S. domestic oyster landings totaled an estimated 217.3 million pounds. The estimated value of 2009

production was $136.5 million.

U.S. Commercial Landings of Oysters, 2000-2009

(live weight, thousand lbs.)

Source: NOAA Fisheries: Office of Science & Technology

Exports of U.S. oysters have increased from 6 percent of U.S. commercial landings in 2000 to 24 percent in

2009, in terms of meat weight. U.S. exports in 2010 totaled 7.7 million pounds of all oyster products valued

at $22.2 million. The top markets for U.S. oyster exports in 2010 were Canada, Hong Kong, Taiwan,

Singapore, France, and Italy. U.S. exports include oyster seed and live, fresh, frozen, dried, salted or brined

oysters. No exports of canned oysters were recorded by the National Marine Fisheries Service in 2009 or

2010.

Top U.S. Oyster Export Markets, 2010

Live/Fresh/Frozen/ Dried/Salted/Brine

Pounds Value

% of Total

Export Value

Average Price/Pound

Canada 3,399,905 $10,342,888 47% $3.04

Hong Kong 1,997,408 4,983,998 22 2.50

Taiwan 1,296,054 1,693,945 8 1.31

Italy 90,716 1,234,287 6 13.61

Singapore 289,720 796,066 4 2.75

France 133,816 659,808 3 4.93

Source: National Marine Fisheries Service

251,402

199,632210,166

226,699236,176

207,514 210,239

230,683

184,290

217,339

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009


Exports through U.S. Customs in Seattle, WA in 2010 totaled 5.5 million pounds and were valued at $14.8

million. Thirty-five percent by volume of oyster exports through Seattle were destined for Hong Kong, 34

percent for Canada, and 23 percent for Taiwan. Other countries receiving U.S. oyster exports through Seattle

were China, Japan, Malaysia, and Singapore.

U.S. oyster imports have remained relatively steady since 2000, averaging 21.8 million pounds annually.

Imports are comprised of canned oysters (12 million pounds in 2010, valued at over $30 million),

live/fresh/frozen/dried/brine oysters (11.7 million pounds in 2010, valued at over $25 million) and oyster

seed (1,600 pounds in 2010, valued at $4,500).

U.S. Top Oyster Imports, 2010

Pounds Value % of Product Import Value

Average Price/Pound

Live/Fresh/Frozen/Dried/Salted/Brine

Canada 4.5 million $11 million 43% $2.44

South Korea 3.6 million $9.4 million 37% $2.61

Mexico 2.6 million $2.7 million 11% $1.04

Japan 620,000 $1.4 million 6% $2.26

Canned

China 7.7 million $20 million 66% $2.60

South Korea 4.2 million $9.7 million 32% $2.31

Japan 27,000 $160,000 0.5% $5.93

Thailand 25,000 $51,000 0.2% $2.04

Source: National Marine Fisheries Service

Imports through U.S. Customs in Seattle arrived from Canada, China, and South Korea in 2010. Imports from

China were all canned (176,000 pounds valued at $454,378). Imports from Canada and South Korea fell in

the live/fresh/frozen/dried/salted/brine category. Imports through Seattle from Canada totaled 2.6 million

pounds and were valued at $5.4 million. South Korean imports totaled 6,700 pounds and were valued at

$24,000.

With imports and exports taken into consideration, the total U.S. supply of oysters has averaged 394.7 million

pounds, live weight, since 2000. The 2009 U.S. supply of oysters was 358.7 million pounds.

U.S. REGIONAL PRODUCTION

The top three oyster producing regions in the United States are the Gulf of Mexico, Chesapeake Bay and the

Pacific Coast. Atlantic and Gulf of Mexico production is dominated by the Eastern oyster, Crassostrea virginica.

Pacific production consists primarily of Pacific oysters, Crassostrea gigas, which were introduced from Japan in

the early 1900’s. Other oysters produced on the Pacific Coast include the European Flat (Ostrea edulis),

Kumamoto (Crassostrea sikamea), and the native Olympia (Ostrea lurida).

According to National Marine Fisheries Service (NMFS) data, the Gulf of Mexico region reported

approximately 138 million pounds, live weight, of oyster landings in 2009 (90 million of that in Louisiana)

with $72.5 million in landings revenue. Regional oyster production and sales have declined significantly since


the Gulf oil spill. However this decline presents little opportunity for Alaska oysters producers as few Gulf

oysters are destined for the high-end half shell market.

Atlantic production totaled 13.4 million pounds of oysters in 2009, with $24.0 million in landings revenue.

Production is down in the Atlantic region, where landings in 2000 totaled 14 million pounds in Maryland

alone.

Also according to Pacific Shellfish Growers Association, Pacific Coast (Alaska, Washington, Oregon and

California) landings totaled 73 million pounds in 2009. Production is centered in Washington, where oyster

production totaled 60 million pounds in 2009. Sales in the Pacific region totaled $72.8 million in 2009.

Alaska is a very small contributor to total Pacific Coast production, accounting for 0.3 percent of production

volume and 0.6 percent of production value.

Oyster Production in Canada

The Canadian oyster industry is active on Prince Edward Island, in Nova Scotia, New Brunswick, and British

Columbia. Eastern Canadian production of oysters in 2009 totaled 6.8 million pounds (live weight) and was

valued at $9.25 million (USD). British Columbia production totaled 11.9 million pounds in 2009, with a

landed value of $6.2 million (wholesale value of $13.3 million).

British Columbia Annual Oyster Production, 2001-2009 (thousand pounds, live weight)

Source: Statistics Canada

Total U.S. imports of Canadian oysters were $11 million (USD) in 2010. Imports from British Columbia were

valued at $5.5 million. Total U.S. oyster exports to Canada totaled $10.3 million in 2010. U.S. exports to

British Columbia accounted for $8.6 million of that total. Other top international destinations for British

Columbia oysters in 2006-2010 were Hong Kong ($4.8 million in exports in 2010) and Singapore ($1.3

million in exports in 2010).

12,125

16,314 15,873

17,27817,957 17,661 18,104

16,497

12,46511,905

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009


Imports of British Columbia oysters to U.S. Pacific Coast states totaled $4.5 million in 2010. Over the last ten

years, imports reached a high of $6.5 million in 2006 and lows of $2 million in 2001 and 2002. Along the

Pacific Coast, California imports the largest value of B.C. oysters, followed by Washington.

Imports of British Columbia Oysters to Pacific Coast States, 2001 – 2010

Source: Statistics Canada

U.S. Pacific Coast oyster exports to B.C. exceeded the value of imports from B.C. in 2010 (trade balance of -

$3.9 million). Washington exported more oysters to B.C. than any other U.S. state, followed by Oregon.

Washington exports to B.C. in 2010 were valued at $7.4 million, while Oregon exports totaled $1.1 million.

No Alaskan exports or imports to Canada were recorded in 2009 or 2010.

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Oregon

California

Washington


Alaska Oyster Production and Value

STATEWIDE PRODUCTION

The total number of Alaska shellfish (oyster, clam, and mussel) farms permitted by the Alaska Department of

Fish and Game has increased in the past twenty years. The number of farms with production has remained

relatively steady over the past ten years, especially in Southeast. Southcentral permitted shellfish farms with

production increased from four in 1990 to 15 in 2010, with a high of 23 in 1998. Southeast permitted farms

(oyster and clam) with production ranged between seven and twelve between 1990 and 2010.

Total Permitted Shellfish Farms with Production in Alaska, 1990-2010

Source: Alaska Department of Fish & Game

The Alaska Department of Fish and Game (ADF&G) tracks oyster production and sales in

Alaska. Oyster farmers must submit annual reports that detail sales volume and farm gate value data. This

data is self reported and unaudited. According to these numbers, in 1990, Alaskan oyster production totaled

224,283 oysters (18,690 dozen). In 2010, Alaskan farms produced 764,422 oysters (63,700 dozen). Oyster

production reached a twenty-year high in 2005, when 1,334,934 oysters were produced. The vast majority of

oysters produced in Alaska are Pacific oysters.

Alaska Annual Oyster Production 1990-2010 (Dozens of Oysters)


0

20,000

40,000

60,000

80,000

100,000

120,000

0

5

10

15

20

25

30

35

Nu

mb

er o

f P

erm

its

Southcentral

Southeast


It is unclear exactly what led to the 2005 peak and subsequent decline. Potential reasons mentioned by those

interviewed for this project included 1) an increase in permits prior to 2005 resulted in increased production

that year. 2) the difficultly in making a profit from a small farm may have resulted in some growers reducing

production or leaving the industry, 3) the availability of suitable quality spat may have been an issue in some

years.

STATEWIDE HARVEST VALUE

The ten Alaska shellfish farms producing in 1990 generated sales of $73,537. In 2010, sales from the 27

shellfish farms with production totaled $384,500 in oyster production. As with production, oyster sales

reached a high in 2005, with $565,964 in sales reported.

Alaska Annual Oyster Sales,1990-2009 (Farm Gate Value)


$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

Southeast Sales Southcentral Sales


SOUTHEAST ALASKA PRODUCTION

According to ADF&G records, of the 41 permitted shellfish farms in Southeast, 12 produced oysters and/or

clams in 2010. Twenty-two shellfish farms in the region are permitted specifically for oysters (whether they

produced or not) in 2011. One shellfish nursery, Naukati Bay Shellfish Nursery, was also permitted in

Southeast Alaska in 2011.

