Lobsters? Really, Big Red Car, lobsters?
Big Red Car here. Bit dark and rainy in the ATX today but it is almost Memorial Day when we get our torrential floods.
Today, we talk about lobsters. OK, lobsters are your friend and if you go to Red Lobster, you know what I mean. [Pro tip: Go hungry. Go early. Go big. Eat the cheese biscuits but don’t get too full on them.]
The Maine lobster is being harvested in a great plentitude which means they have to be sold somewhere. This is also a great fisheries refurbishment story but that’s not the core of what we chat about today. The Boss is doing his part having increased his annual lobster consumption. Are you in the game?
If y’all remember your Econ 101, when supply goes UP, prices may go DOWN. Of course, you have to gauge demand. Sometimes, you can stimulate demand by lower prices.
The price of Maine lobster is down and hit a very low low in 2012 when it was priced at $2.69/pound — wholesale, at the dock, in Maine.
Bit of perspective — Maine lobster at Beijing’s Conrad Hotel tips the scale at $42/pound, so there is a bit of markup between the dock in Maine and your dinner table in Beijing.
Which brings us to the guts of our story.
Maine has almost 6,000 lobstermen who operate like Uber drivers — independent businesspersons who get up every morning, put their boots on, take their boats out, pull their pots, capture lobsters (big ones and babies — no no), and sell them at the dock when they return.
Pretty much the same for a century or two, no?
Lobstering is a half billion dollar business.
About forty years ago, some lobstermen on Little Cranberry Island (near to Mount Desert Island, where they sell their lobsters) formed a cooperative to pool their catch and sell it as a single product. This is a typical coop, like Sunkist oranges, as an example. In this manner, the lobstermen took control of their own fate.
In 2010, somebody in Maine got the idea to start selling lobsters to China. The Chinese like lobsters and buy both the spiny lobster (Australia) and the Maine lobster. Nobody in China knows where Maine is.
Here is what happened:
As you can see, the lobster relationship grew from about $100,000 in 2010 to almost $20,000,000 in 2015. Smells like success, no?
This is a great example of how international trade can be a driver for new American markets in something as obscure as Maine lobsters.
The bigger question is — how did this happen, Big Red Car?
OK, Big Red Car, Lobsters, How Did It Happen?
The answer is a Maine trade delegation made a trip to Hong Kong in 2010 and the state of Maine established a permanent trade development foothold in Shanghai. Last year, another Maine trade trip went to China.
This is called — HUSTLE. Plain, old-fashioned, capitalist, American hustle. Maine style. Maine lobster hustle. Lobsters.
This is what Americans are good at — hustling. The American Dream is based on getting up early, staying late, working your ass off, being ready to bite the ass off a grizzly bear. Hustle.
[Note: Guys who get up before dawn and then go to sea to work their asses off are going to be filled to overflowing with hustle.]
The Big Red Car is very skeptical of the President’s big Pacific trade deal but that is not what we are talking about here. What we are talking about here is entrepreneurial hustle.
Here is a great article which goes into way more depth. It is written by Ylan Q. Mui, a financial reporter for The Washington Post. Normally, she covers the Federal Reserve and the economy; but in this article, she is talking lobsters.