Pride, Refrigeration and the Price of Fish
March 1, 2020
Laying against the dock was a power scow with a mounded deck load of salmon. This was one of those 88-foot shovel-nosed wood "tenders" that had made its way from Ketchikan to a processor on the Guemes Channel in Anacortes. The load of pinks was piled high, barely contained by the traditional, "bin board" deck layout of the WWII surplus scows that had become the workhorse for moving fish and freight around Alaska. "There were just too many fish in South East Alaska for the processors to handle," the crew explained. No one seemed concerned that there was little to no ice left after the three day trip down the inland passage.
This was the early 1970's when "dry" seiners, gillnetters and tenders were the norm. The importance of quality wasn't a priority for most people; canned salmon was king. Off in the future were the Magnuson-Stevens Act, the roller-coaster of Asian markets, crazy inflation and interest rates of the early 1980's and then the punishing, price crushing, relentless upward trajectory of farmed salmon's market share in the late 1990's and early 2000's. All events that helped the industry recognize that markets couldn't be taken for granted.
A few industry pioneers were "tanking" their boats. For wood boats this was a process of installing structural bulkheads, lining the hold with carefully supported plywood, then fiber-glassing the inside to convert the hold into a watertight tank suitable for filling with seawater up to the top of the hatch coaming.
A tanking conversion of one of the 88-foot wood power scows was done alongside the West Wall at Fishermen's Terminal in the early 70's. The project entailed cutting down two of the overly generous number of solid longitudinal, deck to hull, bulkheads to make way for a fiberglass over plywood below-deck tank on each side. Although some boats were opting for slush ice, this owner chose to chill his fish with Refrigerated Seawater (RSW). Two galvanized "box chillers" weighing more than a ton each were installed under the deck, generators and pumping systems were installed in a new machine room along with electrical distribution, compressors, condensers and other components that make up an RSW system. The old scow had been given a new life as a state-of-the-art tender.
The quality of fish was so much better that tanking seiners and tenders became the norm and the practice was later required by processors – for seiners, the edict finally came out, no more dry boats.
During the 1980's, Port Townsend Boatworks – the shipyard predecessor to Integrated Marine Systems – was kept busy setting up wood, fiberglass and steel vessels for RSW systems. Wood vessels required tanking, fiberglass and steel vessels usually required insulation and some structural work, and almost all needed fiberglass liners. RSW systems arrived at the shipyard as components on pallets. It was up to the shipyard to install the generators, pumps, plumbing, refrigeration "parts system" and the myriad of other parts needed for a working RSW system. Usually this entailed redesigning the vessel's engine room. Once things were installed and ready, refrigeration technicians would come in and plumb the interconnection between components located around the vessel's machine or engine room.
For a few vessels this seemed like the most viable approach but for most, since the machine space was usually being redesigned anyway, it made more sense to design in the space to install a self-contained refrigeration system. This required much less installation labor and offered more quality control in the factory environment while the system was being built, fewer joints to leak and less space overall with a much cleaner more compact system. Although this seemed like a worthy concept it took years to become reality.
The first breakthrough came around 1989; a patented chiller design that was about one-third the size and weight of competing chillers on the market at the time. The Seiner Chasina was looking to replace a bank of three 6-inch barrel chillers on the boat's 15-ton system, making the generous offer of being a test platform for one 6-inch by 6-inch "Turbo Chiller" in place of the bank of three 6-inch chillers – the one Turbo Chiller, basically the same size as one of the three being replaced, outperformed the whole bank. The name "Turbo Chiller" was later changed to "Hydro Chiller" because of a trademark conflict.
The second breakthrough came when a Bristol Bay fisherman that had been a customer on other projects, asked if a 7-1/2-ton self-contained RSW system could be made that would fit in what was then a much-too-small space. Need, challenge and opportunity drive innovation. Bristol Bay and the Aleutian Peninsula gillnet fleets looked like the biggest opportunity for compact self-contained RSW systems, here was the need, challenge and opportunity. After numerous sketches and trial modeling it looked like it could be done – the answer was yes. The old adage, "one-percent inspiration and 99 percent perspiration" proved true.
