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Top Story: In seafood we trust
The Top 25 North American Seafood Suppliers post nearly $12 billion in sales during a difficult 2009
By James Wright
May 01, 2010
With just a quick look at the SeaFood Business 2009 Top 25 North American Seafood Suppliers list and the $11.85 billion in combined sales those companies recorded, it might be easy to conclude that fish is still in fashion, recession or no. A select few firms - including the world's largest salmon farmer - posted remarkable year-over-year gains, aided by an overall increase in seafood prices, market acceptance of those higher prices, an uptick in healthy eating and nutritional awareness, or all of the above.
Total sales for the Top 25 increased from $11.41 billion in 2008, a time when any increase - or simply breaking even - could be considered satisfactory.
Closer inspection of the list shows that most of the top companies' sales regressed a bit in 2009 due largely to a dreadful economic stretch for seafood buyers - especially foodservice operators. Restaurants typically account for upward of three-fourths of all seafood consumed in the United States; to meet economic challenges of a recession, many consumers across the country simply chose to eat out less.
According to Chicago foodservice research firm Technomic, sales at the United States' 500 largest restaurant chains declined by nearly 1 percent in 2009, compared to a 3.4 percent increase in 2008. Full-service seafood chains' sales fell 4.2 percent.
What was restaurants' loss should have been retailers' gain, but for the first several months of the recession that simply wasn't the case (see Top Story, June '09 SFB ); seafood was losing the price battle with cheaper proteins. It's turning around, however, says Kim Gorton, president of Boston-based Slade Gorton & Co., which we ranked at No. 15.
"As consumers shifted their behavior from dining out to eating in, retailers and club stores in general were able to capture a greater share of consumer food dollars. However, seafood tends to be more expensive than other proteins, so the retailers who have been most successful with seafood this past year were the ones who were able to offer and promote products that demonstrated value," says Gorton.
"Those strategies ranged from promoting species and products that carried overall lower price points, more narrowly focusing assortment around core products to drive sales and keep shrink down, and working more closely with the vendor community to drive costs out of the supply chain," Gorton adds.
In other words, it takes a lot of work and attention to detail to sell seafood in today's market.
But an increase in sales does not necessarily translate into larger profits. For one thing, the price of fish infrequently drops or stays down for too long, yet suppliers and distributors are constantly pressured to lower their prices - and many do. Supplies of raw materials like fish oil and fish feed are finite (see Top Story, April SFB ) and in greater demand from multiple sectors, which can make even farmed seafood - known for stable prices - more expensive.
Then there's the tight financial market.
Paul Schuldiner, senior VP and business development manager of the purchase order finance group at Wells Fargo Business Credit, is much more confident about the industry's ability to gain financing than he was a year ago. It's a good sign, he says, that requests are increasing for the inventory-based financing his company provides, as conventional lending remains restricted.
"We're coming out of what I call a period of lessened economic activity and slowly we're turning back up," says Schuldiner. "The companies selling to big-box retailers and big restaurant groups, or the value-added processors - as opposed to the commodity-based suppliers - are in a good place. They can afford to have a little bit of margin erosion and weather the storm.
"We just haven't seen a sustained increase in consumer spending," he says.
Consumer confidence in the economy will greatly determine how soon seafood sales and profits will rebound. Top seafood buyers can't wait much longer. In late March, the National Restaurant Association reported that its Restaurant Performance Index (RPI) reached its highest level in 27 months in February. The RPI essentially takes restaurant operators' temperature and gauges their outlook for sales growth.
"There are most certainly 'signs of life' in the market as we see foodservice sales stabilize and slowly creep back up in some areas," says Gorton. "Both retail and foodservice operators continue to focus on offering value, so higher-priced seafood products will likely see a slower recovery in general. However, with consumers buying more seafood at retail, this is a great time to focus on educating consumers about the benefits of eating seafood as well as providing guidance on how to cook seafood to help ensure a positive dining experience at home."
A sharp focus on improving at-home seafood dining experiences is a primary reason why two top-10 companies continue to thrive. Trident Seafoods of Seattle and High Liner Foods of Lunenburg, Nova Scotia, each boast expansive lines of value-added seafood products designed for busy consumers who don't want to spend too much time in the kitchen. Their efforts seem to be working.
