That the world knows good things about Alaska seafood is thanks in large part to the marketing efforts of the Alaska Seafood Marketing Institute. The organization’s purpose for the past 25 years has been to increase positive awareness of the brand, create collaborative marketing programs and ensure that educational, advocacy efforts and current research land in the hands of the folks best equipped to distribute that information.
But in the face of Alaska’s smaller budget and more challenging fiscal climate, ASMI is anticipating revenue cuts of up to USD 5 million (EUR 4.7 million) for fiscal year 2016, said Tyson Fick, ASMI’s communications director. “We’re funded as is until July 1,” he said. “We’ll find out what our revenues look like for next year in three months’ time but we can afford to ramp down, so we’re not going to fall off a cliff immediately.”
Alexa Tonkovich (pictured), ASMIs executive director, said the budget cuts didn’t come as a shock. “We don’t know exactly what they’ll be and we won’t speculate until the governor’s budget has been released, but we’re already looking for efficiencies within the organization and our programs that we can start working with now,” she said. “We’re excited to get creative and work hard to keep our organization strong.”
ASMI has 20 full-time employees and with 60-to-70 percent of its seafood exported, its international program is slightly larger than its domestic.
ASMI receives three funding sources: a voluntary fish tax on the price of Alaska seafood landings, federal funding through the Market Access Program and “designated general funds” from the Alaska Department of Commerce that must match the federal grant. The “fisheries business tax” and “fishery resource landing tax” are expected to decline from USD 9.47 million (EUR 8.8 million) in 2015 to USD 8.74 million (EUR 8.1 million) in 2016, while funding to the Department of Commerce has been cut by almost one third.
Susan Bell, principal at the McDowell Group, a consulting firm with offices in Anchorage and Juneau, said the state is expected to bring in USD 4.9 billion (EUR 4.6 billion) in revenue in 2016, as compared with the USD 8 billion (EUR 7.5 billion) it brought in two years ago. But ASMIs “disciplined approach” will mitigate the effects of these funding decreases, she added. “I think they’ll continue to have high visibility in the marketplace. It’s a matter of prioritizing their programs and recognizing where they’re most effective in retail, foodservice consumer advertising and international programs.”
Bell attended ASMIs “All Hands On Deck” meeting from 21 to 23 October and said the tone was one of “being responsible, prudent and maximizing their effectiveness. They’re a model marketing program and a model in terms of how a state agency should be responding to this budget situation,” she said. “This is a small, efficient organization that utilizes a lot of contractors, so I don’t think they’ll have to let go of a lot of staff.”
Fick said ASMIs international program is likely to be the most stable in 2016. Its international efforts have been focused on China and Europe, specifically Italy, the United Kingdom and the Seafood Exposition Global trade show in Brussels, Belgium.
ASMI hosted an Alaska Seafood pavilion at the Seafood Exposition Global 2015 trade show in Brussels, Belgium in April 2015. Participation in that show resulted in on-site sales in excess of USD 45 million (EUR 42 million), an increase of 400 percent from the previous year. An increase of 19 percent was projected in post-show sales.
In China ASMI organized promotional activities in Zhongshan, Kunming, Chengdu and Nanjing, where retail promotions, menu promotions, seminars and chef training school programs were held. Those activities resulted in major retailers carrying Alaska seafood, introducing 40 million households to the brand. Fick estimated that 100 metric tons of Alaska seafood – specifically salmon, cod, sole and crab – valued at USD 3.5 million (EUR 3.3 million), penetrated those markets.
In Italy ASMI partnered with an Italian grocer to conduct Alaska cod promotions in 55 Italian supermarkets. Those promotions generated sales of USD 161,000 (EUR 150,091) which represented a 31 percent sales increase from the previous year’s campaign.
In an advertising campaign in Tesco in the United Kingdom, ASMI hoped to promote sales of canned red salmon through Tesco’s label brand. The campaign resulted in sales of over USD 500,000 (EUR 466,124) of canned salmon, almost a 700 percent increase over the previous year. “We can usually estimate what our impact will be but this one was a bit higher than we estimated,” said Alexa Tonkovich, ASMIs executive director. “It’s a great example of the fact that when we put a marketing effort behind a product and work with suppliers and retailers, it can have a really profound impact on sales.”
Tonkovich said ASMI will continue to focus on the same international markets next year but “we’re always looking for allocations between new and emerging markets.” In the last two years ASMI received grant funding through the USDA to do an exploratory mission in Southeast Asia. “We’re always reevaluating the markets and we never want to be stagnant and stay in the same markets forever,” she added.
