Processors use the Certified Quality Reader (CQR) to improve quality from fisheries and earn a premium price for higher quality lots.
Future Value Creation
In year one, thresholds for quality measures from individual fishermen will develop. By year two, fishermen above the threshold will receive a price bonus, and those below it will not receive a bonus. Lower-quality fishermen will be given tips on improving their fish quality and may be subject to fewer sales. A Northwest processor used the CQR to measure samples of inbound “Lots” of fish from 5-7 boats. The processor is selling high-quality frozen fish for $.10 an lb. premium to the market, and some for a more significant premium for the best lots.
Based on five-year projections, this Northwest seafood producer will make $2,835,000.00 using the CQR to improve quality and identify premium quality lots sold for a higher price (Figure 1).
Higher quality sells for more money. One clearly sees this in watches, cars and construction but it becomes less clear in food products because most quality measures are based upon subjective quality scores. Objectively measuring quality with electricity empowers producers to quantify the level of quality they offer and earn more money when selling higher quality products.
Controlling the levels of quality can include not buying poor products, improving handling practices from marginal quality producers and rewarding high quality producers with bonuses. Rewarding good handling practices and improving bad handling practices from fishermen will result in better quality fish going into the freezer resulting in a greater portion being sold for a premium price.
The solution to maximizing value from frozen seafood is transparently showing the customer objective measures of quality/degradation of fish prior to freezing and then educating them on how freezing locks in that quality. Once frozen, degradation stops, or slows dramatically. Customers will pay more for better quality fish.
As the fish are bought, a quality assurance team measures the quality of a representative subsample from each batch. Producers can sell all of their product for a slight premium to the market of about $.10 per lb due to being frozen at sea (FAS). Using the CQR, the team high grades the top 30% of the fish lots and sells them for an additional $.10 per lb premium. The top 5% of lots is marketing and sold as super premium fish, selling for as much as $.25lb to $.50lb more to high end buyers.
Figure 1 shows projections of value add using a CQR to improve fish quality from fisheries and selling a higher quality for a higher amount.
The distribution company started using our program to improve the quality of inbound fish from suppliers which will result in improved customer satisfaction and trust, reduced shrink, revenue increase. They are using our program to objectively assess inbound quality and monitor outbound quality.
The quality increased in 62% of the inbound species in a six month time period (Figure 1). The increase in quality will improve the reputation and sales in a distribution center while reducing shrink and rejections thus making and saving money.
Quality problems result in lower customer satisfaction, distrust, lower sales and increased shrink. A distribution center has had inbound quality problems for years.
Contributing factors included suppliers sending substandard quality seafood, and a lack of training and execution of the operations team. Comparing average quality scores of the same species from different DC”s noted that this DC sent lower quality seafood products to customers compared to similarly situated operations. Current QA/QC processes were lax and ineffective and the buyers were unable to significantly improve quality coming from suppliers.
After switching to a digital objective CQR and AMP system “Reports now run in seconds as opposed to the eight to 10 hours that quality assurance personnel previously spent calculating data”
The solution to improving inbound quality is to continually assess inbound products in real time. Buyers can validate CQR indicated quality concerns with traditional organoleptic exams and relay data back to suppliers. Once suppliers know that their product is being assessed by an objective electronic real-time monitoring system, quality will increase.
Figure 1. Trend increases over time by letting suppliers know you are monitoring inbound products with a CQR.
When it comes to seafood, the question of whether a fish is frozen or fresh matters in more ways than one. Fresh fish is wonderful and healthful, but few consumers realize that carefully handled flash frozen seafood is of equal if not superior quality. Indeed, the perception that “sushi-grade” fish is the freshest quality (and frozen is not) illustrates a paradox that must be overcome. In fact, sushi-grade, as recommended by the FDA, should be previously frozen to kill any parasites. Unfortunately, that term is not regulated and thus can be used with the most questionable seafood products on the market. With the current marketplace flooded with cheap imports of questionable origins, unknown workers and fishing conditions, and environmental impacts, U.S. fishermen need a market differentiator that communicates the values consumers desire the most: quality and freshness.
Frozen seafood, when handled correctly, is of higher quality than most fresh fish and sushi on the market. Fishermen must put more work (and therefore add more value) into flash frozen fish than they do with fresh, and flash freezing locks in the freshness and quality of a fish the day it was caught and processed—whereas many fresh fillets may have been in the grocery seafood display case for eight days or more. Freezing allows small-scale fishermen to participate in and develop markets for underutilized species, thereby increasing resource utilization without increasing fishing intensity. Freezing also allows for buffering against seasonal flooding of core markets. Flash frozen seafood has an opportunity to solve significant issues facing domestic small-scale fishermen such as seasonal swings in volume, distribution cost, and more accurately matched supply and demand, thereby generating much less waste.
Nevertheless, many consumers perceive frozen seafood to be a cheaper, lower-quality product and often expect to pay less. This creates a very real market barrier for small-scale commercial fishermen with lower volume fisheries who need to meet a higher price margin to remain viable.
A final factor is shipping and the associated environmental cost. If fresh product is driven a reasonable distance to market, its relative environmental impact is low. However, most fish consumers live far from where the fish was caught, and the majority of fillets they buy are fresh and shipped by air, which is the world’s most carbon-intensive form of travel. By contrast, when fish is frozen at sea, its taste and quality are practically indistinguishable from fresh and it can also be moved thousands of miles by container ship, rail, or even truck with a much lower carbon footprint.
Trust is built on data. Consumers use data to decide whom to buy seafood from. A community supported fisheries (CSF) Sitka Salmon Shares uses our device to build that trust. This gives the consumer confidence that what they are buying is being monitored and is high quality. Here is a video they have on their website.
A CSF in Alaska sells a total volume of 200,000 pounds of fish annually. Using quality data to support the trust in seafood sales resulted in 10% (or 20,000 pounds) of their total sales or about $400k dollars annually.
Sales will increase with quality data
Do you want to know the quality of your fish, your customers do.
Trust is data driven.
Trust is built on data
Trust builds success
Knowledge is trust
95% of consumers reported that their confidence in the quality of frozen seafood would increase with an objective measure prior to freezing. The solution to selling frozen seafood is 1) showing the customer that you are objectively monitoring the quality of that fish prior to freezing and 2) educating the customer on how freezing locks in that quality. Once frozen, degradation stops. It was revealed that consumers did not prefer fresh over frozen seafood and they would buy more frozen seafood if an objective measure of quality was provided. A study completed with several companies that sell frozen fish, Oregon State University Food Innovation Center and Seafood Analytics showed that consumers did not have a preference of frozen vs. fresh and in some cases, frozen was preferred over fresh. Fresh was never preferred over frozen. Furthermore, the report showed that 95% of consumers reported that their confidence in the quality of frozen seafood would increase with an objective measure prior to freezing.
Figure 1. Title slide from consumer taste test report by Oregon State University Food Innovation Center and Seafood Analytics.
Figure 2. Figure from consumer taste test report by Oregon State University Food Innovation Center and Seafood Analytics. The report showed that frozen black cod was liked statistically more than fresh black cod and no difference between fresh and frozen coho.
Figure 3. Figure from consumer taste test report by Oregon State University Food Innovation Center and Seafood Analytics. The report showed that 95% of consumers reported that their confidence in the quality of frozen seafood would increase with an objective measure prior to freezing.