High Liner last year was able to build on the tremendous bump it got in 2008 from its late-2007 acquisition of Fishery Products International. High Liner's sales increased 1.7 percent in a year that "provided numerous economic challenges," said President and CEO Henry Demone in the company's annual report.
Trident, meanwhile, attributes much of its continued success to the productive and sustainable seafood supplies in Alaska's vast harvesting grounds.
"The Alaska connection holds very strong for so many Americans who've visited Alaska on cruise ships or lived the life of commercial fishermen vicariously on TV," says Trident Executive VP Joe Bundrant. "I spent six weeks up in the Bering Sea this winter, and it's amazing how energizing it is to stand shoulder to shoulder with so many hard-working employees who care about our seafood and make this company what it is."
Speaking of Trident's nearly 6,000 employees, Bundrant adds, "We owe our success to them."
When asked about his company's performance in 2009, Eric Bloom, president of Eastern Fish Co. of Teaneck, N.J., simply says, "We held serve." Eastern's sales increased from $252 million in 2008 to $255 million in 2009, earning the shrimp importer the No. 21 ranking.
Holding steady during a tumultuous 2009 should bode well for seafood's top performers as the economy begins to recover.
Trident Seafoods Corp. ( 1 ) $1.25 billion-plus | Seattle | www.tridentseafoods.com
Brands: Arctic Ice, Louis Kemp, Portlock, PubHouse, Pure Catch, Rubinstein's, Sea Alaska, SeaLegs, Silver Lining, Trident
Trident Seafoods, founded by Chuck Bundrant in 1973, has evolved from a prominent seafood supplier into an innovative value-added seafood processor and marketer. A major player in Alaska seafood, Trident's product mix includes tilapia, swordfish and mahimahi, along with its staple Pacific Northwest offerings. The company's fishing and at-sea-processor fleet exceeds 35 vessels, while its 17 land-based processing facilities span the Northwest from Newport, Ore., to St. Paul Island, Alaska.
Tri Marine International ( 2 ) $1.15 billion | Bellevue, Wash. | www.trimarinegroup.com
Tri Marine, under current ownership since 1986, captures and processes yellowfin, skipjack and albacore tuna while also offering logistics, quality assurance and other consultation services. The company supplies the nation's "big three" canned tuna brands, among others, and operates 13 purse seiners flying the U.S. or Solomon Islands flags as well as processing plants in California, Colombia, Ecuador, China, Kenya, Mauritius, Marshall Islands and Solomon Islands.
Bumble Bee Foods ( 3 ) $950 million | San Diego | www.bumblebee.com
Brands: Beach Cliff, Brunswick, Bumble Bee, Clover Leaf, King Oscar, Orleans, Snow's
Bumble Bee, founded in 1899, has grown steadily in recent years and 2009 was no exception as sales increased by $50 million. Now reporting to Centre Partners Management of New York, which purchased the company in 2008, Bumble Bee recently closed the last U.S. sardine cannery near the coast of Maine due to sharp herring quota cuts.
Thai Union International ( 4 ) $805 million | San Diego | www.chickenofthesea.com
Brands: Chicken of the Sea, Genova, Sealect, Xcellent
Founded as California Tuna Canning Co. in 1914, Thai Union International obtained 100 percent ownership of Chicken of the Sea International in 2000. In November, parent company Thai Union Frozen Products (TUFP), whose sales exceeded $2.1 billion in 2009, created subsidiary Majestic Seafood Corp. in Papua New Guinea through a joint venture with two other companies to secure greater access to tuna-fishing grounds.
Nippon Suisan USA ( 5 ) $710 million | Redmond, Wash. | www.nissui.co.jp/english/
Brands: F.W. Bryce, Gorton's, King & Prince, Mrs. Friday's, UniSea
Owned by Nippon Suisan Kaisha, or Nissui, Nippon Suisan USA's sales have dipped $40 million the past two years to $710 million in 2009. The company's portfolio is still stocked: It includes seafood importer and distributor F.W. Bryce and Gorton's of Gloucester, Mass.; King & Prince Seafood Corp. of Brunswick, Ga.; and UniSea of Redmond, Wash.
