Seafood Processing and Distribution
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Industry Overview
The US seafood processing and distribution industry consists of 600 fresh and frozen seafood processors; 100 canneries; and 2,500 distributors; with a final commercial value of $12 billion. Annual revenue is around $9 billion for fish processors and $12 billion for distributors, although many companies are involved in both businesses. Major companies include Red Chamber, Trident Seafoods, Tri Marine International and the US business divisions of Maruha Nichiro Holdings. The industry is relatively fragmented: the 50 largest processors control about 45 percent of its total market and 50 largest wholesalers account for one-third of the distribution market.
This industry includes the processing and wholesaling of both wild-caught and farm-raised seafood. It doesn't include commercial fisheries or aquaculture operations.
Competitive Landscape
Demand is driven by domestic trends in fish consumption and, for processors, competition from imports. The profitability of individual companies depends on throughput and route efficiencies. Large companies have advantages in vertical operations and economies of scale. Small companies can compete effectively by specializing in sustainable practices or servicing a local market. Average revenue per employee is $225,000 for a typical processing facility and $500,000 for a typical seafood wholesaler.
Products, Operations & Technology
Major products include frozen fish (30 percent of processing revenue); frozen shellfish (20 percent); fresh fish and shellfish (15 percent); and canned seafood (15 percent). Other products include industrial goods like fish meal and fish oil.
Important frozen fish products are groundfish (cod, haddock, pollock, and whiting) that is either battered and breaded, processed plain, cut into fillets or steaks, or formed into sticks. Alaskan pollock, the largest processed product in both revenue and weight, generates around $500 million annually in fresh and frozen form. Annual revenue from fresh and frozen salmon is around $200 million. Breaded fish and shrimp generates around $700 million in annual revenue. Key canned products include tuna ($700 million annually) and salmon ($250 million).
Seafood processors work onshore, at bay on floating offshore processors, and on at-sea catcher-processing vessels. Most processors are located onshore in permanent structures. Workers unload fish from the dock, load them in a hopper, degut fish on "slime lines," and prepare fillets. Other tasks include shoveling chipped ice, recording weights, moving stock, and grading seafood. Secondary processing can include breading, canning, cooking, and extracting protein. Work is done in a highly automated, assembly line fashion modified to fit the type of seafood processed. A large onshore processor can prepare 50,000 pounds of fish a day.
Floating (offshore) processors are ships or barges that have been converted into fish processing factories. Floating processors usually dock in remote, sheltered bays in key fishing regions for up to three months at a time. Processors receive fish from commercial fishing vessels, which allows the fishery to bypass the time and expense of docking onshore. The floating processor may also provide the fishery with additional food and fuel. Workers haul in the seafood, sort and process it, and freeze it below deck. Once the ship's holds are full, it docks briefly at port to unload its frozen catch for further onshore processing or shipping. The floating processor immediately returns to sea to resume operations.
An at-sea processor combines fishing and processing operations. Alaskan at-sea processors catch, process, freeze, and store groundfish like cod and pollock, producing fillet products and surimi (minced fish used to make imitation crab meat). The average at-sea catching-processing vessel is around 300 feet long and employs a crew of 125 each fishing season. Excursions range from 10 days to two months.
Large processors often manage vertically integrated operations that can include commercial fishing, primary and secondary processing, import/export services, wholesaling, co-packing, and branded consumer products. While large processors often wholesale the fish they process, most wholesalers are small, family-run operations. Wholesalers buy processed fish, store the seafood under constant frozen or refrigerated conditions, and rely on a fleet of trucks to deliver fresh fish to its customer base. Because of the perishable nature and heavy weight of fresh seafood, wholesalers usually operate in a relatively small local market.
Common inputs in both processing and wholesaling include packaging materials, bunker or diesel fuel, ice, and machinery or truck repairs.
Recent technological advances include computer-aided automation in sorting, processing, and canning. For at-sea processors, new fish-sensing technologies and advanced hauling gear have improved catches, increased productivity, and reduced the number of unwanted fish and bycatch (non-targeted, unwanted species). Wholesalers now rely on on-truck GPS navigation, which can reduce driver error and increase the number of stops per route. Improvements in refrigeration and freezing have helped reduce the risk of spoiling.