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Set your sights on value-added seafood.

Everyone knows wealthy nations get that way by adding value to things. They make little things out of big things; finished goods out of raw materials. Alaskans can make many more millions from our fish resources, and we can do it with the help of the king of value added - Japan.

Japan sucked in a record number of Alaska fish during 1990. As usual, salmon exports led the way. But most were sent there dressed and frozen.' The added value happens way downstream, when the Japanese hack big pieces into little chunks for obento box lunches, fillets and other products.

Alaskans have got to get out of the raw material mindset and into business not as usual. We're in the global food marketing business, and we need to start acting like it. Last summer, Doug Barry of the Alaska Center for International Business visited the fish markets and checkout lines of Japan. The following are several of his suggestions on how Alaskans might profit from a changed perspective.

Made-in-Chile coho salmon are joining Alaska's competitors in a race for the pocketbooks and palates of Japanese consumers. These salmon look great, and Japanese buyers are terribly impressed. Alaskans can fight back by taking some of our product off the commodity markets and selling. fillets direct to wholesalers and retailers.

One Japanese buyer started doing this last season with a processor in Cordova. He reasons that labor and land prices are so high in Japan that it makes sense to let Alaska producers add more value. Among other advantages for the importer, there are no surprises after the fish get to Japan, and his customers can see that the fillets are made from top-grade fish. The results: Happy customers, premium prices for a premium product, return business.

Alaskans need to identify the wholesalers who sell fish to the Japanese hotels and posh restaurants. We can supply fresh fish in season on a just-in-time basis. If you knew what these outlets get for a few slivers of salmon, you'd consider asking for your Permanent Fund dividends in pinks and silvers.

Staking a claim in these fancy eateries is more than just good business sense. Alaskans need to aggressively establish the channel, then defend this market share from new market entrants like those Chileans and Norwegians.

On the fresh-frozen side, we need to find out why only Swedish salmon are in the airport shops at Chitose (Anchorage's sister city) Airport in Hokkaido (Alaska's sister state). With 30 fully loaded 747s arriving from Tokyo every day, it's appalling that these thousands of Japanese tourists are deprived of an opportunity to buy Alaska salmon of the value-added kind.

Alaskans must seriously consider first offering a quality control program for fish handlers, cutters and wrappers, and then promoting the program as a caring response to the needs of the ultra-picky Japanese consumers. Fisheries expert Tom Asakawa of the U.S. Embassy in Tokyo notes that the Japanese Overseas Fisheries Corp. might throw in some money or provide trainers. An effort of this kind by individual cooperatives or aquaculture districts could provide a competitive edge over other Alaska fish as well as those from Outside.

In addition to pushing salmon and other fish products as generic Alaskan - or with the less desirable tag of North Pacific - Alaskans can provide the fish with a regional identity. Some salmon, such as Copper River reds, are already known by Japanese wholesalers and some retailers, but usually not by the consumer. Giving the fish the personality of a particular region or river system is consistent with what Japanese producers of yellowtail and sea bream are doing in their home market.

Sense of place sells in Japan, and largely intangible differences are sought to appeal to consumer whim. Asakawa suggests Alaskans should adopt regional logos and packaging, piggybacking on what the Alaska Seafood Marketing Institute is already doing for Alaska's fish as a whole.

Other Japanese fish specialists advised during visits there last summer that Alaska needs to experiment with new product forms. One source said that canned salmon was about to make a comeback in Japan, but added that an attractive, easy-to-open container is needed. Several famous Tokyo geishas were spotted in Anchorage last summer buying hundreds of ordinary cans of salmon for friends and family back home.

There is also a feeling that the burgeoning snack food market in Japan holds promise for salmon jerky and, for the health conscious, lightly salted smoked salmon. Emphasizing to an even greater extent the " wild," drug-free nature of all Alaska salmon products is considered a good strategy against competitors marketing farmed fish that's been exposed to antibiotics and other man-made products.

Another product possibility is undersized salmon. Japanese like small, whole mackerel and other species that are cooked, marinated in a sweet soy sauce, and served chilled with a cold beer. Our salmon hatcheries and their processing partners may find a market for a small portion of the fish they raise in younger-than-adult life stages.

New, more promising market channels now beckon for some of these kinds of products. For example, a company called Kiosk operates little take-away shops in railroad stations all over Japan. Halibut chips or salmon jerky could be sold directly through this chain without going through the tangled web of the Japanese fish distribution system.

None of this suggests that products and initiative are the only things standing in the way of an Alaska value-added bonanza. There are some creative marketers out there.

And, of course, it has not been in the interests of the Japanese to radically change their buying patterns. To a large extent, they still prefer to import raw products and add value downstream.

Japanese-owned processing plants in Alaska may be even more unwilling to break with tradition. But we must continue to remind our Japanese friends and customers and some of their agents in Seattle that there is mutual advantage in letting us add more value.

Meanwhile, we must be relentless in developing new products and marketing channels.
COPYRIGHT 1990 Alaska Business Publishing Company, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1990 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Seize the Opportunity
Author:Kim, John
Publication:Alaska Business Monthly
Date:Dec 1, 1990
Words:1002
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