State officials are preparing to distribute federal block grant funding for Michigan seafood processors that significantly shifted from a wholesale to a retail focus during the COVID-19 pandemic.
Pandemic-related lockdowns in 2021 made transportation difficult and caused serious supply chain interruptions. As a result, processors pivoted away from the depleted wholesale market and into retail to serve individual customers.
Lauren Jescovitch, extension educator for fisheries and aquaculture for Michigan Sea Grant, says the pandemic overall had an uneven effect on seafood processors as some needed federal relief funding to “stay afloat” compared to other “places having their best years ever.”
Specifically, though, most Michigan seafood processors were primarily selling to wholesalers before the pandemic.
“It was a lot more wholesale versus retailer,” Jescovitch said. “I would say it was about 80-20. Now, I think it’s about 20-80.”
Jescovitch describes seeing processors redo their storefront markets to adapt to larger retail volumes, with some installing drive-thru windows to serve customers while complying with pandemic precautions.
The most common processed seafood items in Michigan include filets, and value-added products such as smoked fish and fish dips. The state defines seafood processors as any entity “responsible for any activity that changes the physical condition of a fisheries resource suitable for human consumption, retail sale, industrial use, or long-term storage, including cooking, canning, smoking, salting, drying, shucking, fileting, freezing, or rendering into meal or oil.”
At the end of 2020, the state had issued 288 seafood processing licenses to 248 companies in Michigan, according to the state Department of Agriculture and Rural Development (MDARD). As of June of 2022, 281 seafood processing licenses were issued to 233 firms in the state.
The number of processor licenses is disproportionate to the number of producer licenses (51). Producers are fishers who catch or harvest large volumes of wild-caught fish for commercial profit. A Michigan Sea Grant report states that the gap in licensing numbers indicates the large volume of fish being imported and handled in the state before making it to our plates. According to another Michigan Sea Grant report, 90 percent of Michigan seafood was imported in 2017.
Meanwhile, the pandemic led more Michigan seafood processors to source products more locally.
Grand Rapids-based Fishmongers of Michigan LLC opened in 2016, importing most products from South America and Asia and selling to restaurants and wholesalers. When COVID-19 caused significant disruptions in supply chains, the company shifted to focus on local and regional sourcing from Michigan and Canada.
Fishmongers of Michigan co-owner Louis Hamper said throughout the pandemic, the company struggled with staffing and — with their primary market shut down — moving product was difficult. While increasing a focus on local and regional sourcing, the company also leaned into the independent grocery store market.
“It was a good thing for us to focus more attention on those networks,” Hamper said. “That is pretty much how we weathered the storm. We pivoted really quickly, and we were really fortunate.”
Jescovitch said Michigan’s seafood processing industry is now “just a different world” than before the pandemic, and she hopes to continue seeing more local sourcing led by consumer demand.
“I think Michiganders should pay more attention to where their seafood comes from,” Jescovitch said. “If you go for a whitefish dinner, is that actually coming from Michigan fishers or Canada? I think those are questions consumers can start asking to help the industry.
Reflecting these market shifts, the state last month announced the opening of applications for the Seafood Processors Pandemic Response and Safety Block Grant program.
The MDARD grants — funded by the U.S. Department of Agriculture — will cover costs for workplace safety measures, retrofitting facilities, transportation, worker housing, medical, and market pivots, such as those made by Fishmonger of Michigan. The grants cover costs incurred from Jan. 27, 2020, to Dec. 31, 2021.
“Michigan’s seafood processing industry is robust, and like so many sectors across food and agriculture, our seafood processors demonstrated their resilience and innovation during the pandemic,” MDARD Director Gary McDowell said in a recent announcement of the grants. “This grant offers an opportunity to provide needed relief for unexpected business costs incurred during the pandemic. Seafood processing remains an important part of Michigan agriculture and our state’s economy.”
Jescovitch says the funds will especially help processors that took extra precautions and delayed reopening even after lockdowns were lifted.
“Those are the places that are having a harder time coming back,” Jescovitch said. “Those who remained open with extra precautions took a risk and ended up coming out ahead.”
Meanwhile, labor shortages continue to be one of the primary challenges confronting commercial fishers and processors.
While Fishmongers of Michigan actually grew during the pandemic, the company’s largest challenge is staffing.
“After we went through that initial shift, we continued to grow,” Hamper said. “We are in a growth phase right now, and it is really hard to get people to work.”
News coverage in the food/agribusiness section of MiBiz is made possible by advertising support from Dan Vos Construction Company. Dan Vos Construction strives to serve people and to enhance life, while maintaining long-term relationships with customers, sub-contractors and employees. This advertisement has no effect on editorial consideration in MiBiz.