Number of permitted Southeast Alaska shellfish farms, 1990-2010


Southeast oyster farms produced 423,288 oysters (35,274 dozen) in 2010. Production reached a high of

624,091 oysters in 1996 before dipping to 247,289 in 2001. Production increased from 2001 to 2005 before

falling again between 2005 and 2009.

Southeast Alaska Oyster Production, 1990-2010


0

5

10

15

20

25

30

35

40

45

Permitted Farms Farms with Production

0

10,000

20,000

30,000

40,000

50,000

60,000

Oys

ters

(doz

ens)


AVERAGE PRICE PER DOZEN

The average statewide price (farm gate value) for Alaska oysters has risen from $3.98/dozen in 1990 to

$6.04/dozen in 2010. The price per oyster in 1990 averaged $0.33, while the average oyster price in 2010

was $0.50 per oyster. The increase in price per oyster was roughly equal to inflation over the 20-year period.

Average Statewide Price Per Dozen for Alaska Oysters, 1990-2010

Source: Alaska Department of Fish & Game, calculated by McDowell Group.

For the six-year period between 2005 and 2010, Southcentral averaged 53 percent of the statewide

production and 59 percent of statewide value. The average reported price per dozen for Southcentral oysters

for the period is $6.67. Southeast averaged 48 percent of statewide production for the same period and 41

percent of value. The average reported price per dozen for Southeast oysters for the period is $5.03.

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00P

rice

Per

Do

zen


The greater value obtained for Southcentral oysters is likely related to higher shipping costs in Southeast.

Additionally, Kachemak Shellfish Growers Cooperative has been able to achieve some level of sales directly to

the public via its website with prices ranging from $16 to nearly $20 per dozen. It is unknown what volume

of sales occurs at these prices.1 It is recommended that Haa Aaní further investigate the potential for direct to

the public sales.

Average Price Per Dozen for Alaska Oysters by Region, 2005-2010

Southcentral Southeast

Production Value Avg. Price Production Value Avg. Price

2005 60% 59% $5.01 40% 41% $5.20

2006 56 60 5.19 44 40 4.45

2007 52 56 6.04 48 44 5.12

2008 44 56 8.36 56 44 5.20

2009 56 64 7.73 44 36 5.48

2010 45 57 7.69 55 43 4.71

Six year avg. 52% 59% $6.67 48% 41% $5.03


SOUTHEAST GROWERS

Of the farms with production in Southeast, most are small-scale farms. Just a few permit holders produce the

majority of oysters. The larger producers in Southeast include Canoe Lagoon, Pearl of Alaska, and Blue Starr

Alaska Oyster Company.

Canoe Lagoon Oyster Company, located in Coffman Cove on Prince of Wales Island, is one of the oldest

oyster producers in the state with production spanning more than two decades. The company reportedly

produces approximately 10,000 dozen oysters per year. American Mussel Harvesters (a Rhode Island-based

farmer and distributor) promotes Canoe Lagoon oysters and describes them on their website as follows:

Canoe Lagoon’s are a medium to large choice oyster that are farm raised in a remote cove of Blaschke

Island, Alaska. On this farm the finished oysters boast a hard/durable shell due to the ultra-cold waters

of the region and short yearly growth period. The high algae counts in the water at the farm give the

oyster a healthy starting point and vibrant coloration. The 3 ½ to 4 inch shells are full of meat and have

a distinct fruity aroma to them. Most people taste the distinctive watermelon finish to the oyster that is

very noticeable in the Alaskan oysters. A nearly 5,000 mile journey from Blaschke Island, Alaska to your

plate.

Pearl of Alaska oysters are bottom-culture oysters grown in Stedman Cove and Big John Bay on the south side

of Frederick Sound, twelve miles south of Kake. Pearl of Alaska has been producing approximately 8,000 to

10,000 dozen oysters per year. The company is poised to produce 13,000 to 16,000 dozen in 2011 and

40,000 to 60,000 dozen in 2012. The oysters are harvested at low tides and must be cleaned of mud and

algae.

1 http://www.alaskaoyster.com/cm/Home/tabid/36/Default.aspx


Blue Starr Alaskan Oyster company produces approximately 3,000 to 5,000 dozen oysters per year from

Tokeen Cove off the west coast of Prince of Wales Island. Blue Starr is a member of the recently formed Alaska

Oyster Cooperative (AOC) based in Naukati. AOC is the second oyster cooperative in the state of Alaska.

Naukati has also developed a “weekend warrior” program designed to increase the number of growers in the

area.

Overall, Southeast oyster production is expected to increase significantly in the next few years, in addition to

Haa Aaní and Pearl of Alaska production, growers on Prince of Wales Island are also likely to increase their

production.


Potential Markets for Haa Aaní Oysters

Data presented in the preceding chapter indicates that the potential market for Southeast Alaska-grown

oysters is sizeable. Identifying which specific markets – in terms of geography and types of buyers – offer the

greatest opportunity for Haa Aaní oysters is the real challenge. This chapter describes options for selling

oysters, including selling in bulk to wholesalers, or selling in smaller batches directly to retailers or restaurants.

Some oyster growers work exclusively with wholesalers, some exclusively with retailers/restaurants, and

others do both. It is important to understand the advantages and disadvantages of the various oyster

distribution options.

Alaska Markets

A common-sense recommendation is to tap the closest markets first, where freight costs are lower and the

possibility for handling and transportation mishaps are lowest.

Anchorage

The Anchorage market offers significant potential for Haa Aaní oysters. According to wholesalers and

restaurants there is greater demand than supply for high-quality Alaska grown oysters, with supplies

significantly reduced in the winter when many growers find it difficult to harvest because of darkness and

poor weather conditions. The Anchorage market is also well served by Alaska Airlines from Yakutat and has

the lowest cargo rates of any major market destination. Potential wholesale demand could range from 200

dozen to as much as 500 dozen oysters per week at an FOB Anchorage price of about $7.00 per dozen. It is

possible to get a higher price per dozen through direct sales to restaurants but the overall volume in that

market is much smaller as many restaurants buy through one of Anchorage’s three major wholesalers.

WHOLESALE MARKET

Favco Alaska Seafood Processing and Distribution

Favco distributes a significant volume of oysters including product from Southeast. They have purchased from

Pearl of Alaska, Canoe Lagoon, and Blue Starr. They typically purchase 300 dozen per week in the summer

and about 150 dozen the remainder of the year. Most of the oysters they buy are about 3.5 inches in length.

About 70 percent of Favco sales are to restaurants with the remainder to retailers. They pay an average of

about $5.50 per dozen for oysters from Southeast. The oysters they get from Prince of Wales Island (POW)

are shipped to Ketchikan at the grower’s expense then Favco acts as the known shipper and pays the freight

from Ketchikan to Anchorage. This likely adds about $2.00 per dozen resulting in an FOB Anchorage cost to

Favco of about $7.50 per dozen. If growers on the west coast of POW are shipping product directly to

Ketchikan by float plane, freight rates would range from about $0.79 to $0.99 per pound depending on the

farm location. This is the equivalent of $2.13 to $2.67 per dozen, which seems untenable at a sale price of

about $5.50 per dozen. It is more likely that they are boating product to Naukati and then via road and Inter-


Island ferry to Ketchikan. Even in that scenario the growers are likely netting about $5 per dozen or less per

dozen.

Favco also buys from Pearl of Alaska in Kake. In the past, Pearl of Alaska has chartered flights once per week

and ships oysters directly to the Anchorage market.

Favco expressed interest in Haa Aaní oysters in the range of 150-200 dozen oysters per week if they can get

them FOB Anchorage for about $7.00 per dozen (note: based on the calculations above they may be paying

closer to $7.50 FOB Anchorage). They are especially interested in acquiring more Alaska oysters in the winter.

10th & M Seafoods

10th & M has been buying oysters from Southeast for 20 years and are very familiar with the product. They

buy from Canoe Lagoon, Pearl of Alaska, and Blue Starr. The buyer prefers three to four inch oysters. While

declining to provide specific volume information the buyer said they buy 30 to 200 dozen oysters per day

which is the equivalent of 360 to 1,400 dozen a week. Volume is higher in the summer. They cannot get

enough Alaska oysters, especially in the winter. The buyer said that everyone wants to sell oysters in the

summer but they are often not available in the winter. The buyer stated, “If the grower can support me year-

round they will have an advantage.”

10th & M is paying from about $5.90 to $7.25 per dozen for Southeast oysters FOB Anchorage. They have

different arrangements with different farms and mentioned relationships and length of the relationship as a

factor in price. They sell to a mix of retail (including through two stores of their own in Anchorage) and to

restaurants. The Kachemak Shellfish Growers Cooperative offered to sell them oysters at prices between $16

and $18 dozen. The buyer stated that they had no interest at that price.

He expressed interest in a high-quality year-round Yakutat oyster in the range of $7 to $8 FOB Anchorage. He

said they typically buy 200 dozen per week from the farms they do business with now and he would be

interested in that level of Haa Aaní oysters.

Sagaya Wholesale

Sagaya Wholesale supplies two of their own retail outlets as well as other retailers and restaurants in

Anchorage. Sagaya has been selling oysters from Alaska for 15 years. The buyer said the biggest problem they

have is acquiring a consistent supply. He said there have consistently been periods where there is no Alaska

product available. He mentioned that production in Cordova is expected to increase this year.

Sagaya currently purchases an average of about 250-350 dozen oysters per week and would not disclose

what they currently pay for product.

