Geoducks: Garbage Into Gold
Joseph Bagley speaks with the hesitancy of a man who has been disappointed before. A fisherman most of his life, the Suquamish Indian has watched the salmon harvest--and his bank account--swing from feast to famine, year after year.
But standing on the deck of the Silver Mist on a chilly Northwest morning, he finds it hard not to feel hopeful.
“It’s the best job I’ve ever had,” the slender Bagley says as he peels off his dripping wetsuit.
The reason for his optimism can be found 60 feet below his aging fish-packing boat, in the form of what is surely one of Earth’s ugliest creatures.
The geoduck, a giant burrowing clam, has emerged as an unlikely prospective savior for a handful of Northwest tribes and has set off a marketing frenzy in Hong Kong and southern China.
The tale of the geoduck provides a powerful illustration of how a global market can turn garbage into gold--particularly when that market includes China, home of 1.2 billion potential clam lovers.
And now that the taste for geoduck has caught on in China, many believe it will quickly spread to other parts of Asia, particularly countries such as Singapore, Malaysia, Indonesia and the Philippines that have large ethnic Chinese populations.
The geoduck (pronounced gooey-duck and derived from a Northwest Indian word) lives only along the coast between Alaska and Northern California. It can weigh as much as 16 pounds and stretch to 3 feet with its neck extended.
This creature has traditionally existed at the bottom of the shellfish hierarchy, a target of ridicule and off-color humor because of its gross slug-like appearance and size.
First harvested commercially in the 1970s, the geoduck--which has a bland taste and a chewy texture--was mostly used in chowder. But over the past two decades, the price paid to harvesters soared from 10 cents to as high as $11 a pound--right up with lobster. The state of Washington, which auctions off leases to harvest the giant mollusk, saw its annual geoduck revenues jump tenfold to $6 million between 1986 and 1996.
The price surged in the late 1980s after the clam was discovered by newly rich Chinese who were drawn by its taste and its exoticism.
Geoduck prices fluctuate by the day, sometimes by the hour, and are influenced by color, size and where the creatures are harvested. The highest-grade “ducks” are paler in color and have small bodies and long necks, which protrude from their shells like slimy undersized elephant trunks.
In the world of Chinese gourmet machismo, the bigger the clam, the bigger the man. Wealthy diners in Hong Kong and Shanghai pay as much as $100 for one of the giants, which are kept alive in restaurant tanks to allow for personal selection. With great flourish, the squirming victim is plucked out of the water and sent to the kitchen to be cooked in a hot pot or sauteed.
“This is not food. This is ostentation,” said Steve Heizer, a shellfish management biologist with Canada’s Department of Fisheries and Oceans.
Unstable Demand
The market is fickle. Sales pick up in the winter when steaming hot soups are in vogue. But on the Chinese mainland, that appetite can disappear whenever events such as the recent death of “paramount leader” Deng Xiaoping, or any of the Communists’ periodic austerity programs, discourage displays of extravagance.
Japanese sushi lovers, who dominated the geoduck market until their nation’s economic bubble burst in the early 1990s, have largely dropped out of the frenzied bidding for the exotic treat, which retails for more than $20 a pound in Asia.
The irony of this scenario--the prosperous Japanese outbid by their newly rich Chinese neighbors--has not gone unnoticed. “You can’t even find geoduck anymore in Japanese sushi bars,” grumbled one Tokyo businessman.
The biggest beneficiaries of the geoduck’s Cinderella transformation eventually could be Washington’s Native American tribes, which in late 1994 won a bitter court battle allotting them half of the state’s lucrative shellfish reserves based on treaties dating back to 1855. In 1996, that represented one-fifth of a total U.S. and Canadian harvest of 7.5 million pounds of geoduck. The state has appealed the ruling.
A few enterprising tribal leaders see the geoduck as their long overdue ticket to economic independence and an avenue for breaking into global trade. Tribal members such as Bagley hope it will mark an end to their boom-and-bust existence.
Already, for the Suquamish tribe, the geoduck fishery brings in more money than salmon or the newly built Casino Suquamish, which sits just off the highway leading to the tribal headquarters and museum near Puget Sound.
Clams As Cash Cows
In a little over a year, the geoduck has become the tribe’s cash cow, contributing $400,000 to a fund that subsidized the tribe’s day-care center and helped buy a new bus for the senior citizens program and provide college scholarships for young Suquamish.
While it hasn’t made any millionaires, the geoduck also generated $511,000 for divvying up among the 20 tribal members working as divers, boat tenders and managers of the program.
But Washington’s tribes are also quickly discovering that this modern-day gold rush is fraught with its own perils, both fiscal and physical, that can be anywhere from the bottom of the ocean to the seafood markets in Hong Kong and China.
“There’s big potential there, but it’s been difficult to convince people that it is worth the effort,” said Paul Williams, a biologist for the Suquamish tribe. “They’ve heard the horror stories.”
The geoduck has been harvested for centuries by Indians but had little commercial value until the mid-1970s, when Japanese sushi chefs began buying frozen geoduck necks.
It wasn’t long, however, before the Japanese were priced out of the competition when a Hong Kong emigre living in Vancouver, British Columbia, began shipping live geoducks to a friend back home.
The giants were sold as novelty items at several restaurants in Hong Kong, and within a few years geoduck sales took off.
Meanwhile, Native Americans in the Northwest were trying to seize control of their economic destiny.
In 1985, Fred Lane, co-founder of the Seattle-based American Indian Trade and Development Council, returned from a trade mission to Japan and China convinced that the tribes needed to cut out middlemen and sell their natural resources, from timber to geoducks, directly to Asia.
But several missions later, Lane’s only successes have been a tribal venture importing Chinese-made cigarettes and a few sales of Indian handicrafts to Japan.
