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Linda Bean expands real estate on Vinalhaven waterfront

Vinalhaven — Three years after launching her brand of lobster products, Linda Bean’s Perfect Maine, in Port Clyde, Linda Bean continues to grow her business, this time with the Nov. 5 purchase of a former Inland Seafood Company wharf on Vinalhaven.

The acquisition expands her supply line, securing more lobster for her processing plants in the Rockland Industrial Park. Bean’s venture buys, processes and sells both lobster and lobster products across the country. In addition, she operates restaurants and cafes serving lobster rolls and other seafood in Maine, as well as Del Ray Beach, Fla. And this fall, she is expanding her product line with two more value-added products — frozen cocktail lobster claws that are scored (easy to remove the meat and dip into butter) and lobster ravioli — that will be sold in 777 grocery stores nationwide.

Demand is up for innovative lobster products now that lobster is more affordable, she said.

Bean, who lives in St. George, said she has renamed the former Inland Seafood wharf the Americanus wharf. She said the name underscores her alliance with Maine lobstering families. And, she added, the Latin name for lobster in the Gulf of Maine is homarus americanus.

With the acquisition, Bean now owns two Vinalhaven wharves, her Harborside Wharf and Americanus. She has been buying lobsters from Vinalhaven lobstermen at the Harborside Wharf for the last three years, and has a large bait cooler and freezer building there.

Inland Seafood purchased the wharf 11 years ago from the estate of Bob Brown and the Vinalhaven Lobster Company.

Bill Demmond, chief operating officer of Inland Seafood, said Nov. 11 from his Atlanta-based headquarters that the sale of the wharf to Bean represented a “win-win situation for both businesses. We are now more strategically aligned with each other. We are both intent on growing our business in Maine.”

Bean and Demmond declined to discuss the purchase price of the wharf.

Demmond is a principal in the privately owned Inland Seafood, which buys approximately seven to nine million pounds of Maine lobster a year from Maine fishermen. His company, founded by Joel Knox, continues to buy in Hancock and Washington counties, in Boothbay, Casco Bay, and south of Portland. Knox said in a Nov. 10 news release about the real estate transfer that his company will continue to buy lobsters from Penobscot Bay waters.

“Vinalhaven is an island of great beauty and I have always considered it wonderful to be an owner of property there,” said Knox. “We’ve been spoiled by the absolutely great lobsters that come from there, and we hope to be buying some on a continuing basis, now from Linda.”

The sale of the Vinalhaven wharf is strategic, Demmond said, for a company more interested in processing than buying. Inland Seafood owns a large processing facility in Portland, he said.

“It is difficult to run a wharf in Vinalhaven,” he said. “Logistically, it is a nightmare.”

But, he said, his business is not cutting back in the state.

The number of Vinalhaven ferry runs limits lobster transport to Inland Seafood’s processing centers, and the smack boats — those flat deck boats used for hauling crates of lobster to Rockland or Stonington for truck transport — add another 10 to 12 cents per pound of traveling costs, Demmond said.

The real estate deal reached with Bean last week is mutually beneficial, said Demmond and Bean. Inland Seafood will continue to buy lobster from Bean, and Bean will now ensure enough supply for her products.

The two have signed a non-compete agreement. In exchange, Bean is making a guaranteed percentage of the Vinalhaven shore lobsters available to Inland Seafood for a set margin over her cost, she said.

“Inland remains committed to Maine and expects to further solidify the relations we have developed with Linda and her mainland operations since her entry into the industry,” said Demmond. “We met first at the 2008 European seafood show in Belgium, with booths right next to each other. We hit it off right away. We talk business.”

Bean said Nov. 11 that current lobster prices run from $3.25 per pound to the pricier $3.75 for select lobsters. She said her company pays lobstermen a 45 cent bonus per pound. Buying more wharf space and securing the flow of lobster is part of her long-term vision to build a business that also helps secure a future for the Maine lobsterman. She puts in a nutshell what happened to the lobster industry over the past decades, beginning with how the lobster population increased as the codfish population was overfished.

“Lobster flourished without a predator,” she said.

Now, the lobster supply is abundant, and along with a Great Recession diminishing demand for fresh lobster, its price has fallen. Bean calls this a demand side crisis and she wants to turn it around by creating new value-added products from lobster, and perhaps shrimp and crab.