Juneau

Super Bear reported selling 20 dozen oysters a week in the off-season and slightly more in the summer. They

typically buy Pearl of Alaska and Canoe Lagoon oysters for between $7.20 and $8.40 per dozen (FOB Juneau)

with a selling price of $10.99. During times when Pearl Oysters and Canoe Lagoon are not available they will

stock Puget Sound oysters. They were selling Puget Sound oysters for $8.99 per dozen in April 2011.


Alaskan and Proud sells 10 dozen oysters a week during the summer and a little more during the holidays.

Carr’s/Safeway does not carry live oysters and Fred Meyer’s seafood department is restricted from buying

product not associated with their current vendor, but they only sell one or two dozen a week.

The study team interviewed the person primarily responsible for yacht provisioning in Juneau to better

understand demand from this market. According to the representative, they occasionally get requests for

fresh oysters and believe that an Alaskan product would be popular. Price is not much of a concern but the

product has to be high-quality. Current demand is estimated at 15 to 20 dozen per season. The provisioner

stated that with a consistent supply of quality product, volume could be much higher. They would be happy

to push fresh local oysters if they had a brochure or other sales materials.

Haa Aaní could potentially sell 30 to 40 dozen oysters per week in Juneau but will compete with Pearl of

Alaska and Canoe Lagoon. The ultimate potential for oyster sales in Juneau is higher, but lacking a local oyster

bar, for example, the near-term potential is somewhat limited.

Northern Southeast

In addition to demand in Juneau, there is potential for at least another 5 to 10 dozen oysters per week in the

Northern Southeast area including lodges in and near Juneau, Gustavus, Elfin Cove, and Hoonah.

Icy Strait Point (ISP) in Hoonah is a good potential market. The ISP food and beverage director has extensive

experience with Alaskan oysters and is very interested in providing his guests with an Alaska Native grown

oyster. ISP will host more than 60 large ships with capacity of more than 125,000 passengers in 2011. With

marketing support from Haa Aaní, ISP could become a significant seasonal market (perhaps even in the range

of 25 to 50 dozen per week from May to September). Hoonah also has frequent Alaska Marine Highway

service that may allow for less expensive shipping from Juneau to Hoonah. Prices in the range of $7 to $8 per

dozen (FOB Hoonah) for a high quality product were mentioned as likely acceptable.

Cruise Lines

LARGE SHIPS

There is some potential for selling oysters to large cruise lines. However, previous McDowell Group interviews

with executives of major cruise lines that visit Juneau revealed that price and logistical concerns would be

significant hurdles for Haa Aaní.

Price

High-quality Alaskan oysters, like other Alaskan seafood, may be attractive to cruise lines but price is a

significant factor. Cruise lines buy large volumes of food and expect to receive very low prices. When

discussing the potential purchase of produce grown in Southeast, one cruise executive stated “We expect

businesses that work with us to except tight margins. In the range of three to percent instead of the typical

25-30 percent.” This standard likely applies to seafood purchases. The cruise lines can buy oysters in Seattle

or Vancouver for $5 per dozen or less with no significant freight costs. It seems unlikely that major cruise lines

would be willing to pay $7 to $8 per dozen FOB Juneau.


Logistics

Logistics are potentially a greater issue than price. Executives have stated that there are extra costs and

inefficiencies related to taking on supplies in Juneau. Cruise ships are generally in port for six to eight hours

and deliveries must be made during that time frame. All deliveries need to clear a security check and the

product must be inspected and checked-in by ship personnel. This process can require more than an hour.

The greatest barrier for Haa Aaní may be related to dependable delivery. Cruise lines have no tolerance for

missed shipments. All batches of oysters must be tested for PSP before being sold. There are times,

particularly in the summer, when batches of oysters do not pass the test and cannot be sold. The result would

be an unfilled order. The potential for missed delivers is likely unacceptable to the cruise lines. Weather delays

could also be a factor in shipping oysters to Juneau within the tight cruise ship delivery schedule.

However, purchasing decisions can be based on political considerations and once Haa Aaní has established

reliable production and distribution systems an effort to contact large cruise lines may yield results.

SMALL SHIPS

Smaller cruise ships may offer a greater potential for Haa Aaní oysters, though the market is small. They have

more flexibility in procurement and like to offer their clientele local products when possible. These smaller

ships are likely to be somewhat less price sensitive, but also have the opportunity to procure oysters from

other suppliers in Puget Sound and in southern Southeast Alaska.

There will be five small cruise ships making ports of call in Juneau in 2011. This includes the Silver Shadow

(382 passengers), Bremen (164 passengers), and the Sea Bird and Sea Lion with 60 passengers each. These

ships will make a total of 36 port calls in Juneau; with passenger capacity of about 7,000. The Bremen and

Silver Shadow also stop in Ketchikan and could easily pick up oysters there (likely cheaper than Haa Aaní

oysters shipped to Juneau). The Sea Lion and Sea Bird turn around in Petersburg and may be able to acquire

Pearl of Alaska oysters there. Additionally, Alaskan Dream Cruises (Allen Marine) will begin operating the 42

passenger Alaskan Dream and the 78 passenger Admiralty Dream on four to eight day itineraries based out of

Sitka in 2011. All itineraries include stops in Juneau.

The 2011 itinerary for the German cruise line Hapag-Lloyd has one itinerary where the Bremen is scheduled

to “cruise in Yakutat Bay”. It is unclear whether the ship will actually dock in Yakutat but there is a possibility

that this type of vessel may be interested in adding oysters to its menu and perhaps adding a cultural

component to the visit which could involve interaction with local oyster growers.

American Cruise lines will be adding a new small ship to the Alaska market in 2012 that may provide an

opportunity for Haa Aaní. The 100-passenger ship (50 berths) will have a seven-day itinerary based out of

Juneau.

Yakutat

Haa Aaní will be able to sell some oysters in its home market of Yakutat. According to one knowledgeable

source, there could be demand for 75 dozen a week during the summer. Potential customers include direct


sales to locals and visitors, the Glacier Bear Lodge, Yakutat Lodge, and the Glass Door Bar. Without the added

burden of air freight charges Haa Aaní may be able to receive a relatively high price from local sales.

Lower 48 Wholesale Market

Representatives of the following large shellfish wholesalers were interviewed for this study. Notes from those

interviews are included in Appendix A:

• Marinelli Shellfish (San Francisco, CA)

• Penn Cove Shellfish (Coupeville, WA)

• Steve & Mike Shellfish Company (San Francisco, CA)

• K&B Foods (New York, NY)

• American Mussel Harvesters (N. Kingston, Rhode Island)

• JP’s Shellfish (Boston, MA)

• Alaska Feast (Bronx, NY)

• Foley Fish (Boston, MA)

• Alber Seafoods (San Francisco, CA)

• Pier 45 Seafood (San Francisco, CA)

Some oysters go through two levels of distribution with a large wholesaler (often times specialized) buying

significant quantities directly from the farmers and then selling to smaller local distributors who in turn sell to

restaurants and retail customers. Outlets such as oyster bars that purchase a high volume of oysters are more

likely to work with the first tier wholesalers (or directly with growers) whereas restaurants that purchase

smaller quantities may be more likely to buy oysters from a local distributor.

Wholesalers can serve customers across the country and, while the majority of their business comes from

restaurants and small retailers close to their location, it is not uncommon for a large oyster distributor in San

Francisco to send product to more distant locations such as Las Vegas, Houston and Chicago. Most of the

large oyster wholesalers either carry or have access to roughly the same oyster varieties.


Wholesale Pricing Potential

First tier distributors offer varying opinions on price points for high-quality Alaska oysters. Following are

excerpts from some of the interviews.

• Marinelli Shellfish – has purchased Alaska oysters before but quality was very inconsistent. They had

problems with grading, shelf-life, and packaging. Pays as much as $7 to $8 per dozen for oysters, but

says most of his customers come looking for something under $5 per dozen.

• Penn Cove Shellfish – “$6 per dozen (plus freight) would be fairly competitive with tray raised

oysters from B.C.; those would wholesale in the $8 per dozen range. Some of the B.C. tray raised

oysters go for $6.50 per dozen.”

• Steve & Mike Shellfish Company – “I get all the B.C. oysters I want delivered to my door for $4.50

per dozen, and that’s on the high end.” “We’re one of the top four or five largest oyster distributors

in the U.S. – 60 percent of my business comes from areas outside the West Coast.” Volume is about

1,000 bags a week. Interested in Alaska oysters but only for a low price

• JP’s Shellfish – they regularly bought 250 to 330 dozen Pearl of Alaska oysters per week for $7.20

(freight included) until recently when Pearl started to sell directly to restaurants. They buy 10,000

oysters a week from the Pacific Northwest (not including Alaska). They really liked the Pearl of Alaska

oysters.

• K&B Foods – They have purchased Alaska oysters in the past, and thought highly of them. Not much

supply of Alaskan product right now and what is available is expensive – had one producer offer him

product for $1.00 per oyster last year. That price is too high, but he’d be interested for $0.60 per

oyster or $7.20 per dozen (including freight). Estimated he could buy 2,000 to 3,000 per week at

those prices, if the quality and branding was good.

• American Mussel Harvesters – sells 200 dozen Canoe Lagoon oysters per week. Would not disclose

prices of certain varieties but said they pay $4 to $9 per dozen (including freight) for their product,

and “Alaska would be closer to the high-end.” Quality and consistency is important. They would be

interested in buying more Alaska oysters.

