Freshwater Fish Marketing Corporation

Delivering on tall orders

Last January, CBJ spoke with John Wood, the President and CEO of Freshwater Fish Marketing Corporation (FFMC) about the organization and how important it is to Canadian fishers in northern Canada. We caught up with Wood a few weeks ago to catch up and get a year in review.

For those that didn’t get a chance to learn about the FFMC, their story goes like this. Founded in 1969, the corporation has been marketing Canadian freshwater fish and bringing them to markets around the world. Although the FFMC is a crown corporation, it doesn’t receive any government funding and relies on annual profit to keep it running. The corporation’s mandates have remained the same since the beginning, and they include purchasing fish that are legally caught, selling them on an orderly market and increasing the Canadian freshwater trade to sustain fishers in Alberta, Saskatchewan, Manitoba, Northern Ontario, and the Northwest Territories.

The reason the FFMC was originally created was to instill order in the disorganized and unprofitable Western Canadian fishery. The federal government intervened when fishers had no guarantees what they would be paid for their catch or who would pay them if an agent went out of business.

The FFMC works like a co-op. Prices are set each year on May 1, and fishers are paid initially for the fish they sell. Those fish are exported around the world—with 70 per cent going to the U.S., 15 per cent to Europe and 15 per cent staying in Canada. At the end of the year, leftover revenues are divided among the fishers, who work mostly as individuals but sometimes operate in small crews.

January 2009 to February 2010: Still the big fish in a little pond

When we called Wood for an update on the business, his sentiments were mixed. “The recession has made the last half of our fiscal year very difficult,” he said. “Our fiscal year ends on April 30, so our fourth quarter last year was right in the middle of the downturn. Although the FFMC did manage to hold on to our pricing, it required a lot of work from our brokers and marketing team to get the sales. We had to do a few special promotions to keep volume moving.”

The silver lining is that even though the FFMC ended up losing a bit of money last year, the fishery made more money last year than it has in several years. “We had strong markets at the beginning of the year, so we were optimistic and set the year’s prices quite high,” Wood recalls. “And then of course markets weakened through the year. We couldn’t change our prices to reflect the recession, because one of the reasons the FFMC is here is to maintain consistent pricing, so fishers can plan their own small businesses. We managed to do that, even though it affected our own results.”

As May approaches this year, we wondered whether the FFMC is as optimistic in its price settings as is the Bank of Canada. “We’re seeing a steady climb out of the recession,” Wood says, confidently. “It appears we have been able to hold onto our price gains over the last two to three years, overall. We don’t expect to see major price gains in the next two years, because markets are still weak. Having said that, the FFMC is still the premium company in the freshwater business. We’re still the ‘big guy’ in our niche markets, because of product quality, consistency of supply, resource quality—we have the cleanest freshwater lakes on the planet—and breadth of product line.”

Wood is referring to eight species of fish (and a few other smaller fish species) that other freshwater fish organizations just don’t offer. Of course, the FFMC is also unique in that three quarters of its fish suppliers are aboriginal. “There’s quite a long heritage of fishing behind our supply,” he smiles.

What lies downstream?

While Wood is confident the recession will subside, there is another lingering issue that is plaguing many Canadian exporters: the weak U.S. dollar. “We hedge our foreign currency receivables, so we have been insulated from the dollar for now,” he says, “but of course we can only hedge out for so long. Over the next year, we will see the impact on our business if it doesn’t improve. The outcome could be dramatic, as we rely on the United States for about two thirds of our sales.”

Like other struggling Canadian exporters, the FFMC is managing to enter new markets. “We have been doing a lot of exports to Russia,” Wood adds. “We have a serious volume of white fish going there. We also have a new caviar product designed for the retail trade, which has been accepted with positivity in Finland—where we send most of our caviar.”

Speaking of new products, the FFMC has new trout products on the market, as well as has a new caviar supplier who has gradually worked out the technology and processes required to use roe from northern pike. “The fact we’re having to put up with the remains of a recession and a weaker U.S. dollar, we have exciting things going on that we feel will go a long way to offset those issues,” Wood maintains.

“We’re always looking for ways to improve efficiency in our operations to counteract losses,” he says. “When you look at what we do, we’re here to improve the living standards of fishing communities. We’re on our 40th year of operating and, over the years, we have returned about $1 billion back into the isolated communities of western and northern Canada. That’s not a small figure. The FFMC was created to provide market access and stable prices to fishers and I think we are actually meeting our objectives.”

CBJ couldn’t agree more.