Blue Harvest CEO: Good harvesting, larger sizes make for bullish scallop outlook

 The Atlantic scallops season is starting off with good harvesting and larger sizes –exactly the conditions vertically integrated scallop supplier Blue Harvest can capitalize on, the top exec tells IntraFish.

June 1st, 2017 08:10 GMT, Drew Cherry @ Intrafish.com

The Atlantic scallops season is just more than two months in, and so far, most suppliers are all smiles. “It’s been a great start to the season,” Blue Harvest Fisheries CEO Jeff Davis said. “We’ve seen good fishing, a good mix in sizes, and a lot of low-count U-10s and 10-20s.”

This is positive news not just for Blue Harvest, but for the sector in general, which is finding eager buyers for the larger sizes. “Tens, 12s and 15s always bring a premium price in the marketplace,” Davis said.

Davis said the strong harvests and good mix shows the management regime for the Atlantic scallop fishery is working well. “What we’re seeing right now is great proof that the science is right on,” Davis said. The New England Fishery Management Council (NEFMC) previously projected the landings for the East Coast Atlantic scallop fishery for the 2017-2018 season at 46.5 million pounds, an 18 percent increase over last season's harvest.

With demand picking up -- summer months are a high consumption season for fresh scallops -- all eyes right now are on the “open” fishing areas, Davis said, and the fresh market. These open areas, which traditionally have accounted for over 60 percent of the landings of scallops each season, are run under a timelimit fishery that is dependent on the number of days at sea, Davis said. As fresh demand picks up open areas will account for closer to 55-60 percent of overall harvests. “These open areas have been very productive,” Davis said. And this season, a lot more scallops have been landed earlier than expected.

Of course, Mother Nature may or may not cooperate, and fresh deliveries will largely depend on weather. In addition, as the season goes on the size mix can change. “The unknown always makes markets nervous,” Davis said. “Generally we like to do our open days earlier when we can count on better weather.”

The four closed areas are managed under an individual quota system, which allows for vessels to harvest at a more leisurely pace throughout the year and get a consistent flow of raw materials. “The fresh market really picks up in the summer,” Davis said. “When it comes to foodservice in particular, you’ll see customers pull fresh product faster.”

The shaping of the scallop industry’s business will occur over the next six weeks, Davis said, through around early July, which means it’s now an exciting time of year. “From there you know what you’ve got, and what your strategy needs to be for the rest of the year,” Davis said. While fresh is of interest, Blue Harvest wants to develop its frozen operations further. “We like a good mix, but in frozen, you have more stability to plan operations,” Davis noted.

Each supplier has its own philosophy, Davis noted, and said during the formation of Blue Harvest, the company honed in on the importance of vertical integration and traceability. The company has every intention of growing, and certainly more vessels are on the horizon, Davis said. It currently operates 15 vessels, which includes a couple of combination long line boats and scallopers, and regulations will allow the group to hold two more.

Though Blue Harvest is a relatively young company, its strategy is resonating with customers. “The best measurement of that was at the show in Boston,” Davis said. “We had a lot of customers very interested in the idea of vertical integration in their supply chain on multiple species.”

This “nets in the water” strategy will likely anchor Blue Harvest going forward, Davis said, even as it diversifies into other species. But much of where the company takes its species supply mix will depend on what customers want and what we can harvest.

And if anything, Blue Harvest is a customer-focused company, Davis said. The quality, supply and demand in scallops gives it a real platform for value growth. “The market will absorb scallops, and you can always bring scallops back on the menu in when prices come down, but nothing is going to move product better than good quality,” Davis said.

With the health of the resource, the mix of sizes and Blue Harvest’s processing capabilities, the group is hitting a sweet spot of being able to cater to a wide range of customer demands. "There's room all the way around for growth," Davis said.

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