Wholesale Market Summary

There seems to be demand for Alaskan oysters even at premium prices, but there is still a high level of price

sensitivity. Depending on the market, freight from Yakutat can add $2.00 to $4.00 per dozen depending on

destination and volume. In order for Haa Aaní to be price competitive in the $7.00 to $8.00 per dozen

delivered range, they would need to price their product at about $5.00 to $5.50 per dozen to sell significant

volumes. Freight costs present challenges for Alaska farms in the West Coast wholesale market, relative to

West Coast farms, which have highway access to those same wholesale markets. It may actually be easier for

Alaska farmers to compete with other West Coast producers in East Coast wholesale markets, where all

producers face high cross-country freight costs. The allure of Alaska seafood may result in selling product at

higher prices than other West Coast competitors, offsetting Alaska’s higher freight cost disadvantage relative

to Lower 48 West Coast farms.


Freight into the Atlanta, Boston, New York, DC, and Miami markets currently ranges from $3.75 to $4.00 per

dozen. Haa Aaní may be able to sell some oysters to wholesalers at prices above $8.00 delivered but overall

volume would likely be significantly smaller.

Lower 48 Restaurant Market

There are generally two kinds of food service establishments to consider; buyers that specialize in oysters such

as oyster bars, and restaurants that carry multiple varieties and may use oysters in a variety of menu items.

Other operations may treat oyster sales more causally, offering only one type of oyster on the half shell as an

appetizer or offering oysters only occasionally as a special.

Oyster bar operators from New York, Boston, Seattle, Portland, Washington DC, San Francisco, and Chicago

were interviewed to gather opinions about marketability and value of Alaska oysters.

Conversations with oyster bar executive chefs suggest that the allure of an Alaska oyster is strong and the

product is very marketable. A few establishments commented on the high price of Alaska oysters, but most

noted that the premium was reasonable considering the shipping costs involved. Almost without exception,

executive chefs were happy to talk at length about Alaska oyster market appeal and pricing. The cultural

aspect generally piqued their interest. There are perhaps a few dozen upscale oyster bars across the U.S. that

have built clientele around their raw bar and attract significant business on a regular basis. Most raw bars

carry three to five varieties that are part of a more expansive seafood menu. Volume, pricing, and selection

vary widely by establishment.

Some restaurants offer a wide variety of oysters, like Elliott’s Oyster House in Seattle, which lists nearly 40

varieties of oysters on its menu. Elliott’s reportedly sells about 600 dozen oysters per week.

The highest volume oyster bar interviewed was Grand Central Oyster Bar, which features competitive prices

and a wide selection. Located in Grand Central Station, this oyster bar sees more foot traffic than any other

oyster bar in the world. Sandy, Grand Central’s oyster buyer, indicated he could move 100 dozen Alaska

oysters per week if the price was right (under $0.85 per oyster). Ethan from EaT: An Oyster Bar, one of

Portland’s busiest oyster bars, carries eight to 12 varieties and sells 200 to 300 dozen oysters per week (total).

Black Salt, an upscale DC oyster bar, carries six to 12 varieties and averages sales of 17 dozen per variety, per

week. Eddie Sweeney from Catch 35 in Chicago buys for two locations and moves 170 dozen per week. The

Anchor Oyster Bar in San Francisco, sells a couple thousand oysters a week and pays as much as $12.60 per

dozen for its oysters – some of which are FedEx’d from the East Coast.

OYSTER BAR/RESTAURANT PRICING POTENTIAL

Most upscale oyster bars sell Pacific oysters for $2.00 to $2.75 per oyster. Kumamotos and Olympias are often

$3.00 or more per oyster. A typical fine dining restaurant will have food costs in the neighborhood of 30 to

40 percent; however, the chef at EaT in Portland said they will go as high as 50 percent on their oysters

because, “that’s what attracts our customers.” Therefore, a $2.50 oyster at a raw bar with a 35 percent food

cost would cost the restaurant $0.88 per oyster (or $10.50/dozen).

Restaurant buyers indicated the highest price they paid for oysters was between $0.80 and $0.90 per oyster

($9.60/dz to $10.80/dz delivered). On the lower end, the raw bars interviewed tend to pay about $0.50 per


oyster, perhaps even lower if they happened to be located close to a farm. Several restaurants said $9.60 to

$10.20 per dozen (including freight) would be an attractive price for a high-quality, suspended tray Alaska

oyster.

Restaurant menus of some popular raw bars are included in the Appendix for reference.

Selling directly to oyster bars and restaurants will provide opportunities for premium pricing for a high-

quality, reliable product (well above that offered by the wholesale market). There are however other costs

involved including marketing, handling, and other logistical issues that will offset some of the premium

pricing. Selling 1,000 dozen oysters a week or more directly to restaurants would be challenging and likely

require significant marketing and logistical manpower.

As in the wholesale market, freight costs are a significant portion of the overall price paid by oyster bars and

restaurants. Many restaurants prefer to get the majority of their product from as few distributors as possible

and the relationship between restaurant and wholesaler is often quite strong. From the interviews conducted

for this study there seems to be good potential for Haa Aaní oysters in this market although it will require a

higher level of effort than selling oysters into the wholesale market.

Lower 48 Retail Market

Other than perhaps a chain store specifically featuring Alaskan seafood, retail outlets will probably offer less

market potential for sale of Haa Aaní oysters at premium prices. Retail customers typically do not differentiate

brands to the same extent as oyster bar customers and therefore competition will be based more on price.

Space in a seafood case is limited and unless the retailer feels they will be able to garner a significant

premium by carrying an Alaskan product, West Coast retailers may be less likely to choose Haa Aaní oysters

over less expensive Puget Sound or British Columbia oysters. The Santa Barbara Fish Market can buy Kusshi

oysters for $0.66 each ($7.92 per dozen) and Chef Creek oysters for $0.41 each ($4.92 per dozen) delivered.

Fanny Bay oysters from Washington were available from his broker for $0.49 per oyster ($5.88 per dozen).

This store typically carries a half dozen varieties and sells 10 to 200 dozen per week depending on the time of

year, the price, and the variety.

According to one grocer, a typical store mark-up

on oysters is about 30 percent. At this mark-up, an

oyster selling for $0.99 would cost the store about

$0.69 or about $8.30 per dozen. These figures

assume no dead-loss or spoilage. Kumomoto’s

selling for $1.49 each would cost the retailer

about $1.04 or $12.50 per dozen.

Stores with greater purchasing power, such as

Whole Foods, may be able to aggressively

negotiate better deals that smaller chains or

individual stores.


Mark Hernandez, regional seafood buyer for Northern California Whole Foods stores, indicated many Whole

Foods stores get their oysters from large distributors like Steve & Mike’s Shellfish. “Whole Foods doesn’t have

the distribution channels to deal with oysters,” he says. Whole Foods does, however, have experience buying

seafood out of Yakutat (having previously owned Yakutat Seafoods) and they still buy a significant volume of

product from Yakutat. The retail prices in the previous photos were confirmed for Whole Foods stores in

Portland, OR and Sonoma, CA. Kusshi oysters were selling for $1.49 in the Portland store. Fanny Bay oysters

sold in two separate Southern California Whole Foods stores were priced at $1.29 per oyster.

In Vancouver, British Columbia, Effingham Inlet oysters – a high-quality suspended tray oyster - were being

sold at Whole Foods for C$0.79 a piece. However, that store is located on the same street as the largest

oyster distributor in British Columbia – likely explaining the lower prices.

In April 2011, a vendor in Pike

Place Market in Seattle featured

oysters ranging from $6.99 per

dozen for “Pacific oysters” to

$13.99 per dozen for Kussi’s.

It is recommended that Haa Aaní explore the possibility of working with an upscale retailer as part of its

overall marketing mix. Retailer’s like Whole Foods, Wegman’s, or Trader Joe’s could handle enormous volume

and simplify sales logistics for Haa Aaní. However, there is likely to be significant price pressure for Haa Aaní’s

high-end product. Sealaska has already cultivated a relationship with Whole Foods so this would seem to be a

good starting point.

Finding the right person to contact at a national grocery chain can be difficult. There can be various levels of

regional and national buyers. Store seafood managers are generally required to purchase through regional

mangers although some stores may have more autonomy. One approach is to call or visit a store and talk to

the seafood manager. They know the company buyers and will be able to provide a sense of potential

demand for various oyster varieties. This “front-line” information can prove valuable in assessing that chain’s

market potential. Haa Aaní will eventually need to contact someone at the corporate level and, if there is

interest, submit paperwork to become a vendor.


International Markets

Communicating with top-notch oyster bars and restaurants in cities outside the U.S. is more difficult due to

language barriers and time zone differences. A marketing strategy could include contacting fine hotels in

cities such as Hong Kong, Beijing, Paris, London, Dubai, Tokyo, Sydney, Rio de Janeiro, Berlin, Madrid, Rome,

and Athens. Significant time and effort would be required to establish relationships with restaurants in these

or other foreign cities and sales volumes for each customer would be relatively low.

The Sheraton Hong Kong Hotel and Towers has a world-renowned oyster bar that prides itself on featuring

oysters from around the world, oyster prices at the Sheraton are far above what is typically seen state-side.

Shipping via Alaska Airlines to Anchorage and then FedEx to Hong Kong would be relatively time efficient but

expensive. The best way to test international markets may be to work through an existing Alaska seafood

processor doing business in Asia. Jim Erickson at Alaska Glacier Seafood’s in Juneau may be a good contact to

learn more about international opportunities.


