On Monday, 18 July, Fortune Fish and Gourmet, a fresh and frozen seafood and specialty food distributor based in the Midwestern United States, announced the closing of the purchase of Coastal Seafoods, a seafood supplier for restaurants and co-ops in Minnesota and five other nearby states.
Fortune Fish’s President and CEO Sean O’Scannlain spoke with SeafoodSource about the purchase of Coastal Seafoods and future plans for his growing company.
SeafoodSource: How long has your acquisition of Coastal Seafoods been in the works and why did that transaction make sense to Fortune Fish?
O’Scannlain: We’ve been working on the acquisition for about the last nine to 10 months and we announced the closing of the deal on 9 June. We were looking to expand our footprint from our Chicago base…Right now, we cover Detroit, Indianapolis, St. Louis, parts of Iowa, and Madison and Milwaukee in Wisconsin. We’ve expanded as far as we can go from our current facility in the Chicago area, and so we started looking around to see how we could continue to expand.
The key was finding the right partner, the right company to buy and we’ve been very fortunate to close the deal with Coastal Seafoods – it made a lot of sense. Coastal has a similar customer base to us and a lot of customers and operations in Chicago and Minneapolis, both of the regions where it made a lot of sense for us to look at as a growth vehicle.
Coastal is a fantastic company. It was started 35 years ago by Suzanne Weinstein and she has always maintained a steadfast commitment to quality. The company also has great employees who have all been there a long time, and they’re well-known in the Minneapolis market as very high-quality guys. And they’re committed to sustainability, which is another important philosophy that we shared. Overall, the fit was really, really good.
SeafoodSource: What were the terms of the deal?
O’Scannlain: We are not releasing terms of the deal – it was a private transaction.
SeafoodSource: How will you integrate Coastal’s operations into those of Fortune Fish?
O’Scannlain: We have no plans to make major changes. What attracted us to this company was that it had very knowledgeable, skilled long-term employees and they’re doing really well. So we’re not going to change much other than add in new systems, bring in new customers, and increase the sales force a bit. General manager Tim Lauer will be staying on in the near-term – we think the operations and management at Coastal are very good. We’re excited to give Coastal’s employees the opportunity to stay on and grow their careers. We think it will be a win-win for all involved.
As for Suzanne [Weinstein], we have signed a consulting agreement so she will stay on for a number of years. She was looking to slow down a little bit and do some other things in her life. She’s still working part-time in the office to make sure the transition goes smoothly. Obviously, she wants to make sure it’s done right. She’s concerned about the folks she’s hired and developed and wants to make sure they’ll have great opportunities going forward. Also, because of her background in systems, she’s been very helpful to us as we’ve begun installing our new systems and software.
SeafoodSource: How large will Fortune be now, including Coastal Seafoods? What is your new distribution footprint and staffing total?
O’Scannlain: Last year, Fortune had sales in the USD 175-200 million dollar (EUR 159-182 million) range and about 300 employees. The acquisition of Coastal Seafoods will add around 30 new employees, all based in Minneapolis. As a result of the acquisition, we’ll be able further our distribution reach into the states of Minnesota, Nebraska, North Dakota, South Dakota and northern Iowa and Wisconsin.
Also, one thing that we’ll be adding for the first time as a result of the transaction is Coastal’s two standalone retail stores – one in Minneapolis and the other in St. Paul. We’re excited to be involved in direct retailing now, as it’s something we never have done at Fortune. We’re lucky in that the Coastal name is very strongly regarded among the local consumer base in Minneapolis. It has a lot of great brand recognition and a lot of folks have been going and getting fish from Coastal for years. We’re going to keep the stores branded Coastal but we will be rebranding Coastal’s wholesale business to Fortune Fish and Gourmet.
SeafoodSource: Is retail something you wanted to get into, and do you have any plans to expand that side of the business?
O’Scannlain: It’s a new type of business for us but it’s still fish. We’ll see if we can grow it and if it goes well, maybe we’ll expand into other markets. I need to learn more about retail and what it's all about – I’ve been a wholesale guy my whole life. No matter what happens, those two stores do very well and we’re excited to have them as part of our company.
SeafoodSource: You will now be running part of your operations out of Minneapolis…is that a good fit for Fortune Fish?
O’Scannlain: Minneapolis is a terrific town, full of great people and a lot of really interesting chef-driven restaurants that are committed to quality. In a lot of ways, Minneapolis is similar to Chicago, where we’re based. We’ve found it very comfortable up here – the city has Midwestern values. That familiarity with the Midwestern philosophy made taking this step a lot easier.
SeafoodSource: What’s next for Fortune Fish? Any more acquisitions on the horizon?
O’Scannlain: Four years ago, we got into the gourmet food business with our previous acquisition, JDY Gourmet, which supplies high end cheeses, cured meats, chocolates and other very complimentary products. In 2014, we acquired Chef Martin Old World Butcher Shop Sausage. We’ve been very successful growing those businesses and we’re planning to add that into our Minneapolis operation, so that will be exciting. We will continue to look for opportunities amongst other regional players that it makes sense for us to look at acquiring.
So our acquisition streak will continue for sure, mostly likely in the Midwest, where we’re most comfortable operating. It could be in seafood, but we’re open to looking at anything in the gourmet space.
