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Case Study on Seafood Processors

Summary

One sees higher quality sells for more money in watches, cars, and construction, but it becomes less clear in food products. Lack of transparency is because most quality measures rely on subjective quality scores. Objectively measuring quality with electricity empowers producers to quantify the quality they offer, thereby increasing profits and quality products.

 

Controlling quality levels can include not buying low-quality products, improving handling practices from marginal quality producers, and rewarding high-quality producers with bonuses. Conversely, rewarding acceptable handling practices and improving bad handling practices from fishers will result in more excellent quality fish going into the freezer resulting in a more significant selling premium price. 

 

The solution to maximizing value from frozen seafood is transparently showing the objective customer measures of quality/degradation of fish before freezing and then educating on freezing locks in that quality. Once frozen, degradation stops or slows dramatically, and customers will pay more for better quality fish.

 

As the fish sells, a quality assurance team measures a representative sub-samples quality from each batch. Using frozen at sea (FAS), producers sell products at a premium of approximately $.10 per pound. 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 were marketing and sold as super-premium fish, selling for as much as $.25lb to $.50lb more to high-end buyers. 

 

Future Value Creation

In the first year, thresholds for quality measures from individual fisheries will develop. By year two, fishers above the threshold will receive a price bonus, and those below it will not receive compensation. Lower-quality fish suppliers will be given tips on improving their fish quality and may be subject to fewer sales. For example, a Northwest processor used the CQR to measure inbound “Lots” samples of fish from 5-7 boats. As a result, the processor sells high-quality frozen fish for $.10 an lb. premium to the market and some for increasingly significant compensation for the best lots.

 

Find out how to increase your premiums for high-quality foods at www.certifiedqualityfoods.com.

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