Transportation, Logistics, and Quality

Shipping

Yakutat is fortunate to receive daily north-bound and south-bound jet service from Alaska Airlines. Except for

September, when north-bound morning flights can be full, shipping capacity should not be an issue. Due to

the current spike in fuel prices, cargo rates are relatively high when compared with rates over the last few

years. While it is unknown how fuel prices may trend in the future, freight costs will always have a significant

impact on the final cost of delivered product. Alaska Air Cargo Seafood Express rates, provided below, include

shipping charges as well as fuel and security surcharges, and taxes. Alaska Air Cargo hosts an online rate

calculator that simplifies estimating rates.2

Rates for shipping 30 to 159 dozen oysters to major markets served by Alaska Airlines currently range from

about $2.38 to $4.05 per dozen depending on final destination. The lowest air freight rates from Yakutat are

to Anchorage and Fairbanks. Rates for 325 dozen or more oysters range from $2.05 to $3.75. Rates for

shipping less than 30 dozen would be higher per dozen as they are based on minimum rate charges.

As an example, a dozen oysters that sell for $5.00 in Yakutat will cost $7.61 per dozen for a shipment to

Seattle of 30 to 159 dozen, $7.49 for a shipment of 160 to 324 dozen, and $7.22 for a shipment of 325

dozen or more. The rates below include packaging weight but exclude the cost of packaging, insurance, and

any additional transportation costs from the airport to the purchaser. Shipments of 30 to 159 dozen to

Juneau would equate to about $7.54 per dozen at a price of $5.00 and $8.04 at $5.50 per dozen.

Alaska Air Cargo Cost Per Dozen from Yakutat to Major Market Airports

Zone

Destination

30-159 dozen

(100# rate)

160-324 dozen

(500# rate)

325+ dozen

(1,000# rate)

2 Anchorage/Fairbanks $2.38 $2.22 $2.05

3 Southeast Alaska $2.54 $2.41 $2.22

4 Portland/Seattle $2.61 $2.49 $2.33

6 California, Nevada, Arizona $3.35 $3.20 $3.01

7 Austin/Chicago/Dallas/Denver Houston/Minneapolis

$3.50 $3.38 $3.19

8 Atlanta/Boston/New York Washington DC/Miami

$4.05 $3.91 $3.75

Source: Alaska Air Seafood Express Air Cargo Note: Rates are per dozen based on an average of 2.7 pounds per dozen shipped in 50 pound boxes with six pounds of packaging including the box. This results in about 16 to 17 dozen oysters per 50 pound box. Rates include $0.22/lb fuel and $0.04/lb security surcharge.

Additional delivery charges from the airport to the customer can also add significantly to oyster costs. For

example, Seattle-based Commodity Forwarders Incorporated (CFI) estimated that a shipment of 10 boxes

2 Seafood rates-http://www.alaskaair.com/as/www2/Cargo/images/Seafood-Express-Rates_20100301.pdf Rate calculator-http://cargo.alaskaair.com/Cargo%20Rate%20Calculator%20Web%20UI/CargoRateRequest.aspx


(weighing 50 pounds each) containing about 17 dozen oysters each, going to five different Seattle customers

would cost $97, or about $0.57 per dozen.

While some oysters are shipped via FedEx, this option costs significantly more than shipping via air freight

and is likely not feasible for shipping large quantities of Haa Aaní oysters. FedEx rates and surcharges can be

found at: http://fedex.com/us/service-guide/rates-surcharges/index.html. FedEx staff indicated various

discounts could be available depending on a number of factors.

Logistical Considerations

Testing

A Paralytic Shellfish Poisoning (PSP) test must be performed for every batch of oysters harvested. The test

costs $140 to $150 (including the Goldstreak fee). The only testing facility in Alaska is located in Palmer. Each

sample must contain at least 150 grams of drained weight (shucked) and must contain a minimum of 12

animals. The turnaround for testing is typically 24 to 48 hours.3 Growers generally harvest batches of oysters

once per week to every 10 days and hold them in temporary cool storage until test results are returned and

then ship the product.

Growers must submit a sample for PSP testing at least once a month, even during months when not be

selling oysters. The Department of Environment Conservation’s Uniform Shellfish Sampling Plan for Paralytic

Shellfish Poison (PSP) is available at: http://www.dec.state.ak.us/eh/docs/fss/Shellfish-Sample-Plan.pdf.

Additional information is available from the Alaska Sea Grant Marine Advisory Program at

http://seagrant.uaf.edu/bookstore/pubs/M-02.html

Packaging

There is a myriad of product packaging available, ranging from traditional wet-lock boxes to fully-lined

Styrofoam containers. Good quality packaging will help to preserve the freshness of the product and protect

it from damage during shipping. The fully-lined Styrofoam packaging provides the highest level of insulation

and protection but at a much higher cost. At a minimum, oysters should be packed in four mil plastic bags,

in a wet-lock box, cups facing up. A 50-pound box should have two of three gel packs included. Styrofoam

sheets may be added to the top, bottom and sides to provide additional insulation. Boxes should be securely

banded and clearly marked “perishable” and “this side up.” An Alaska Airlines representative stated that if

boxes are not on a pallet they cannot guarantee a wet-lock box will not be turned upside down by baggage

handlers (potentially allowing the oyster’s liquor to leak out). More information on shipping is available from

Sea Grant or the Alaska Seafood Marketing Institute at:

http://www.alaskaseafood.org/industry/qc/pages/pub-hwcs.html

Ground Shipping and Delivery

It is essential to work with – or become – a “known-shipper” with Alaska Airlines (or other carriers) to ship

oysters. Haa Aaní should consider establishing their holding facility as a certified screening facility with TSA. 3 Personal conversation with Ray RaLonde, April 2011


Becoming a TSA-approved certified shipper allows cargo check-in two hours before takeoff and has a lower

security screening fee. In addition, as a certified shipper TSA will generally not open up boxes for inspection.

Contact Shannon Stevens at Alaska Air or visit the following website for more information:

https://alaskacargo.custhelp.com/app/answers/detail/a_id/1

Shelf Life

Oysters can have a shelf life of two weeks or more if kept cool and moist. Restaurants and distributors

interviewed for this study infrequently cited shelf life as a problem. Haa Aaní oysters will need to be held in

storage for one to three days while a sample is being tested for PSP. Once cleared, the oysters can then be

shipped.

Oysters delivered to a large wholesaler will travel another day, possibly two, depending on flight schedules.

The oysters will spend one to three days in the wholesalers’ warehouse, who then may sell to another smaller

wholesaler/distributor, where they might sit for another couple days before final delivery to a restaurant. In

other words, it could take 10 days to reach a restaurant, which leaves little time for the restaurant to sell the

oysters while they are fresh. Oysters shipped directly to an oyster bar or restaurant would likely arrive within

three to five days after being removed from the water. As previously mentioned, good packaging will be

required to achieve the maximum shelf life for Haa Aaní oysters.

The University of Alaska Ketchikan Campus received a USDA grant in 2009 to study ways to extend the shelf

life of fresh oysters that could result in growers shipping their product via less expense but slower

transportation methods such as the Alaska Marine Highway System.

Oyster Quality

At a wholesale price of about $7.00 per dozen and up Haa Aaní will be competing with the very highest-

quality oysters on the market. Established brands include:4

• Kumamoto (WA/CA, Crassostrea sikamea)

• Effingham Inlet (BC, Crassostrea gigas)

• Kusshi (Deep Bay, BC, Crassostrea gigas)

• Olympia (WA, Ostrea lurida)

• Penn Cove Selects (BC, Crassostrea gigas)

• Beau Soleil (BC, Crassostrea virginica)

In addition to those listed above, Alaska oyster producers, such as Canoe Lagoon and Pearl of Alaska, have

created products that meet the quality needs of the high-end oyster market and have established strong

brand recognition. In order to receive a premium price, Haa Aaní will need to produce and deliver oysters of a

similar quality.

4 An interesting oyster evaluation table created by Penn Cove Shellfish is located in Appendix A.


Throughout this report all pricing discussions are based on the assumption that oysters are properly and

consistently graded and sized. It also assumed that logistical challenges are managed so as to preserve shelf

life to the maximum extent possible. Whether oysters are sold directly to restaurants/retailers or through a

distributor, the price paid will depend on product quality and careful logistics management. Suspended tray

culture technique is superior because it produces a fast growing, high-quality oyster. However, careful

logistics management is ultimately just as important in providing a quality product to the market. Additional

information on maintaining oyster quality can be obtained from Sea Grant at:

http://seagrant.uaf.edu/map/aquaculture/index.html


Organizational Considerations

One of the best opportunities Haa Aaní has to distinguish its oysters from other growers is through the

creation of a strong brand image. Creating a brand takes significant effort, time and expense. Whatever

branding strategies Haa Aaní pursues, the strategy should be well defined and in place before the first oyster

is sold.

Cooperative Distribution

One important consideration before developing a brand image is the concept of cooperative marketing. Will

all oysters sold by Haa Aaní be marketed under the same name? What about the potential for selling oysters

from Pearl of Alaska, which are bottom-cultured and different in appearance than Haa Aaní tray-culture-

oysters? Will those oysters need to be sold as Pearl of Alaska or will they be absorbed into the Haa Aaní brand

name? Marketing multiple brands has cost implications (collateral material and other marketing expenses) as

well as complicating the process of filling orders for specific varieties. Selling all oysters under one brand

name would lead to efficiencies in marketing that would reduce costs and may also allow for product

substitution (when products are relatively similar quality, size, and appearance) and result in fewer disruptions

in supply if oysters from one farm become unavailable.

