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Editor's Note: Consolidation: bring it on

By Fiona Robinson, Editor in Chief
September 01, 2006

No other protein category is as ripe for consolidation as seafood. Hundreds of commercially available seafood species are sold by thousands of independent suppliers nationwide. But the rising cost of doing business, from labor to transportation costs, is forcing big and small companies to consider the benefits of consolidation.

"Merge ahead," this issue's Top Story by Assistant Editor James Wright, details the latest round of mergers and acquisitions in the seafood business and examines what consolidation means for the industry and the players involved.

The majority of this industry's consolidation involves suppliers selling to large supermarket chains. As the pool of supermarket buyers shrinks, so does the number of suppliers feeding the system.

Small seafood wholesalers selling to millions of independent restaurants in the United States have been able to avoid consolidation, for the most part. Pick a popular commercial fishing port, and you'll find a handful of seafood-only processors and distributors. This fragmented industry is good for the independent chef or retail buyer looking for a lot of options, but it makes more work for them. If a restaurant or store runs out of haddock, the buyer might have to call four or five processors to see who has product available, and at what price.

While many buyers tout their long-standing relationships with their vendors and trust them implicitly, that is not the industry standard. Many buyers purchase seafood strictly on price and don't thoroughly check product when it arrives at the back door. Several whitefish look similar when processed, cooked and plated, which leaves the door open for unscrupulous suppliers to sell fraudulent product.

The St. Petersburg Times brought home the stark reality that seafood vendors are duping Florida chefs by passing tilapia and other species off as more expensive grouper (see Newsline, page 10). Unfortunately this type of fraud is low on the radar screen of state and federal authorities because of a lack of resources. Even if legal action were taken against dishonest seafood suppliers, there would have to be gigantic fines before companies sat up and took notice.

If consolidation pressure is the only way to weed out companies that tarnish the industry's reputation, then bring it on. It'll benefit everyone.

As always, your feedback is welcome. If you're a retailer or chef who has been duped by a vendor, please share your story with me at frobinson@divcom.com or (207) 842-5630.

 

Added note: This issue features a special Industry Leader tribute to Wally Stevens, former president of Slade Gorton & Co., on page 30. Wally retired to Florida last month after dedicating almost 20 years to the seafood industry.

This quote from Future Leaders alumni Jenni Davis at Sea Port Products sums up Wally's leadership role in the industry: "What I will always remember about Wally Stevens is his unique blend of high-power leadership with personable, down-to-earth sincerity. These two character traits are the reason we all, no matter how much or how little our contact was with him, refer to him as an industry leader - Mr. Stevens - as well as a personal friend - Wally."

I'm certain this goodbye is not forever. I look forward to seeing Wally again at future industry events.

 

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