StarKist ( 6 ) $654 million | Pittsburgh | www.starkist.com
StarKist had several owners this past decade: After being sold from H.J. Heinz Co. of Pittsburgh in 2002 to Del Monte Foods, the tuna brand was sold again in 2008 to Dongwon Enterprise Co. of South Korea for $363 million. A shrewd pickup: With a $94 million increase in sales, Charlie the Tuna is one of the biggest gainers on this year's list. StarKist has recently focused on marketing the health benefits related to tuna consumption.
High Liner Foods ( 7 ) $593 million | Lunenburg, Nova Scotia | www.highlinerfoods.com
Brands: Fisher Boy, Seafood Selects, Solo Selects, Captain's Cut, Captain's Classics
High Liner came on strong in 2008, a year after its monster acquisition of Fishery Products International's North American value-added frozen seafood business. The publicly traded company is Canada's largest seafood company and one of the top suppliers of seafood to the U.S. foodservice market. Editor's note: On last year's list, we failed to convert its financial results from Canadian to U.S. dollars, so its 2008 sales were adjusted from $616 million to $582 million; therefore its 2009 ranking would have fallen one slot to No. 7.
Marine Harvest ( 8 ) $496 million | Miami | www.marineharvest.com
Brands: Ducktrap River of Maine, Kendall Brook
Marine Harvest North America, a unit of Marine Harvest Chile, vaults into the Top 10 on the rising price of farmed salmon globally. Parent company Marine Harvest ASA of Norway is the largest farmed-salmon company in the world with operations in Europe, North America and South America, including Chile, where its farms are still reeling from the impact of infectious salmon anemia, which has had a devastating effect on production the past three years.
Beaver Street Fisheries ( 9 ) $480 million | Jacksonville, Fla. | www.beaverfish.com
Brands: HF's Outstanding, Island Prince, Island Queen, Marquis, Pair of Dice, Sea Best, Sea Best Gold, Sea Est
Beaver Street Fisheries, founded 60 years ago as small retail seafood outlet, is one of the country's largest frozen seafood wholesalers and imports from 50-plus countries. Beaver Street's repacking facility in Jacksonville is Best Aquaculture Practices-certified.
American Seafoods Group ( 10 ) $430 million | Seattle | www.americanseafoods.com
Brands: American Pride, Frionor
American Seafoods is the United States' largest harvester and at-sea processor of Alaska pollock and hake, holding approximately 45 percent of the catcher-processor share in the U.S. Bering Sea. The company divested its domestic catfish interests in 2008.
Ranking seafood suppliers by annual sales is an inexact science. SeaFood Business asked qualifying company executives to share financial information and reviewed public companies' annual results. Most leading U.S. seafood firms are private or family owned, and have no obligation to report sales to the media.
Tri-Marine International of Bellevue, Wash. (No. 2), reported 2008 sales of $1.15 billion but did not respond to calls seeking its 2009 sales. For companies that don't participate, their sales carry over from the previous year, but for only one year; companies that do not participate two consecutive years are removed from the list.
There are three noteworthy companies that no longer report annual sales figures, including Red Chamber of Vernon, Calif., and Pacific Seafood Group of Clackamas, Ore. Red Chamber, parent company of two of this year's entries - Tampa Bay Fisheries (No. 16) and Singleton Fisheries (No. 18) - hasn't shared its results since 2006, when it posted $1.016 billion in sales. And the last time that Pacific Seafood shared its annual sales was in 2005, when it raked in $874 million. Maruha Nichiro Holdings, a Japanese conglomerate with U.S. headquarters in Seattle, also declined to participate. The Top 25 list would look noticeably different with the participation of Red Chamber, Pacific and Maruha and their combined $2 billion-plus in additional sales.
Participants are also offered the option of providing a sales range, instead of a specific number. Rich Products Corp. of St. Simons Island, Ga. (No. 24), which markets the SeaPak brand of frozen seafood, provided a range of $170 million to $200 million, the median of which was used.
Associate Editor James Wright can be e-mailed at email@example.com