Image and Branding

While quality and reliability are paramount to achieving a premium price, Haa Aaní will also find it useful to

sell its story. More and more consumers are interested in where their food comes from and who is producing

it. Southeast Alaska and Alaska Native culture provide an intriguing storyline. The image of Alaska Seafood is

meaningful for distributors, restaurants, and consumers. According to distributors, restaurant managers, and

chefs interviewed for this study, the image of Alaska seafood can be leveraged as a sales tool. Creating a

brand image and logo that incorporates the message “Alaskan” and “Alaska Native grown” will be important.

Regardless of the specific name, Haa Aaní oysters will be sold as “Alaskan” oysters so it may not necessarily be

as important to have the word “Alaska” in the name.

One option is to incorporate something unique regarding where the oysters are grown. Yakutat and Alaska,

in general, present a number of possible marketing angles. Some suggested names include Aurora Lites,

Snow Whites, Whale Tail, Cannon Beach Shooters, Fairweather or Situk Smalls. Branding as “Haa Aaní”

oysters is also an option.

Haa Aaní will want to produce high-quality point of sale pieces such as brochures, posters, and table tents

and provide them to end-users such as restaurants and retail outlets. One British Columbia grower has

utilized Facebook to successfully promote a brand image directly to the public

(http://www.facebook.com/effingoyster). Haa Aaní should consider marketing strategies through social

media outlets.

In the early 1990’s Yakutat oysters received some positive brand development when Yak-tat Kwaan threw a

potlatch for David Rockefeller Jr. when he visited the area. Mr. Rockefeller liked their oysters so much he

allowed the use of his likeness and quotes in marketing materials free of charge.


Appendices


Appendix A List of Contacts

Note: Those distributors with a name indicate the person McDowell Group made contact with.

Wholesalers/Distributors

Marinelli Shellfish - (Bill Marinelli) 206-870-0233 2383 S 200th St. Seatac WA 98198-5571 [email protected] www.marinellishellfish.com Notes: Perhaps the largest high-end oyster distributor (outside of vertically integrated companies like Taylor Shellfish Farms) in the U.S. Sells $10 million worth of oysters per year. Have purchased Alaska oysters before but quality was very inconsistent. Had problems with grading, shelf-life, and packaging. Pays as much as $7 to $8 per dozen for oysters, but says most of his customers come looking for something under $5 per dozen. Might be interested in Alaska oysters.

Penn Cove Shellfish - (Keith) 425-743-2033 PO Box 148 Coupeville WA 98239-0148 [email protected] www.penncoveshellfish.com Notes: “$6/dozen (plus freight) would be fairly competitive with tray raised oysters from B.C, those would wholesale in the $8/dozen range.” “Some of the B.C. tray raised oysters go for $6.50/dozen.” “Rob Tyron from Effingham Inlet does a great job marketing, they’re on Facebook/Twitter, and they blog – generates lots of buzz.””We sell 400 dozen Kusshi’s a week.” Indicated they’d be interested in buying Alaska oysters. Steve & Mike Shellfish Co., Inc - (Lou) 415-674-8611 Pier 5455 Ship B-9 San Francisco CA 94133 Notes: “I get all the B.C. oysters I want delivered to my door for $4.50/dozen, and that’s on the high end.” “We’re one of the top four or five largest oysters distributors in the U.S. – 60 percent of my business comes from areas outside the West Coast.” Volume is ~1,000 bags a week. Interested in Alaska oysters but only for a low price.

K&B Seafood - (Tom Kehoe) 176 Laurel Rd. East Northport NY 11731 www.kandbseafood.com [email protected] 631-261-8161 Notes: Have purchased Alaska oysters in the past, and thought highly of them. Not much supply of Alaskan product right now and what is available is expensive – had one producer offer him product for $1.00 per oyster last year. That price is too high, but he’d be interested for $0.60 per oyster or $7.20/dz (including freight), “Yes, there’s a market at that price.” Estimated he could buy 2,000 to 3,000 per week at those prices, if the quality and branding was good. Also exports to clients in Asia and runs another company called SeaFlight Logistics which does seafood shipping logistics. They are interested in buying Alaska oysters.


American Mussel Harvesters --- (Lauren Nutini) 165 Tidal Drive North Kingstown RI 02852 www.americanmussel.com [email protected] 401-294-8999 Notes: Sells 200 dozen Canoe Lagoon oysters per week. Would not disclose prices of certain varieties but said they pay $4 to $9 per dozen (including freight) for their product, and “Alaska would be closer to the high-end.” Quality and consistency is important. Would be interested in buying more Alaska oysters.

JP’s Shellfish --- (Jefferson) PO Box 666 Eliot ME 03903 www.jpshellfish.com [email protected] 207-439-6018 Notes: Bought from Pearl of Alaska until recently when Pearl started to sell directly to restaurants. Was buying 3,000 to 4,000 oysters per week (during his season) and paying $50 per 100-count ($6.00/dz), including freight, it worked out to $60 per 100-count to NY. They buy 10,000 oysters a week from Pacific Northwest (not including Alaska). He really liked the Pearl of Alaska oysters. JP’s sells mostly to other smaller wholesalers and oyster bars. Suggested branding it with a strong Alaska name, people really react to Alaska seafood. They would be interested in buying Alaska oysters.

Alaskan Feast --- (Jerry Laureano and Dan Kim) New Fulton Fish Market 800 Food Center Dr. – Unit 22 Bronx NY 10474 www.alaskanfeast.com [email protected] 718-842-2288 Notes: “We move large volumes of seafood, several container loads per week. 90 percent of our business is to other small distributors. They had concerns about shelf-life and durability of tray-grown oysters.” They buy beach grown from West Coast for $0.40 to $0.50 per oyster (delivered). They are not very interested in these tray grown oysters.

Foley Fish --- (Mike O’Connor) 24 West Howell St. Boston MA 02125 [email protected] www.foleyfish.com 800-225-9995 Notes: Buys 20 bags a week out of West Coast but laments, “West Coast shipping is so expensive!” Pays $4.40 per dozen (plus freight) for Chef’s Creek oysters (which are lower on the price scale). Interested in buying Alaska oysters. Alber Seafoods --- (Max Boland) 415-292-1640 Pier 45 Shed B Unit 4 San Francisco CA 94124-1013 www.alberseafoods.com 888-292-1640


Pier 45 Seafood --- (Mel Wickliffe) 45 Pier #11B San Francisco CA 94133-1005 415-409-3474 Note: Sells east coast oysters to West Coast clients. Market for West Coast oysters is very competitive.

DiCarlo Seafood Co., Inc. 842 Pioneer Ave Wilmington CA 90744-3749 www.dicarloseafood.com 310-830-3460

Smokey Bay Seafood Company Suite 309 – 896 Cambie Street Vancouver BC V6B 2P6 Canada 877-676-6539 www.smokeybay.com


OTHER OYSTER DISTRIBUTORS IN WASHINGTON STATE AND CALIFORNIA (SOURCE: URNER BARRY): Name City State Phone All Seas Wholesale, Inc San Francisco CA 415-206-7327 American Fish & Seafood Company Sacremento CA 775-972-3737 American Fish & Seafood, Inc Los Angeles CA 213-612-0350 American Sea Food Co, Inc San Diego CA 619-226-1500 Anderson Seafoods, Inc Anaheim CA 714-777-7100 Brady's Oyster, Inc Aberdeen WA 800-572-3252 Buz's Crab, Inc Redding CA 530-243-2120 Captain Salty's Seafood, Inc Garden Grove CA 714-891-5089 Central Coast Seafoods, Inc Atascadero CA 805-462-3474 Central Fish Company Fresno CA 559-237-2049 Chelsea Farms Olympia WA 360-866-8059 Chesapeake Fish Co, Inc San Diego CA 619-238-0526 City Sea Foods, Inc Los Angeles CA 213-626-5586 Crown Prince, Inc City of Industry CA 626-912-3700 Diess Seafood Anaheim CA 714-974-9513 Elwha Fish Company, Inc Port Angeles WA 360-457-3344 Farallon Fisheries San Francisco CA 650-583-3474 First Class Foods, Inc Hawthorne CA 310-676-2500 Fish King Seafood Company Burbank CA 818-841-7368 Fog City Trading Co, Inc Daly City CA 650-878-8678 GB Seafood Co, LLC Redmond WA 425-444-9092 Goldberg & Solovy Foods, Inc Los Angeles CA 323-581-6161 H & N Foods International Los Angeles CA 415-821-6637 Harvest Meat Company National City CA 619-477-0185 Hog Island Oyster Co Marshall CA 415-663-9218 Holly Seafood Company Los Angeles CA 213-625-2513 Hood Canal Oyster Co, Inc Silverdale WA 360-830-9039 Hood Canal Seafood Quilcene WA 360-765-3288 International Business Trading Corp Monterey Park CA 323-277-0000 Johnson & Gunstone Port Townsend WA 360-797-7302 Johnson Oyster Co, Inc Inverness CA 415-669-1149 Jordano's Food Service Santa Barbara CA 805-964-0611 K & C Food Sales, Inc Los Angeles CA 213-689-9566 K & M Packing Co Vernon CA 323-585-5318 K & S Seafood Company San Jose CA 408-294-7013 Kanaloa Imports Santa Barbara CA 805-966-5159 Kiem's Produce & Seafood San Francisco CA 415-550-1394 Long Beach Seafood Company Long Beach CA 562-435-5357 Los Angeles Fish & Oyster Company San Pedro CA 310-832-4249 Los Angeles Fish Company Los Angeles CA 213-629-1213 Minterbrook Oyster Company Gig Harbor WA 253-857-5251 Mitsubishi International Corporation Los Angeles CA 213-687-2800


