An expanding aquaculture sector in Maine has prompted a multi-year, interdisciplinary collaborative research project to gain a better understanding of the seafood sector’s value chain. 

The findings paint a picture of the challenges and opportunities facing Maine’s seafood producers as they strive to expand their markets; but they also reinforce the state’s unique value proposition when it comes to fresh, delicious seafood. 

“Covid had impacted markets pretty dramatically. As you know, the restaurant sector closed down almost overnight. And so, we were trying to understand the alternative options for growers in terms of getting their product to market. So that was the genesis for that project,” says Sebastian Belle, executive director of the Maine Aquaculture Association (MAA).

The MAA spearheaded the collaborative research project titled, Expanding Maine’s Blue Economy, involving researchers from the Gulf of Maine Research Institute (GMRI), the University of Maine’s School of Economics, and the Island Institute, with funding from Maine Sea Grant. 

Tracking trends

The project began more than four years ago and included interviews with seafood producers, wholesalers, processors, distributors, retailers and chefs. It provided insights on the entire seafood supply chain, and identified bottlenecks in and opportunities for expanding the market for Maine’s seafood produce.  

One interesting finding from the study was the shift toward direct distribution, where growers have begun shipping directly to consumers, either through mail or by creating their own local distribution networks, Belle notes. 

“And some of the growers were learning some hard lessons about what’s the cost of direct distribution versus what’s the return on investment. A lot of people were excited about direct distribution,” he adds. 

This trend toward direct-to-consumer distribution, facilitated by online e-commerce platforms, gained increased traction during and after the pandemic. 

“We saw that as a trend. But what we didn’t see and what we discovered was that sometimes growers don’t accurately account for the costs in doing that. They get excited about the price they’re being paid, but they’re forgetting that there are additional costs in terms of shipping, in terms of how you collect the money,” Belle says.

The study also revealed that despite a strong market for Maine-grown seafood across the U.S., many of the products remain within the state. 

“We were surprised at the level of distribution within the state. We thought a lot more product was going out of the state, but it turned out that the markets within Maine were very strong and were definitely accounting for a significant portion of the product that was being grown here in Maine,” says Belle.

This may be changing soon, however, as the same study has revealed nearly 85 percent of producers are planning to expand their business within the next two to three years. To do this, industry must address current challenges, particularly when it comes to logistics and the distribution network.

Hitchhiking with lobster

One aspect of the project is an assessment of the seafood supply chain, identifying the businesses involved and the bottlenecks in expanding the market. This part was conducted by scientists at GMRI, examining the “middle of the supply chain,” assessing how producers are getting their products to market and what their biggest challenges are. 

“There was a heavy reliance on the existing infrastructure, which was not necessarily suitable for shellfish aquaculture, for example,” notes Kanae Tokunaga, senior scientist at GMRI. “They had to hitchhike with the lobster (truck), for example. There is an established lobster supply chain that can move products from Maine to out-of-state. If there’s a space in the truck, they can take shellfish products. But what if the lobster fishery had a lot of products that they needed to transport?”

Maine is the leading source of lobster produce in the U.S. and holds a relatively stable infrastructure for storage, processing and distribution. Many shellfish producers in Maine, on the other hand, are typically smaller, boutique growers with no established distribution network for handling the product from farm to market. 

“They are utilizing existing seafood infrastructure that are built for lobsters and groundfish, and they are not always suitable and up-to-standard for products like oysters that require more stringent food safety care,” notes Tokunaga.

The limited availability of canneries within the state was also identified as a challenge for producers, serving as a bottleneck for innovation in value-added products or for prolonging shelf life, Tokunaga adds.

Coastal challenges

Maine is famous for its pristine waters that produce some of the freshest, tastiest seafood. This attribute can be a double-edged sword for producers, particularly those located in the rural parts of the state, as they struggle to get their products to market the quickest way possible. 

And the issue is not just logistics; it’s geography.

“If you follow the coast of Maine, north and east towards Canada… that area is very rural and is dominated by lobster fishing right now,” explains Christian Brayden, project manager with the Maine Aquaculture Association.
Getting seafood products from these rural areas to the cities and main markets, like Boston and Portland, can take several hours. 

Oyster farmers, for example, would have very limited options for selling their oysters. 

