From napkin sketch to $20 million in sales: Owners of Sea Salt Lobster talk growth

In just six years, Shawn McEwen and Morey Highbarger have gone from a simple napkin sketch to being co-owners of a Saco-based wholesale and retail seafood company, Sea Salt Lobster, with $20 million in annual sales.

They sell fresh, Maine-caught lobsters by the pound, pallet or trailer load. Their customers run the gamut from food trucks, lobster shacks, catering services and big box stores to Asian buyers who've developed a taste for what McEwen and Highbarger unabashedly say is “the most succulent lobster in the world.” They also sell value-added products like lobster rolls, fresh-picked and cooked Maine lobster meat, clam chowder and lobster bisque and that classic Maine dessert, the Whoopie pie.

By the end of the month, they'll be moving Sea Salt Lobster from the Saco Industrial Park into an 8,000-square-foot building under construction on Route 1 in Saco. The new facility, at 660 Main St., will have holding tanks in the rear of the building capable of storing up to 60,000 pounds of live lobsters; several loading bays for shipping; and offices for the wholesale seafood operations. In the front, they'll have a 75-seat restaurant and retail fish market that will sell lobster, haddock, cod, swordfish, tuna, clams, mussels; beer, wine and other beverages; spices; and Maine-made products. Opening day for the restaurant and fish market is tentatively scheduled for June 25, with the lobster pound opening about a month later.

We met up with McEwen and Highbarger at their new location, with bulldozers and graders in high gear getting the parking area ready for paving. An edited transcript follows.

Mainebiz: Why this location? Why Saco?

Shawn McEwen: We really like Saco. We've been in Saco for six years. The business climate here is really positive. We like the idea that we're still close to the coast, and we're close to where we live, in Kennebunk and Kennebunkport.

Morey Highbarger: We're right off the Maine Turnpike, which is helpful.

SM: The transportation logistics are huge. And there's no denying that this is a tourist hub and we happen to be on Route 1, where there's approximately 30,000 cars a day driving past our location.

MB: You started your business in 2009. What was your vision at that time?

MH: This type of business isn't one where you could walk up to the docks here in Maine and say, 'I'm starting a wholesale business' and expect that you'll be welcomed into it. My background prior to getting into this was a brief history working at a lobster-processing plant and through that I was able to make contacts with suppliers of live lobsters. The other piece was that when I was at that processing plant I noticed there were some new and unique processed products from Maine and there weren't a lot of outlets, or the marketing, to support selling those products. The two things we were thinking of: One, we'll market live lobsters. Two, we'll market Maine lobsters that have been processed as value-added products.

MB: Where do you get your lobsters?

SM: We have a specific family and a wharf in the midcoast of Maine that supplies us daily with the lobsters we need, and it’s an untouchable relationship, due to the fact that there’s an embedded amount of trust built into that relationship. Not everything in the state of Maine is about money. A lot of it is about trust and relationship.

MB: Tell us about some of the value-added products you’re selling … such as clam chowder. 

SM: We sell value-added products specifically from Maine. If we can’t find the right vendor, we’ll create the product ourselves. We started a soup company where we started creating our own clam chowder, and we’re going to keep producing that in volume. That product contains Maine potatoes and Maine clams.

MB: Will it be called ‘Sea Salt’?

SM: Yes, it will.

MB: So, ‘Sea Salt’ is your brand?

SM: Yes. That product will also be available for food distribution to some of the large food distributors. I won’t name them, but everyone knows who the large tractor-trailers are that they see on the highway.

MB: Is that product made at a different location?

SM: Yes.

MB: How did you arrive at the name ‘Sea Salt’ and how do you build your brand identity?

SM: The story itself of how the company name came about: It was, as corny as it sounds, written on a napkin, at Allison’s Restaurant in Kennebunkport. That was the first name we came up with.

MB: How important is having a website, and how important is the Internet to your business?

SM: I would say anyone doing the type of business we’re doing has to have an online presence. But in terms of overall sales, it’s a pretty small number. As Morey mentioned earlier, it is a piece of our business. We also like the fact that our negotiated shipping rate not only has to do with our own website, that shipping rate is a ‘product,’ if you will, that’s also available to other local or non-local fish markets, lobster businesses or seafood businesses in general. They’ll be able to get overnight shipping using our rate without having to do it themselves.

MB: Does that mean you become a ‘middle man’?

SM: Exactly. We maintain a fulfillment center. They’re still able to maintain their branding, and we pack the orders.

MB: What exactly do you mean by ‘fulfillment center’?

SM: That means the individual or customer still has their own website selling seafood products. We would either source those products for them or take the products from that customer and fulfill an order that was either given to us directly off the link from their site, or a printed or faxed order from them. Then we would fill the order, pack the order and ship the order directly to the customer with any additional marketing material given to us by the shipping customer.

MB: How many workers do you have now?