Name City State Phone Monterey Fish Market Berkeley CA 510-525-5600 Mutual Fish Co, Inc Seattle WA 206-322-4368 Natco Worldwide Representatives Valencia CA 661-296-5999 New Day Fisheries, Inc Port Townsend WA 360-385-4600 New Zealand Seafood Vernon CA 323-584-2400 Nisbet Oyster Co, Inc Bay Center WA 360-875-6629 Nor-Cal Seafood Oakland CA 510-532-7823 Ocean Beauty Seafoods, Inc Seattle WA 206-286-2580 Ocean Crystal Seafood Los Angeles CA 213-612-0881 Osprey Seafood of California, Inc San Francisco CA 415-291-0156 Pacific Giant, Inc Vernon CA 323-587-5000 Pacific Harvest Seafoods, Inc San Juan Bautista CA 408-295-2455 Pacific Northwest Best Fish Co Ridgefield WA 360-887-4268 Pacific Shellfish, Inc San Diego CA 858-272-9940 Port Chatham Smoked Seafood Everett WA 425-407-4000 Purcell International Walnut Creek CA 925-933-6100 Qualy-Pak Specialty Foods, Inc San Pedro CA 310-518-3624 Royal Hawaiian Seafood San Francisco CA 415-206-2095 San Diego Seafood National City CA 619-474-4000 San Pedro Fish Market San Pedro CA 310-832-4251 Seabear Company Anacortes WA 360-293-4661 Seafood Center San Francisco CA 415-752-3496 Seafood Suppliers Corp San Francisco CA 415-834-0255 South Shores Seafood, Inc Anaheim CA 714-956-2722 Stagnaro Brothers Seafood Co, Inc Santa Cruz CA 831-423-1188 University Seafood & Poultry Company Seattle WA 206-632-3900 Westcott Bay Seafarms Friday Harbor WA 360-378-2489

Seafood Restaurants and Oyster Bars

McDowell Group was able to do personal interviewers with buyers and executive chefs from nine oyster bars.

Grand Central Oyster Bar (Sandy) New York, NY 212-490-6650 www.oysterbarny.com [email protected] Notes: Sells lots of oysters, maybe the most of any raw bar in U.S. Would buy 100 dozen per week for as much as $0.85 per oyster (freight included) if the quality and branding is good. Has a truck that can pick up product from Newark airport. Buys 95 percent of his product direct from farmers. Very interested.

Catch 35 Seafood Restaurant (Eddie Sweeney) Chicago, IL (2 locations) 312-346-3500 www.catch35.com [email protected]


Notes: Sells about 150 dozen high-end oysters per week. Pays a lot for Chefs Creek oysters from Foley Fish - $0.85 per oyster. Typically sell their oysters for $11.95 for half dozen. Very interested.

Blacksalt Washington, DC 202-342-9101 www.blacksaltrestaurant.com [email protected] Notes: Carries six to 12 varieties and sells 10 to 20 dozen per week of each variety. Highest he pays is $0.90 for Kumamoto’s but says $0.80 and below (including shipping) is an attractive price for Alaska Pacific oysters.

Emmett Watson’s Oyster Bar (Thurman) Seattle, WA 206-448-7721 [email protected] Notes: Sells 50 to 150 dozen per week. Typically pays $4.25 to $6.00 per dozen, and they try to stay on the cheaper side. Penn Cove Selects are the most popular. Also carry Fanny Bay, Gold Creek, and Deep Bay. Not very interested in Alaska oysters.

EaT: An Oyster Bar (Ethan) Portland, OR 503-281-1222 www.eatoysterbar.com [email protected] Notes: Sell 250 to 300 dozen oysters per week. Second largest oyster bar in Portland. Also wholesale to other restaurants, and trying to grow that business. Buys direct. Pays $5 to $11 per dozen depending on the variety and how marketable it is. Food costs for their oysters run 40 to 50 percent. Typically carry eight to 12 varieties. Very interested.

Bar Avignon (Jeremy) Portland, OR 503-517-0808 www.baravignon.com [email protected] Notes: Usually carries three types of oysters on their menu. Consumption spikes in the summer but it can be very hard to get product, “Things shut down last year during July/August.” Sells eight to 10 dozen per week of each variety. Pays $5.75 per dozen for lower-end Pacific’s but $12 for Kumamoto’s. Somewhat interested.

Anchor Oyster Bar (Roseanne Grimm) San Francisco, CA 415-431-3990 www.anchoroysterbar.com Notes: Buys mostly from farms but some from wholesalers. Has some product FedEx’d from Cape Cod, “and they are great.” Pays up to $1.05 per oyster but could go higher maybe depending on the oyster. Sells “a couple thousand oysters a week.” Very interested.

Grand Pu Bah (Steven) San Francisco, CA 415-255-8188 www.grandpubahrestaurant.com Notes: Sells a couple dozen each day of each oyster variety. Probably sells 50 to 60 dozen of all oysters each week. Pays $0.55 to $0.80 per oyster (shipping included) from distributors. Somewhat interested.


AquaGrill (Jeremy Marshall) New York, NY 212-274-0505 www.aquagrill.com [email protected] Notes: Sell 800+ dozen oysters per week and carries 25 to 30 varieties. Sell 65 dozen Canoe Lagoon’s a week. Likes the Canoe Lagoons very much – thinks there isn’t much to compare them to because they are so good (very deep cup). “We expect 5 percent loss on the oysters we buy, after that they want credit.” Would be very interested for $0.80 or less per oyster (shipping included). They have not had quality/shipping issues with Canoe Lagoons or any other suspended tray variety.

OTHER OYSTER BARS AND SEAFOOD RESTAURANTS THAT FEATURE OYSTERS ON THE HALF SHELL: Name City State Phone The Oceanaire 12 cities McGarvey’s Saloon Annapolis MD 410-263-5700 Seastar Restaurant & Raw Bar Bellevue WA 425-456-0010 Neptune Oyster Bar Boston MA 617-742-3474 Union Oyster House Boston MA 617-227-2750 Island Creek Oyster Bar Boston MA 617-532-5300 B&G Oysters Boston MA 617-423-0550 Citizen Public House & Oyster Bar Boston MA 617-450-9000 Blue Oyster Café & Lounge Campbell River BC 250-286-1131 The Publican Chicago IL 312-733-9555 C-House Chicago IL 312-523-0923 Perennial Chicago IL 312-733-9555 Fulton's on the River Chicago IL 312-822-0100 Shaw's Crab House & Oyster Bar Chicago IL 312-527-2722 Hugo's Frog Bar & Fish House Chicago IL 312-640-0999 Balsan Chicago IL 312-646-1400 Nick’s Fish Market Chicago IL 312-621-0200 Swankey's Oysters & Libations Denver CO 303-297-2399 Highland Pacific Restaurant & Oyster Bar Denver CO 303-477-6644 Argyll Gastro-Pub Denver CO 720-382-1117 Smitty's Oyster House Gibsons BC 604-886-4665 Seablue by Michael Mina - MGM Grand Las Vegas NV 702-891-3486 Rick Moonen's RM Seafood - Mandalay Bay Las Vegas NV 702-632-9300 Bouchon - Venetian Las Vegas NV 702-414-6200 Morels French Steakhouse & Bistro - Palazzo Las Vegas NV 702-607-6333 Todd English PUB - City Center Las Vegas NV 702-489-8080 Commes Ca Los Angeles CA 323-782-1104 Hungry Cat Los Angeles CA 323-462-2155 Kendall's Brasserie at the LA Music Center Los Angeles CA 213-973-7322 Providence Los Angeles CA 323-460-4491 Water Grill Los Angeles CA 213-891-0900 Craft Los Angeles CA 213-620-1588 BLT Steak LA West Hollywood CA 310-360-1950


Name City State Phone Monterey’s Fish House Monterey CA 831-373-4647 Sugarcane Raw Bar Grill Miami FL 786-369-0353 The River Seafood & Oyster Bar Miami FL 305-530-1915 Casablanca Seafood Bar & Grill Miami FL 305-371-7094 Quinn's Miami FL 305-673-6400 Pearl Oyster Bar New York NY 212-691-8211 The Mermaid Oyster Bar New York NY 212-260-0100 Ed's Chowder House New York NY 212-956-1288 Blue Ribbon New York NY 212-274-0404 Oscar’s Grille New York NY 212-872-4920 Momofuku New York NY 212-254-3500 Stanton Social New York NY 212-995-0099 Fishtail New York NY 212-754-1300 Meade’s New York NY 212-791-1818 Parlor Steakhouse New York NY 212-423-5888 Provence Restaurant & Bar New York NY 212-475-7500 Lure Fish Bar New York NY 212-431-7676 Snockey's Oyster & Crab House Philadelphia PA 215-339-9578 Oyster House Philadelphia PA 215-567-7683 Dan & Louis Oyster Bar Portland OR 503-227-5906 Thistle LLC Portland OR 503-472-9623 Jonathan's Portland OR 503-689-1051 Southpark Seafood Grill and Wine Bar Portland OR 503-326-1300 Wild Abandon Portland OR 503-232-4458 Wildwood Restaurant Portland OR 503-248-9663 Urban Farmer Portland OR 503-222-4900 Corbett Fish House Portland OR 503-246-4434 The Laughing Oyster Powell River BC 604-483-9775 Matt's Rotisserie & Oyster Lounge Redmond WA 425-376-0909 McGrath's Fish House Salem OR 360-514-9555 The Fishery San Diego CA 858-272-9985 Hog Island Oyster Co San Francisco CA 415-391-7117 Swan Oyster Depot San Francisco CA 415-673-1101 Scott's Seafood Bar & Grill San Francisco CA 925-934-1300 Kingfish San Francisco CA 650-343-1226 Scott's Restaurants Jack London Square San Francisco CA 510-444-3456 Mayes Oyster House San Francisco CA 415-885-1233 Grand Pu Bah San Francisco CA 415-255-8188 Franciscan Crab Restaurant San Francisco CA 415-362-7733 Café Rouge San Francisco CA 510-525-1440 Walnut Creek Yacht Club San Francisco CA 925-944-3474 The Dead Fish San Francisco CA 510-787-3323 Crab Landing San Francisco CA 650-712-1288 Eagle Café San Francisco CA 415-433-3689