“There aren’t enough farmers in that area that the local shellfish dealers would want to buy oysters. They’ll buy clams, they’ll buy lobsters, but there’s not enough oysters around for them to buy. Then (the farmers) are stuck with trying to sell oysters on a really local scale, maybe out of the back of their truck or to local restaurants,” explains Brayden.

“Especially for a really small farmer, they can’t always afford the time or the money to drive to Portland or drive to Boston… So there’s this really big mismatch between people who want some aggregated pickup, whether it’s a van that picks up from multiple farms or filling a small reefer truck. But to get their product to market more easily and cheaper is a really big issue.”

With a majority of aquaculture producers in Maine indicating they plan to expand their business in the near-term, this logistical challenge is increasingly relevant. 

Brayden says there has been a big focus on oysters and connecting oyster growers to new markets. This aspect of the project looked at consumer preferences to gain insight on where these new markets are and what their buying patterns are.

“Then the other part is the logistics of it. Through this work, we’ll be able to better identify patterns of people who have different methods that work for them. For some people, (that might be) direct to consumer, shipping oysters via UPS overnight to, say, Utah,” Brayden says.

Scalability

With a majority of seafood growers planning to expand their market, scalability becomes an important consideration. But expanding seafood production is not as easy, or as quick, as one would hope.

Leasing and permitting for new farms can take up to three years, so even when a grower begins the process of expanding production, it can still take some time before a scaled-up operation can be fully in place.

“We’re looking at four years before your first oyster sold and your first dollar back,” says Brayden. “The expansion is taking a lot of time to happen. It’s a very bottom-up approach for these small businesses all across Maine who are trying to grow just bit by bit, but it takes time to do it.”

He adds, however, that many producers that began their journey to expand their business a few years ago are now starting to reap the rewards, particularly in the oyster sector.

“They’re the ones who are really driving these new markets that they’re trying to pursue,” Brayden says.

There is also the question of, ‘How big is too big?’ Part of Maine’s charm is its ‘boutique’ style aquaculture, where quality always trumps quantity.

GMRI’s Tokunaga says it’s something producers in the state will have to reflect on.

“In order to move up to the next level of market, there also needs to be some volume. Maine has really done a good job of establishing brand recognition, especially among the oyster aquaculture. And that comes with the idea that they are boutique farms producing high-quality products, capturing the premium in the market,” she says.

The risk of increasing production volume is potentially losing out on that premium market.

“How do you achieve both?” asks Tokunaga. “That can also be an identity issue for Maine’s seafood sector.”

Growth trajectory

Challenges and bottlenecks, notwithstanding, Maine’s aquaculture sector has been steadily growing.

Data from the MAA shows that since 2007, the economic impact of aquaculture has skyrocketed from US$50 million to $137 million, with some 200 farms creating more than 700 full-time employment.

The diversity of the state’s aquaculture sector has also flourished, not only with the species produced – shellfish, crustaceans, finfish and seaweed – but the systems in which they are grown, both at sea and on land.

Logistically, fresh products from Maine can reach 130 million consumers just within a 24-hour truck drive – Chicago to the east and Atlanta to the north. “We are very well-positioned to hit those markets with fresh product,” says Belle.

The state also benefits from some of the highest water quality levels among other U.S. jurisdictions, consistently ranking in the top five across the country.

“We also still have a working waterfront in Maine,” Belle points out. “In many of the other states, particularly on the East Coast, the working waterfront has essentially disappeared or been consolidated into industrial hubs like Gloucester or New Bedford. But in Maine, virtually every community you go to along the coast of Maine still has a working waterfront, and aquaculture has become part of that working waterfront.”

For its part, the MAA has established programs and initiatives designed to help growers build and succeed in their business, through advocacy, business support services, workforce development and research.

“We view this as an economic development exercise,” says Belle. “In order for economic development to occur, you need a business climate which is going to support people’s willingness to risk capital. You need a business climate that people can come into and say, ‘Okay, I think there’s some predictability here, and I think that we are willing to risk some capital.’”

Belle is also optimistic about the sector’s sustainable growth prospects, as more young people enter the aquaculture sector, oftentimes with fresh, innovative ideas that will further propel the sector to reach its growth potential.

“We won’t become a China (in the aquaculture world), but we will see slow but steady growth in the sector,” Belle says.