The American lobster supply chain is complex. It actually is more of a web than a chain. This is a simplified illustration and explanation of what is actually a much more complicated supply chain.
The supply chain starts with the lobster fishermen. Lobsters are caught by thousands of independent lobstermen who have a choice of whom they will sell to. They can sell directly to consumers, but most of them would rather spend their time fishing, not marketing. The majority sell to live lobster dealers that are located on the waterfront, where they can quickly unload their catch and fill up on bait and fuel on their way home from fishing. Live lobster dealers can be buying stations or wharfs, coops, or wholesalers. They pay the lobstermen by the pound, a price set by the market. This price fluctuates constantly, however to give you an idea, the average boat price in 2014 was $3.83/lb. Buying stations and coops will then typically sell to wholesalers but can also sell further down the supply chain if they choose.
Once at the wholesaler, the lobsters are graded based on shell quality and and size before being redistributed. Shell quality is based on how hard the shell is and there are specially trained workers whose job it is to grade the lobsters. Once graded, lobsters are sold either to a live market or to processors.
Lobsters sold through the live market are distributed locally, nationally, and internationally to other wholesalers, restaurants, and retail markets. All grades can be distributed locally, but only higher grades can survive the journey overseas. The further the journey the harder the shell needs to be.
The softest shelled lobsters become processing lobster. They are sent first to the primary processor where they are cooked or frozen raw in a variety of forms. They are then sent to value added processors or distributed as is, to restaurants and retail markets domestically and internationally.
At the value added processors lobster meat is turned into other products like lobster ravioli, bisque, and mac and cheese before being distributed to retail markets and restaurants.
Once the lobsters reach restaurants and retail markets, they are bought by consumers to enjoy!
Stay tuned for our next articles which will include interviews from some key members in the supply chain!