Anna Marie Seafood

For most U.S. shrimpers, the outlook is bleak. The challenges from low global prices and rising domestic costs are huge. The strategy chosen by Anna Marie Seafood, to market directly to consumers seeking higher quality products, not only is sensible, it may well be the only sensible response by anyone in the industry.

The technology for onboard freezing is neither exotic nor expensive, and Lance is trying to teach what he’s learned about dockside freezing (not as profitable) and onboard freezing (more profitable) to help out the industry. He believes that other shrimpers can easily adopt his net technologies as well. “Most fishermen believe that because there is a hole in the net, they’re losing product. But using TEDs and bycatch reduction devices actually lessens your work—you’re just losing bycatch, not product.”

The direct marketing by Anna Marie also seems easily replicable. To be sure, Lance caught some lucky breaks from WBB’s assistance. But it’s also true that Anna Marie faced bigger challenges in pioneering the model and creating direct marketing relationships. It will be easier for other shrimpers to follow.

Despite his growing success, Lance is always struggling to balance profit with the up-front costs of innovation. Here are some of the serious challenges that remain:

• Financial Stability: The biggest problem Anna Marie Seafood faces is, frankly, its own survival. The company posted net losses in three of the last four years. The loss in 2007 was especially significant, much of it due to the purchase of the onboard flash freezer. Sales are growing, but the cost of goods is growing faster. With total liabilities exceeding assets, the company will have to dramatically expand sales or cut costs in the very near future.
  
  
• Sharpen the Niche: Lance believes he can expand sales if he steadily improves the quality of the product and consumer awareness of how Anna Marie Seafood provides that quality. “I’d like to keep selling to wholesalers and grocery stores, but I’d also like to take some of the premium stuff and try to start getting ten or twelve dollars per pound. People are already paying this amount in middle of the country and they don’t even know where it’s coming from.”
  
  
• Scaling Up: As Anna Marie Seafood discusses new, expanded contracts with Rouses, Whole Foods Market, and FedEx, the big challenge is guaranteeing delivery of significantly more product. Lance will need to deploy more boats and crew—while maintaining quality control—for these new deals to succeed. He needs not only to recruit more boats but also to find the financing to equip them with onboard freezing equipment.
  
  
• Quality Standards: A business strategy that depends on quality products also requires that the standards be protected. Anna Marie Seafood has been working with its longest standing client, Rouses, to ensure that the standards remain strong. But as a result of its recent acquisition, Rouses has grown to 34 grocery stores, and Lance is concerned that “they are kind of acting like a Walmart, trying to dictate prices.” Moreover, the store has been labeling some farmed shrimp as wild shrimp.
  
  
• Freshness: There are still purists who believe that frozen shrimp is an inherently inferior product. Lance counters that “the reality is, it’s only as fresh as you can get it to the customer, and you’re out on the water for days at a time.” But other shrimpers might undercut the frozen product by making more frequent, shorter hauls.

Lance sees his own evolution as emblematic of big changes ahead. “For years, fishermen and farmers were slaves to industry. Now there’s a whole new generation of consumers. Fishermen need to take a look at what we’re doing. I’m really putting myself and my business out there, but the opportunities are so big that many more fishermen could do the same.”