Without basic business skills, it is tough for entrepreneurs to get bank financing. Venturing into the foreign arena is particularly difficult, given the hurdles of language and market development and the cost of doing business overseas.
Lane is trying to form a marketing consortium that would link several tribes and locate buyers and negotiate prices for seafood such as salmon and geoduck.
“If each tribe tries to run over to Asia and set up a market, they’ll go broke,” he said.
Canadian Competition
The Indians face formidable competition. Two Vancouver firms, SeaWorld Fisheries Ltd. and Evergreen International Foodstuffs, dominate the market for live geoduck in Asia. Only a small portion of the harvest, mostly the lower-quality clams, is still being sold to Japanese sushi chefs or to restaurants in the Chinese community in North America.
The Canadian firms own or control most of their nation’s 55 geoduck harvesting licenses, which are now valued at more than $1 million apiece, according to industry officials.
Those firms are also major players in Washington, where the state auctions off harvesting rights. Recently, Evergreen was the top bidder on nine out of the 12 leases offered.
By controlling such a large share of the world’s harvest, the Canadians can manipulate the amount of giant clams entering the market--and thus the price, according to people in the seafood industry.
But officials of both companies deny they wield such power, arguing that the volatility in price is determined by buyers in Hong Kong and China.
While others view him with envy, Tony Wong, whose father started SeaWorld Fisheries in the late 1970s, describes the business as “high value” and “low margin.” He pointed to the costs of getting the product to market, including acquiring the harvesting rights, setting up the dive boats, shipping the perishable cargo and locating the right buyer.
“When it cost $1 a pound at the dock, I could sell it for $2 a pound,” he said. “Now, at $10 a pound, I can only make 50 cents or a dollar more a pound.”
While few want to discuss how geoducks get from the docks in Hong Kong to restaurants in China, it is common knowledge in the industry that many of the live clams are smuggled across the border to evade high Chinese taxes.
Last fall, Beijing cracked down on smuggling operations, and wholesale prices plunged 25% in one day as crates of geoducks stacked up in Hong Kong.
Getting paid by the Chinese buyers is also a chancy proposition.
“They might pay you cash the first two times, but the third time they ask you for credit,” said Tony Chung of King Asia Marine Products Co. in Hong Kong. “If you don’t give them credit, they may turn to somebody else.”
Global Ambitions
But the biggest threat to the Canadians lies south of the border, where the Native American tribes--now that they control half of Washington’s annual quota--are developing global ambitions of their own.
As the Silver Mist rocks gently in the sound, a powerful speedboat races up and Henry Narte jumps out, his ponytail whipping through the air. He begs Bagley and his companions for a few samples to show a “wealthy customer” who is flying over from Nagoya, Japan.
Narte used to work as a crabber in Alaska, where he made $85,000 during a good year. But he is convinced the big bucks are in geoducks, and he is angling to make himself the middleman of choice for the Indian fishermen and wealthy Asian buyers.
“I’ve got the gift of gab,” he confides before racing off to shore with the clams.
The crew of the Silver Mist watches Narte’s departure with bemusement, having heard the get-rich talk before.
Most of the nine Northwest tribes with significant geoduck resources are licensing divers, splitting the annual harvesting quota among them.
In the past two years, the number of licensed Indian divers in the Northwest has quadrupled to 230, according to tribal officials.
The Suquamish chose a different route, establishing a tribal enterprise that has hired 16 divers and pays them a percentage based on what they harvest. This ensured that the tribe would share in the wealth rather than make a few individual divers rich, according to tribal officials.
Not that they wouldn’t deserve it. Diving in Puget Sound is particularly risky given the unpredictable weather, hazardous tides and near-freezing water.
“I know you can die down there in a second, but I just enjoy being down beneath the water,” says Bagley, who had to pass a rigorous training program to get his tribal license.
Working on the Silver Mist is a family affair. The crew includes Bagley and his brother John, who is the ship’s tender. Their cousin, Phil Holt, and John’s two sons, Jeremy and Joshua, are divers.
They all grew up on fishing boats on Puget Sound, but they have discovered a new world beneath the ocean.
Underwater Harvest
Walking along the sandy bottom of Agate Passage, Holt grabs the neck of a squirming clam and quickly blows away the sand around its shell with a tube of compressed air.
In cooler weather, the clams burrow deeper. A round dimple in the sand is the only giveaway of their presence.
Holt, the tribe’s most successful harvester, pops his quarry into a mesh bag he carries over his shoulder.
He can collect 400 pounds of clams in 40 minutes.
“Diving is something I have always wanted to do,” says Holt, 30, a former commercial fisherman. “I’d done it a few times before, but now it’s my job.
“I can see this lasting forever,” he adds. “This is a great job.”
Whether that remains true is a prime concern of U.S. and Canadian officials. They are studying the best ways to manage harvesting of the geoduck, which has a life span of 130 years.
They say the big bucks are already attracting the wrong kind of attention.
In the late 1980s, Washington prosecutors filed charges against the then-largest geoduck firm in the state, Washington King Clam, alleging fraud and illegal harvesting. That firm went out of business.
Since “Clam Scam,” state officials have policed the geoduck industry aggressively, using patrol boats to monitor the harvesting. They fear that the tribes, with fewer resources and less experience, will look the other way when their divers stray outside their designated harvest area or will over-harvest.
Poaching is also a growing problem, because a skilled diver can easily harvest $2,000 worth of geoducks in a night, according to state enforcement officials.
But Scott Brewer, deputy director of natural resources for the Port Gamble S’Klallam tribe, said the Indians recognize the importance of protecting this lucrative fishery if they want to become players overseas.
“Collectively, the tribes can make a big impact on this market,” he said. “Big clams, big money, big markets. Everything about this is big.”