Bean described her business as vertically-integrated, taking the lobster from trap to table in order to eliminate the middlemen. She said in her Nov. 10 news release that “she shares her savings with her fishermen by means of bonuses and by making fuel and bait available to them at her cost. Last year, she built a sizable bait provisioning facility on Vinalhaven to address head-on the worries by fishermen about increasing bait scarcity.”

Bean now owns five lobster-buying sites in Knox County: she started with the Port Clyde station in 2007, purchasing approximately 400,000 pounds of lobster that year. (In 2009, by contrast, she purchased approximately four million pounds). In 2008 she bought Jonathan Shafmaster’s Little Bay Lobster at Vinalhaven, and she later purchased Bert Witham’s lobster wharf in Tenants Harbor as well as the busy floating buying station of Peter Jones at Vinalhaven.

Bean has likened her lobster business somewhat to that of Frank Purdue.

“Purdue grabbed America’s attention when he proclaimed, ‘I hate skinny chickens,'” she said at her website. “Well, I dislike lobsters being called Maine lobsters when they aren’t! My brand lobsters carry a bracelet tag which says they are authentic Maine lobster, wild caught by Maine fishermen using sustainable practices. Moreover, they tell you exactly where in Maine they came from: a first achieved by Port Clyde Lobster Company.”

Her business logo includes the image of a rope that represents the group of companies she has formed to “advance what I can of Maine’s native lobster industry,” her company said.

In 2007, Bean envisioned marketing and branding Maine lobsters by regions where they are trapped. Since then, she has been expanding her business, employing at first 10, and eventually expanding payroll to include more than 50. Last year, she said she was purchasing more than three million pounds from Maine island fishermen.

She has also opened three lobster cafes, in Camden, Freeport and Portland, and two stands, in Rockland and Freeport, that feature lobster from her wharves. She also owns the Port Clyde General Store and Dip Net Restaurant, both in Port Clyde.

She said she plans to build a new processing plant in the Rockland Industrial Park at the site of a facility that was destroyed by an electrical fire in early September, and along with it, a tank holding 9,000 pounds of lobster.

Bean has another processing plant in the same industrial park, and has purchased more property in the park for a potential future expansion. Her Port Clyde operations allow her to purchase “the highest quality lobsters direct from fishermen to supply a growing number of grocery store chains and restaurants across America,” her website said.

All of the lobster, shrimp and crab she uses in her Perfect Maine Lobster Roll products is cooked and packaged in Maine “under stringent American FDA requirements for seafood; none is processed in foreign countries,” the site said.

Inland Seafood, established in 1977 and under private ownership, “is the largest full-line processor and distributor of more than 1,000 fresh, frozen, smoked and specialty seafood items in the southeast,” according to the company. It also offers a line of gourmet specialty food, including meat, game and poultry, cheese, olives, and oils, supplying more than 3,500 restaurants and 900 retail outlets.

Inland Seafood operates primarily in the southeast and moved into the Maine lobster and scallop market in the early 1980s. Bean also owns the sporting Camp Wapiti as part of Linda L. Bean Camps LLC in Patten, on Davis Pond.
The transition

“We feel comfortable for our fishermen to carry on with good care on bait and fuel, which are real important aspects to running a buying operation that is smooth and efficient for both the boats and the buying personnel,” said Demmond in the news release.

Bean said her plan is to run each buying dock separately for the remainder of this year. Manager Frank Laurie and his dock and office staff will continue at the Americanus facility, and Manager Peter Jones and his crew at the Harborside facility.

Bean and her chief executive officer, John Petersdorf, have organized a six-person transition team to listen to all ideas from their fishermen, dock crew, managers and accountants, she said. The team consists of two from each facility, plus two from the company’s mainland headquarters in Rockland. The fishermen and staff have been notified at both wharves and invited to participate. So far, this has received a positive reaction at both wharves, said Bean.

“Demmond points to Bean’s substantial rebuilding of her Harborside Wharf structure, plus the new bait building, as proof she and Petersdorf, who has 18 years in the business in Knox County, will take good care of Vinalhaven’s fishermen and dock crews and the wharf infrastructure within which they all work together,” the news release said.

“Marine dock builder Art Tibbetts is on site for us all at Harborside right now, doing a $300,000 renovation to the wharf and the outlying floating buying station we operate near the entrance to Carver’s Harbor,” Bean said. “Ideally none of our boats will have to wait long for any reason, and we propose to have a ready supply of bait for all our fishermen, backed up by increased bulk purchase commitments I am making now for 2011. Bait and bonuses are keys to success in this industry, and we thank all our boats for their lobsters and for their confidence in our operations here in our home territory: Knox County.”