SM: We have 18 to 20 people working currently at Sea Salt Lobster. We're looking to add another 15 to 20 people for the restaurant and then three to four more people for the fish market.

MB: Tell us about the restaurant.

SM: The primary focus is on lobster rolls. That’s our business around the country. We serve a lot of people that have Maine-style restaurants around the country. We have a lot of different customers that we service with lobster meat, clam chowder, hot dog rolls, whoopee pies, all products from Maine that we distribute throughout the country. That’s the basis of the restaurant, but at the same time it’s silly to think we wouldn’t be offering all of the wonderful products we sell wholesale out of the back of the house.

How does it play versus Shaw’s Fish & Lobster Wharf Restaurant in New Harbor or Fore Street Grill in Portland? We’d have a real mess on our hands if we’re on Route 1 in Saco or Old Orchard Beach without serving fried clams. So, we’ll be giving people what they want and we’ll be serving fried clams. At the same time if you want a fresh piece of salmon or sushi-grade tuna, I think you’ll find it here as well.

We buy directly from harvesters: Not only clams, but also fish, as well as tuna and swordfish. But in addition to that, we buy directly from lobstermen who are bringing us Maine lobster and crab year-round.

MB: Do you buy from the Portland fish auction?

SM: We do have a seat at the Portland Fish Exchange. …We have about 10 fishermen that fish locally here out of the Biddeford Pool, Cape Porpoise area.

MB: In your wholesale business are you mostly selling to the domestic market, or do you also sell internationally?

SM: I would say we're probably 75% domestic at this point, 25% international. We’re very cautious in this business about where our lobsters go, based on receivables. We need to be very careful in the risk analysis of that. That’s how you survive in this business: By analyzing every product, making sure it’s covered, making sure you know who the customers are, how solid they are and that you have all the necessary parachutes in place if something turns into a disaster.

MB: Obviously, you’re very close to the Maine Turnpike. Are you shipping primarily out of Boston and New York?

SM: That’s correct. We ship out of Boston and New York. We also have a dedicated overnight truck that comes to us daily for individual loose-rate packings.

MB: Maine exports a considerable amount of lobsters to Canada, about $300 million in 2014, according to the Maine International Trade Center. Is that a missed opportunity for Maine companies like yourself to create value out of all those lobsters that are getting shipped out of state right now to Canada?

SM: I think so. But the thing people need to realize about the processing world is that the amount of money tied up in inventory is not in the thousands, it’s in the millions. So that would be the challenge for anyone opening a processing plant in the state of Maine. I think a lot of times Canada is doing us a big favor: The product is ‘hot’ and harvested in such large volumes that it needs to be processed [right away].

MB: In other words, in exporting to Canada, at least Maine fishermen have a market for their lobsters when the lobsters are most available to be caught?

SM: That’s right, because there’s a pretty big percentage of the catch that can’t be shipped live. That’s the reality at this point in time. But there’s a large focus by the Maine Lobster Marketing Collaborative to focus on the sweetness, succulence and tenderness of the Maine lobsters. These are exactly our selling points here at Sea Salt Lobster. We are 99.9% focused on selling Maine lobsters, not Canadian.

MB: So, like anything, there are opportunities if someone wanted to take the risk and become a Maine-based processor on a huge scale. Is it your sense that there would be Maine suppliers who would just as soon support a Maine business doing the processing instead of a Canadian firm?

SM: I definitely feel there would be a large contingency of people who would rather have their product held here in the state of Maine. But there’s also a large reality in today’s environment that makes it unrealistic to think this will happen quickly. The issue isn’t whether someone could build a place to process lobsters. That’s not the problem. The problem is you have to put away millions and millions of dollars holding those lobsters until you can get a good price. You are holding a commodity, essentially, once it’s in the ‘frozen’ basket.

We differentiate ourselves based on quality and taste: It’s not a race to the bottom when we’re selling lobster meat.  Our customers specifically ask for Maine lobster meat and that’s what we provide them directly.

MB: Will the fish market be open seven days a week?

SM: Yes. And we hope to keep not only the fish market open year-round but also the restaurant.

MB: Getting a fair amount of local business, obviously, will be key to that strategy.

SM: Yes. We’re actually going to be putting together a marketing program, a discount for everyone who works at the car dealerships. So they’ll have a discount card available to be of use here. We hope, as our neighbors, they’ll pay us a visit.

MB: You don’t leave anything to chance.

SM: That’s a fair statement. We practice educated and calculated risk.

MB: From 2009 until now, your company has grown considerably. Where do you see Sea Salt Lobster heading in the next five years?

MH: Currently, we're at approximately $20 million in annual sales. We've projected out five years and our anticipation is that we will have doubled our gross revenue. The challenge being, in order to sell that much product, we have to have significant banking relationships that can support the receivables. In today's banking world, it's very difficult to get financing for the volume of receivables that we need.

MB: So it’s never an easy path?

MH: No.