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 ISL MARKETING & DISTRIBUTION STRATEGY
The marketing and distribution strategy for ISL is focused on developing and maintaining long-term relationships with distribution channel members. ISL also strives to differentiate its products to achieve a consistent supply and quality. ISL believes the scallop market effectively functions as a commodity market and therefore relationships with distributors are important.
To develop these relationships, ISL has identified key purchasing criteria for the distributors: price, quality and consistent farmed supply. In the short term, ISL intends to adopt a pricing policy equal to the market wholesale prices. In other words, the Company does not intend to set any promotional or premium prices for either the whole or shucked product, but instead to sell the products at the market rate. This would mean ISL's products would compete on other factors, such as supply and consistent quality.
Over the long term, for the reasons noted below, ISL wants to differentiate their products so that they can command premium prices. Freshness is an important factor for scallops since whole scallops only have a shelf life of approximately seven days while shucked scallops remain fresh for up to 20 days. Due to this short shelf life, distributors try to offer the freshest products. ISL believes it is in a favorable position to supply fresh products to U.S. brokers/distributors, especially those located on the west coast where demand for the product is strong. Currently, these brokers/distributors are supplied with east coast North American scallops, which have several transportation-related delivery delays that decrease freshness.
Supply is another key factor where ISL has a distinct advantage. Based on the planned scallop projection, ISL has a large quantity of scallops for sale. Therefore, a distributor would not have to out-source numerous suppliers, which costs time and money. This makes ISL an attractive source for scallops, since they are able to satisfy the demand of their distributors, which will save them time and money.
Taylor Agreement
Traditionally, as described above, we have sold live scallops within the Pacific Northwest market. We recently received a $2.0 million order with Fanny Bay Oyster Co., a division of Taylor Shellfish Farms of Shelton, Washington (an international seafood distributor and the largest shellfish company on the West Coast). The order includes live scallops, fresh scallop meat and frozen scallops to be farmed in Edgewater Foods' Qualicum Beach, British Columbia, operation, and packaged and delivered in various scallop products (including live in-the-shell, frozen half-shell and fresh meat). As a result of this order, Fanny Bay will become the effective exclusive distributor of our scallops outside the European market. We believe this order will reduce cost and encourage additional wholesalers within the Taylor network to carry our scallops. In addition to the Taylor sales agreement, we also recent finalize an order to provide frozen scallop meat with roe to the European market. We believe that this strategic relationships with enable us to capitalize on the large European demand for quality seafood products.
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 MARKETING / DISTRIBUTION  SCALLOPS BLACKCOD GENERAL FISHERIES |
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