What helps improve financial performance for community supported fisheries?
2017-05-24
2017-05-24
Godwin, S.C.*, Francis, F.T.*, Howard, B.R., Malpica-Cruz, L., Witter, A. In press. Towards the economic viability of local seafood programs: Key features for the financial performance of community supported fisheries. Marine Policy. 81:375-380. [PDF]
* Joint first authors
* Joint first authors
Community supported fisheries increase access to locally caught seafood, like these coho salmon.
The fishing industry is fraught with issues. Many modern industrial fishing techniques are ecologically unsustainable, resulting in severe overfishing, waste production, and bycatch. These techniques are also often economically unsustainable, with industrial fishing fleets frequently relying on monetary subsidies to remain operational. In addition, the fishing industry makes it difficult for seafood consumers to make informed purchases due to barriers like seafood mislabelling, long supply chains with little transparency, and conflicting definitions of terms like ‘sustainable seafood’.
Community supported fisheries (CSFs) are emerging types of local seafood programs that aim to reduce some of these issues by connecting small-scale commercial fishers directly with consumers. In general, CSFs aim to 1) provide fair compensation for small-scale fishers, 2) increase consumer access to locally caught seafood, and 3) create shortened, transparent supply chains by minimizing transactions with ‘middlemen’. Previous research has shown that CSFs provide important economic, social, and environmental benefits to local communities.
The first CSF opened in 2007, and since then CSF programs have quickly taken off, with around 40 programs currently operating in North America. Unfortunately, many CSFs struggle financially, with several ceasing operations shortly after opening. Although the goals of many CSFs are primarily non-financial, a minimum level of financial performance is necessary for these programs to continue operating and to achieve their non-financial goals.
So why do some CSFs struggle financially? Are there any key factors that can help improve a CSF’s financial performance? This is what we - a team of Canadian graduate students led by Fiona Francis and myself - sought to find out.
Community supported fisheries (CSFs) are emerging types of local seafood programs that aim to reduce some of these issues by connecting small-scale commercial fishers directly with consumers. In general, CSFs aim to 1) provide fair compensation for small-scale fishers, 2) increase consumer access to locally caught seafood, and 3) create shortened, transparent supply chains by minimizing transactions with ‘middlemen’. Previous research has shown that CSFs provide important economic, social, and environmental benefits to local communities.
The first CSF opened in 2007, and since then CSF programs have quickly taken off, with around 40 programs currently operating in North America. Unfortunately, many CSFs struggle financially, with several ceasing operations shortly after opening. Although the goals of many CSFs are primarily non-financial, a minimum level of financial performance is necessary for these programs to continue operating and to achieve their non-financial goals.
So why do some CSFs struggle financially? Are there any key factors that can help improve a CSF’s financial performance? This is what we - a team of Canadian graduate students led by Fiona Francis and myself - sought to find out.
The number of CSFs has increased dramatically, but some don't survive due to financial issues.
We surveyed North American CSFs and asked them to provide a range of details about their program infrastructure and finances including their profit margins from the previous year. We had 24 CSFs generously respond to our surveys, and, like others before us, we found that CSF programs are unique and diverse, from their marketing and online services to their infrastructure and products. Despite this diversity some general patterns emerged, and we found three features that were particularly correlated with CSF financial performance. These features were 1) a social media presence, 2) a retail sales option, and 3) a fisher founder. CSFs that had all three of these features were the only programs that had profit margins significantly higher than zero.
So why might these three features help improve financial performance? Let’s first consider having a social media presence - i.e., having at least one social media account. Of the three features, the benefits of using social media are perhaps the most straightforward, as social media platforms are effective marketing tools. By engaging with customers through different platforms, CSFs can market themselves to a wider audience and can also help promote community involvement and education.
The second important feature was a retail sales option. This was an interesting finding, because it goes against the traditional CSF model of an advance payment system (i.e., a “share” system) that allows fishers to get paid upfront before the season, an important value for many CSFs. While not necessarily beneficial to fishers, customers may be more familiar with retail sales options and this payment method may encourage risk-averse or financially-limited people to initially participate in CSFs, and hopefully transition to an advance payment system in the future.
So why might these three features help improve financial performance? Let’s first consider having a social media presence - i.e., having at least one social media account. Of the three features, the benefits of using social media are perhaps the most straightforward, as social media platforms are effective marketing tools. By engaging with customers through different platforms, CSFs can market themselves to a wider audience and can also help promote community involvement and education.
The second important feature was a retail sales option. This was an interesting finding, because it goes against the traditional CSF model of an advance payment system (i.e., a “share” system) that allows fishers to get paid upfront before the season, an important value for many CSFs. While not necessarily beneficial to fishers, customers may be more familiar with retail sales options and this payment method may encourage risk-averse or financially-limited people to initially participate in CSFs, and hopefully transition to an advance payment system in the future.
Community supported fisheries often value community building and educational outreach.
The third and final feature that may be important for CSF financial performance was having a fisher as a founding member. CSFs founded (or run) by at least one fisher may gain considerable advantages, such as easier integration into the local fishing community and increased knowledge of local seafood availability. It’s also possible that CSF customers may have more confidence in programs founded on local expertise.
Community supported fisheries provide substantial benefits to their local communities, so it’s incredibly important that these local seafood programs endure. Our results suggest that engaging in social media, offering a retail option, and having a fisher as a founding (or leading) member are important for CSF financial performance. While they may be potentially beneficial, these results are not meant to be prescriptive. Just like the communities in which they operate, CSFs are incredibly varied, and community-specific factors that are important for one CSF may not work for another (e.g., specific product and infrastructure choices). However, the three features highlighted in our findings suggest that a diverse skillset in the core group of a CSF may be important for financial success, and programs may benefit from integrating leaders with experience in communications, business, and fishing.
Community supported fisheries provide substantial benefits to their local communities, so it’s incredibly important that these local seafood programs endure. Our results suggest that engaging in social media, offering a retail option, and having a fisher as a founding (or leading) member are important for CSF financial performance. While they may be potentially beneficial, these results are not meant to be prescriptive. Just like the communities in which they operate, CSFs are incredibly varied, and community-specific factors that are important for one CSF may not work for another (e.g., specific product and infrastructure choices). However, the three features highlighted in our findings suggest that a diverse skillset in the core group of a CSF may be important for financial success, and programs may benefit from integrating leaders with experience in communications, business, and fishing.