Name City State Phone Epic Roasthouse San Francisco CA 415-369-9955 Anchor & Hope San Francisco CA 415-501-9100 Tadich Grill San Francisco CA 415-391-1849 Absinthe Brasserie & Bar San Francisco CA 415-551-1590 Sam's Chowder House San Francisco CA 650-712-0245 Bar Crudo San Francisco CA 415-956-0396 Zuni Café San Francisco CA 415-552-2522 Etta's Seafood Seattle WA 206-443-6000 Waterfront Seafood Grill Seattle WA 206-956-9171 Ray's Boathouse Seattle WA 206-789-3770 Elliott's Oyster House Seattle WA 206-623-4340 Chandler's Crabhouse Seattle WA 206-223-2722 Place Pigalle Restaurant Seattle WA 206-624-1756 Blueacre Seafood Seattle WA 206-659-0737 McCormick & Schmick's Seafood Seattle WA 206-623-5500 Ponti Seafood Grill Seattle WA 206-284-3000 The Brooklyn Seafood, Steak, & Oyster House Seattle WA 206-224-7000 The Crab Pot Restaurant & Bar Seattle WA 206-624-1890 Frank's Oyster House Seattle WA 206-525-0220 Shuckers Seattle WA 206-621-1984 El Guacho Seattle WA 206-728-1337 Flying Fish Restaurant Seattle WA 206-728-8595 Mountain Pride Sun Valley ID 208-725-5600 Rodney's Oyster House Toronto ON 416-363-8105 Rodney's Oyster House Vancouver BC 604-609-0080 Joe Fortes Seafood Restaurant Vancouver BC 604-669-1940 Coast Seafood Restaurant Vancouver BC 604-685-5010 The Sandbar Seafood Restaurant Vancouver BC 604-669-9030 Provence Marinaside Seafood Restaurant Vancouver BC 604-681-4144 Bridges Restaurant Vancouver BC 604-687-4400 Monk McQueens Fresh Seafood & Oyster Bar Vancouver BC 604-877-1351 Go Fish Ocean Emporium Vancouver BC 604-730-5040 The Shore Club Vancouver BC 604-899-4400 Oyster Seafood Restaurant Vancouver BC 604-899-0323 Blue Water Café & Raw Bar Vancouver BC 604-688-8078 Crabshack Grill and Oyster Bar Vancouver BC 604-907-2500 Chambar Vancouver BC 604-879-7119 Tony's Fish & Oyster Café Vancouver BC 604-683-7127 ShuRaku Japanese Restaurant Vancouver BC 604-687-6622 Tomokazu Japanese Restaurant Vancouver BC 604-279-9077 McGrath's Fish House Vancouver WA 360-514-9555 Ferris' Oyster Bar & Grill Victoria BC 250-360-1824 Hank's Oyster Bar Washington DC 202-462-4265 Sea Catch Restaurant & Raw Bar Washington DC 202-337-8855


Name City State Phone Bobby Van's Steakhouse Washington DC 202-589-0060 Sequoia Washington DC 202-944-4200 J. Pauls Washington DC 202-333-3450 Anthony's Seafood Restaurants Multiple WA/OR 425-455-0732 Bluewater Grill Multiple 602-277-3474

INTERNATIONAL OYSTER BARS: Name City Country Phone

Lan Club Beijing & Shanghai China +010-51096012/13

Dotcod Seafood Restaurant & Oyster Bar Hong Kong China +852-2810-6988

Knutsford Steak Chop & Oyster Bar Hong Kong China +2316-2381 Hilton Singapore Hotel Singapore Singapore +65-67-372-233 Lebua at State Tower Bangkok Thailand +66-2-624-9999 Bentley's Oyster Bar and Grill London UK +44-20-7734-4756 St. Pancras Grand Champagne, Oyster Bar & Restaurant London UK +44-20-7870-9900

Sheraton Hong Kong Hotel & Towers Hong Kong China +852-2369-1111

Bofinger Paris France +33-0-1-42-72-8782 Wilton's Restaurant & Oyster Bar London UK +44-0-0207-629-9955 Park Hyatt Dubai Dubai UAE +971-4-602-1234 Amwaj - Shangri-La Hotel Dubai UAE +971-4-393-9001 The Wharf Dubai UAE +971-4-366-6730 Ostrea Tokyo Japan +03-6215-6688 In Vino Moscow Russia +7-095-230-3430

Retailers

Whole Foods Inc. Mark Hernandez – Northern California Regional Seafood Buyer [email protected] 510-396-3324 cell

Santa Barbara Fish Market Santa Barbara, CA Brian – Owner 805-965-9564

Alaskan & Proud Grocery Store Juneau, AK 907-586-3101


Super Bear Grocery Store Juneau, AK 907-789-0173

Anchorage Wholesalers

Favco Inc-Alaska Seafood Processing and Distribution Anchorage, AK Bill Buck – Wholesale buyer 1205 W. 29th Ave Anchorage, AK 99505 907-278-1525/ Fax: 907-276-6656

10th & M Seafoods Anchorage, AK Dannon Southall – Wholesale buyer 1020 M St Anchorage 970-272-3474 https://www.10thandmseafoods.com/

Sagaya Wholesale Anchorage, AK Steve – Wholesale buyer 907-272-5173

Icy Strait Point Hoonah, AK Stu Campbell – Food and Beverage Director 907-523-3681

Small Ships

Hapag-Lloyd

Breman Kreuzfahrten GmbH Ballindamm 25D-20095 Hamburg, Germany Telephone +49(0)40 / 3001 4600Fax +49(0)40 / 3001 4601

Lindblad Expeditions Sea Bird/Sea Lion 96 Morton Street9th Floor New York, New York 100141 212-765-7740

Silversea Cruises Silver Shadow 110 East Broward Blvd Fort Lauderdale, FL 33301 Phone: 1-877-276-6816 or +1-954-522-2299 Fax: +1-954-356-5881


American Cruise Lines, Inc 741 Boston Post Road, Suite 200 Guilford, CT 06437 800-460-4518

Alaskan Dream Cruises P.O. Box 1049 Sitka, AK 99835 Office: 907-747-8100 www.alaskandreamcruises.com

Yacht Provisioning Juneau Julia Black 907-723-7259

Shipping and Logistics

Commodity Forwarders Incorporated P.J. Cramner – ANC Station Manager 907-243-1144 [email protected]

Alaska Airlines Shannon Stevens – Seafood/Perishables Cargo Sales Manager 907-266-7850 [email protected]

FedEx Erin McKenzie – Anchorage Senior Account Executive (Specializes in Seafood) 907-382-5550 [email protected]

ACE Air Cargo Greg Hawthorne – Director of Marketing 907-334-5111 office 907-351-6651 [email protected]

General Information

A wealth of background on oysters is available online, but one of the better sources we found was this site:

http://www.oysteraficionado.webs.com.

Date of Test 5/4/11NAME OF OYSTER SIZE SHELL MEAT BRINE SWEET SPAWNCHEF CREEK 2.5 to 3 4 4 3 4 0DABOB BAY 3.5 to 4 5 4 3 3 0DEEP BAY 3 4 4 3 4 0DEER CREEK 2.5 4 5 3 3 0EVENING COVE 3.5 to 4 4 4 3 3 0FANNY BAY 3 4 4 3 4 0FISH POINT 2.5 4 4 3 4 0GOLD CREEK 2.5 4 4 3 4 0GOLDEN MANTLE 3 4 4 3 5 0HUNTER POINT 4 5 5 3 4 0KUMAMOTO 2.5 to 3 5 5 3 3 0KUSSHI 2.5 5 4 3 3 0MALISPINA 3 4 4 3 3 0MIRADA 3.5 to 4 5 4 4 3 0MIYAGI 3 to 3.5 5 5 3 3 0OTTER COVE 4 5 4 3 3 0PEBBLE BEACH Temporarily UnavailablePENN COVE SELECTS 2.5 to 3 4 4 3 4 0RAINIER Temporarily UnavailableReach Island 3 5 4 4 3 0SISTER POINT 3.5 to 4 5 5 3 3 0SNOW CREEK Temporarily UnavailableSUN HOLLOW 3 to 3.5 4 5 3 4 0SUNSET BEACH 3.5 5 5 3 3 0STELLAR BAY 3 4 4 3 4 0TOTEM POINT 5 5 4 3 4 0

OYSTER EVALUATION SHEET SCALE OF REFERENCE 0 = LOW AND 5 = HIGH OYSTERS NOT AVAILABLE IF NO DATA SHOWN

IF SPAWN SIGN IS GREATER THAN 3 CHOOSE ANOTHER OYSTER


Appendix B: Selected Menus

*see following pages for printed menus for selected oyster bars and seafood restaurants.

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