Food & Beverage

Maine's lobster business is booming despite record catches

Key Points
  • Maine lobstermen are hauling in record catches but prices remain near all-time highs because demand is surging.
  • The lobster industry took steps years ago to boost demand by creating new markets.
  • China now accounts for 13 percent of all lobster exports. Up sharply in just a few years.
Lobster overload sends industry scouting for global consumers
Lobster overload sends industry scouting for global consumers

The lobster business is booming in Maine.

Lobstermen are hauling in record catches, while prices are near all-time highs. That's because the industry is also seeing record demand.

U.S. lobstermen have seen their yearly haul quintuple over the last 30 years. They brought in 131 million pounds of the crustacean in 2016, more than 80 percent of that was caught in Maine.

"Compared to 20 years ago, I'm getting twice as much," said Jack Thomas, who has been lobstering for almost 50 years. He works traps off the coast of Freeport, Maine. "Last year, the last couple of years have been record years for me."

But increased catches haven't always been good news. In 2012, an historic lobster harvest sent prices plummeting, when demand didn't keep up.

Lobsterman Jack Thomas catching lobster on his boat off the coast of Freeport, Maine.
Jodi Gralnick | CNBC

"Everybody points to this year as a year that was a big learning experience for all of us in the industry and it certainly was," said Annie Tselikis, marketing manager at Maine Coast, a distributor in Portland, Maine. "What that did was give us a wake-up call to invest in infrastructure, to really invest in marketing, our business relationships. And in that one year, we changed the entire game."

The industry made a huge push to increase demand, both domestically and around the globe. And they've had great success, especially in China, where distributors are marketing Maine lobster as a clean source of quality protein. It also helps that the Chinese word for lobster is similar to the word for dragon, it resembles the mythical creature and when cooked, it turns the lucky color red.

China accounted for just third-of-a-percent of all U.S. lobster exports in 2010. By 2016, that jumped to 13 percent, according to WISERTrade.

And Chinese consumers are willing to pay up for the tasty treat, shelling out as much as $100 for a 1.5-pound lobster for a Chinese celebration.

"China saved our bacon," said Portland lobsterman Dickie Black. "The price was at an all-time low, and we aggressively opened a market over there and it became very popular with the middle class."

Distributors are also getting orders from Malaysia, Indonesia, the Middle East, North Africa and South America.

And it's not just about finding new international customers. The industry is also looking for new markets in the United States. Lobstermen fly to events around the country to meet chefs face to face, talking about sustainability and teaching them how to use the product in innovative dishes.

But why are there so many more lobsters in the waters off Maine, fueling this need to create demand? Scientists say it's climate change.

"The waters in the southern New England area have sort of warmed to the point that lobsters are less able to produce young and survive," said Jon Hare, of the Northeast Fisheries Science Center. "But the warming waters have created a very beneficial situation in the Gulf of Maine, so they're right at the optimum temperature for lobsters now in the Gulf of Maine."

The lobster industry also says a more than century-long commitment to sustainability has kept lobsters plentiful. Even before the law required it, lobsterman began restricting their catches, throwing back undersized or oversized lobsters and egg-bearing females.

An employee weighs the day's catch at Maine Coast distributor in York, Maine.
Jodi Gralnick | CNBC

And there are no lobster conglomerates. Maine law allows only one fishing license and boat per person, and the owner of the vessel must be on the vessel. It also limits the number of traps each licensee can have. So there's no overfishing.

"That's inefficient, certainly, but it's also enormously profitable in terms of sustainability," said Matt Jacobson, executive director of the Maine Lobster Collaborative. "So we don't have corporate fishing, we don't vacuum the bottom."

"The whole industry started by, you know, fathers, sons, daughters getting into the business and teaching, 'Here. This is how you do it. This is the proper way, take care of it, so you can have it for tomorrow,'" said Jack Thomas.

But that also presents a challenge. It's difficult for outsiders to get into the business. They need to go through apprenticeships, get sponsorship from a captain and then join a long wait list for a license.

Lobsters caught off the coast of Maine.
Jodi Gralnick | CNBC

So, the labor force is aging, averaging about 50 years old. The industry is working to encourage young people to become lobstermen, making it easier to get a license before the age of 23.

"These are hard jobs. They pay pretty well, but they're hard jobs and so that, we're competing with the rest of the economy for inside jobs, right?" said Jacobson.

The money helps. Some license owners make six figures.

So now, the challenge is quite different than it was during that 2012 price crash — keeping up the supply to meet the growing demand.

WATCH: Booming demand in China boosts lobster business

Booming demand in China boosts US lobster business
Booming demand in China boosts US lobster business