Crab Kickstarter ended today

kickstarter endOur 30 day Kickstarter campaign ended today. The goal was to reach 60 retail customers in advance by taking crab orders at lower than retail price. The thought was that this would give a critical mass to justify the start-up costs of setting up a shipping system. We know shipping is expensive so that is a detriment to these sales.

The campaign ended with just 5 pledges. I obviously have more to learn about these campaigns. Meanwhile, however, we put a massive wholesale sales system in place and are working on an alternate retail distribution method using a food truck.

The next retail project we try is likely to be an online auction system to price and allocate crabs during periods of peak demand like holiday weekends.

Seafood trends

blue claw crabThe most recent fisheries report from the National Oceanic and Atmospheric Association (NOAA) gives some interesting insights into seafood trends using the most recent data from 2015 and 2016.

Prices are up slightly. Overall U.S. landings volume of seafood decreased 1.5% from 2015 to 2016 while the value of seafood landed increased 2.1%.

Non-food use –  22% of U.S. landings are used for non-seafood purposes (pet food, fish meal. We presume a significant portion of this is our nearby neighbor Omega Protein that dominates menhaden harvest.

We are growing more valuable seafood – U.S. aquaculture production is only 6% of U.S. seafood volume production, but accounts for 21% of U.S. seafood value production.

Consumption – Per capita seafood consumption in the U.S. is 14.9 lbs., a decrease of 0.6 lbs from 2015. Even though per capita consumption is less than other countries, the U.S. is the 2nd largest consumer of seafood globally, behind China due to our size and affluence.

World production – Most, 85 to 95% of the seafood we eat in the U.S. is imported. However this statistic may be distorted. A significant amount of this seafood is caught in U.S. waters, exported to other countries for processing and then reimported.

Blue claw crab – Hard blue crab landings decreased both in volume and price compared to 2015.  The Middle Atlantic region increased almost 8% in 2016 compared to the prior year but the price decreased 8% over the prior year. (This is why the industry is suffering and why we got involved to te to help).  Total U.S. landings of blue claw crab were 157.5 million pounds valued at $213.8 million—a decrease of almost 1.2 million pounds (1 percent) and $21 million (nearly 9 percent) compared with 2015. Louisiana landed more than 24 percent of the total U.S. landings followed by: Maryland, 22 percent; Virginia, more than 17 percent; and North Carolina, 16 percent. Hard blue crab landings in the South Atlantic, with almost 34.7 million pounds, decreased 15 percent; and the Gulf region, with almost 49.5 million pounds, decreased almost 1 percent. The Middle Atlantic region, with over 73.3 million pounds valued at nearly $114.8 million, had an increase of almost 5.4 million pounds (nearly 8 percent) compared with 2015. The average dockside price per pound of hard blue crabs was $1.36 in 2016 compared with $1.48 in 2015.

Oysters –  Oysters have the highest volume for marine shellfish aquaculture production  (35.2 million pounds, up 5.7%).  Overall, oysters are our 9th most valuable type of seafood at $217 million.  The landing increased 21% in 2016 over the prior year presumably mostly due to the ongoing improvement of the oyster aquaculture industry. Yet relatively little of the industry’s production comes from the Delaware Bay region; we are not mentioned in the report.

New Jersey – Our state ranks second in landings of mackerel, scallops and clams and first in quahog. The state’s seafood processors and dealers employ about 1,600 people, not counting growers and harvesters.

End of crab season

Crab season officially ends tomorrow but I closed down the sales web site because we don’t expect any orders today. The crabs are still out there but only a few crab boats are in the water. They will leave the dock within the next few days.

The marina remains open until the end of the month for striper fishing.

The crab business will open again next spring on March 15. We look forward to welcoming a new marina manager, several new harvesters, and new restaurant and wholesale buyers. We have physical expansions planned over the winter with a mobile  cooler unit and walk-in freezer.

We will continue to enjoy our own frozen soft and hard shell crabs but we don’t have permits to sell them commercially in this form yet. Next season frozen crabs will be available commercially through another company.

 

Soft shell crabs

 

Soft shell crabs are produced from May to October under a New Jersey aquatic farming license held by Tony Novak.

We usually produce these crabs to specific customer orders. We currently supply two local seafood restaurants and make direct sales to consumers at the marina. Soft shell crabs are priced higher than hard shell crabs, typically about $3.00 each dockside. Our current production capacity is 8,000 crabs but we are ready to expand as demand increases.

How can I invest in Delaware Bay fisheries?

There are several ways to invest in aquaculture and fisheries. We used private investors in the past including a locally crowdfunded financing of a watermen under a split-catch arrangement. We are now exploring a wider range of options including recruiting additional private investment.

Potentially one of the easiest ways would be through a crowdfunded securities offering. The Securities and Exchange Commission sets limits on how and how much an investor can invest in crowdfunded offerings. Nantuxent Seafood is not involved in a crowdfunded securities offering but may consider this option in the future.

This blog post is written as part of the ongoing exploration of new sources of funding for growth. This is not an investment offering. The method of financial expansion eventually selected must consider the needs of our customers relative to their financial interest in our seafood. We must also consider the overall reinvestment plan for the marina and the working waterfront community.

The following table provides a few examples of investment limits set by SEC. You will notice that the limits are low for most working class people:

Annual Income

Net Worth

Calculation

12-month Limit

$30,000

$105,000

greater of $2,200 or 5% of $30,000 ($1,500)

$2,200

$150,000

$80,000

greater of $2,200 or 5% of $80,000 ($4,000)

$4,000

$150,000

$107,000

10% of $107,000 ($10,700)

$10,700

$200,000

$900,000

10% of $200,000 ($20,000)

$20,000

$1.2 million

$2 million

10% of $1.2 million ($120,000), subject to cap

$107,000

For more information, see the SEC website.

Everybody loves crabs!

Blue claw crabs (Callinectes sapidus) provide the largest source of revenue for Nantuxent Seafood. The Latin name means “savory beautiful swimmer”. They are caught year round in the Delaware Bay but the traditional commercial harvest that incorporates the soft shell crab shedding season runs from March to October.

We plan to continue to expand to larger volumes of crab sales each successive season. We sell six different crab products (three food products and three bait products) and have several more in development stage. Our goals are: 1) to provide a stable market for the crabs of local harvesters, 2) raise the income of crab harvesters, 3) provide seasonal employment for local workers, 4) provide a safer and higher quality food products to consumers. 5) provide bait to local recreational fishermen, 6) provide restaurants with a reliable source of local crabs.