This first 7.5-ton self-contained all-in-one refrigeration system, charged and ready for operation and driven with a hydraulic pump half the size of competitor's systems was met with disbelief. The next year a few more "early adopter" fishermen ordered systems. These proved they were more than a match for competitors. The systems were lighter, required less space and didn't need expensive refrigeration technicians connecting pieces in the field and therefore were easier to easier to install. No more installing systems in pieces, field-connected and driven with a monstrous hydraulic pump wasting power and dragging down the main engine.
Kvichak Marine Industries recognized the system's benefits and started installing them on all new gillnet vessels, ordering eight in 1994. Processors and fishermen were awakening to the opportunity provided by refrigerating the fleet, the run was up, and ex-vessel fish prices were still reasonable.
In 1995, the dam broke, bringing more orders than could be handled with the small-scale production system IMS had in place. The decision was made to close the shipyard and put all the eggs in the refrigeration basket. It was a mad scramble getting a new production system set up and manufacturing all the systems that spring. Fingers were crossed as they all went to work in the fleet that year. Thankfully, the new systems worked very well, feedback was positive, and the system soon became the standard of the industry.
An economic storm cloud was brewing on the horizon.
New system orders for the 1996 season were less than 1995 but still in good numbers. The perfect storm hit in 1997, as low runs coincided with the crushing effect on prices attributed to the now easy and abundant supply of farmed fish on the market. Fishermen were discouraged, sometimes ending up with less money at the end of the season than they had started with. The bright spots were few and far between in Alaska's salmon industry.
Average all-species aggregate ex-vessel salmon prices bottomed out in 2002 at 26 cents per pound. Processing plants were closing, fishermen were hanging it up, and gloom was everywhere. Shifts in food production had rendered Alaska's salmon industry non-competitive in a world that had moved on. One economic study done by a very reputable firm for the Alaska Limited Entry Commission predicted there was a 99 percent probability future sockeye prices would not exceed $0.75 per pound by 2020 and 50 percent probability that they would stay below $0.40 per pound over that same time period. The future based on commodity pricing in a supply and demand model looked grim.
They must not have understood the tenacity and pride fishermen have in their way of life. Fortunately, a few pioneering fishermen and processors were already quietly laying the groundwork for a North Pacific fishing revolution. Fueled by a passion for delivering the true taste of wild-caught fish, these early innovators focused on quality. Consumer trends were changing and seafood from the Pacific Northwest and Alaska had a compelling advantage – the heritage behind the product – its natural wild origin, its sustainable management, superior taste and a story that speaks directly to this new emerging market.
Consumers were changing. Wal-Mart, Costco and other mainstream retailers were clearing out aisles to make way for natural and organic foods. With explosive double-digit year-over-year growth, chains were clamoring for a share of this fastest growing segment of food sales. Earning a place in the aisles of these retailers wasn't going to be easy; they were serious about what they were buying and how it was handled. Their buyers would be standing on the dock taking temperatures, in the lab measuring bacteria count, tasting samples, and tracking sales statistics. If you didn't get it right, they wouldn't be buying your fish.
Consumers wanted to know where their food came from – "pure, simple, clean and sustainable." Those who track trends claim that national brands lost their luster, private labels were in, and small producers were making inroads into national distribution channels that were not available just a few years ago. The market was speaking to the fishing industry, and those who got "onboard" had the chance to prosper. This would be an unfulfilled opportunity until the industry embraced an unwavering commitment to quality and quality in seafood is synonymous with chilling – chilling from the point of harvest and handling with care.
The industry began to claw its way back; fishers were taking pride in the product they delivered. After a 12-year decline while farm-raised salmon gained market share, Alaska salmon was finally finding a unique place in the consumer mind and was no longer a commodity. Transformation of the North Pacific and Alaska fishing industry was not limited to Alaska salmon; you could see it in every fishery sector. Poor quality was no longer an option if you wanted to stay in business. Chilling pollock, cod, tuna – any species – as quickly as possible and keeping it cold was what fish buyers expected.
The Pacific Northwest and Alaska have one of the greatest natural seafood resources on the planet. Markets should not be taken for granted. The consumer's experience depends on maintaining quality – from the moment your fish is caught all the way through the supply chain to the meal where it is consumed. As fishers, your care and handling establishes the first link in the cold chain. Quality lost in the first few hours while the fish is in your care can never be recovered. The consumer sitting down to a meal will taste quality in the first bite. Their experience must be a good one in order for you and the rest of the industry to succeed.