North Atlantic acquisition opens up opportunities for Slade Gorton
Slade Gorton’s acquisition of North Atlantic Inc. is intended to burnish the company’s sources of supply of sustainable, tropical fish, according to Slade Gorton President and CEO Kim Gorton.
Founded in 1928, Slade Gorton is a third-generation, family-owned seafood importer, processor, and distributor based in Boston, Massachusetts. It announced its planned acquisition of Portland, Maine, U.S.A-based North Atlantic on 10 August.
“The primary species the absorption of North Atlantic helps us with are grouper, snapper, mahi, tuna, and swordfish. This is really an opportunity for us to grow that category of tropical species, expand our sources of supply, and move closer to the source so we can influence best practices,” Gorton told SeafoodSource. “Our role in the supply chain is really to connect our customers as closely as possible to their food source, and we have spent almost 100 years now developing a global supply network allows us to do that. The closer we can get … to the source of supply, and the better the access, the better the continuity of supply, as well as the better visibility into what’s happening on the water there.”
The two companies have similar philosophies when it comes to sustainability, Gorton said. Gorton praised North Atlantic’s introduction of a worker empowerment initiative designed to improve the social responsibility of its seafood sourcing in Indonesia, for which Knehct was nominated for a Seafood Champion Award in 2018.
“North Atlantic and [owner] Jerry Knecht have spent many years developing a model achieving greater levels of sustainable harvesting. We’re investing in an organization that has been so innovative and forward-thinking in how they’ve looked at every aspect of sustainability. North Atlantic is known for having developed a system that helps move social welfare through the supply chain along that continuum of progress, and that’s also something that’s very important to us,” Gorton said. “My family been doing this for five generations, and it’s our top priority to ensure our practices are sustainable across every type of metric. Having boots on the ground and being close to where the fish are coming out of the water, we can now see firsthand what’s going on with our suppliers, and that enables us to have a focused impact on monitoring and improving practices there.”
Around 97 percent of all seafood sold by Slade Gorton is sourced from fisheries and farms that are certified as sustainable, and the company has the goal of pushing that coverage to 100 percent soon. That process is difficult and involves close coordination with fishermen on the water around the globe, Gorton said.
“We help to implement best practices, whether that’s in processing, food safety, or sustainability. Working with new suppliers enables us to help them move along the continuum of improvement in those aspects,” she said. “We are big believers in not simply cutting off sources of supply if they are not currently meeting sustainability standards. Obviously, we demand certain minimum standards, but we think it’s really important to meet people where they are and help move them along the continuum. That is how we believe we can make marked improvement over the long-term. Managing to the extremes is not something I believe in. Being closer to the source also allows for better and easier communication, so we become a hub for information between the fishery and our customers, which makes it easier to efficiently plan to optimize supply chain.”
For Knecht, Slade Gorton’s commitment to extending his work on sustainability was a key factor in his decision to sell. Under the terms of the sale, Knecht will continue to work for Slade Gorton as a consultant.
“My role going forward is primarily twofold: to support the growth and success of our key customers and to continue to develop our sustainability platform. North Atlantic has enjoyed rapid growth in the past two years. In order to continue to grow commercially and continue to develop our sustainability program, we needed a strong partner with a sterling reputation that is a hand-in-glove strategic fit,” he told SeafoodSource. “Under my leadership, North Atlantic has been at the forefront of what is a very fragmented sustainability movement. We see an opportunity to build on the foundation laid by North Atlantic over the last 13 years and helping to manage those efforts will be my primary focus in the coming months and years. I believe that measurable change on the water is in reach within the next few years and we are well-aligned to affect that outcome.”
Knecht said he developed a relationship with the Gorton family over the past 30 years that gave him the trust needed to hand over his company when he decided to sell.
“There has been and remains a high degree of mutual respect both on a personal and professional basis. We have worked successfully on joint projects over the years and therefore have a strong commercial and philosophical foundation on which to build,” Knecht said. “Slade Gorton and North Atlantic are both focused on the customers’ success with seafood, the social and environmental impact of fisheries, and feeding the growing global population. These shared values provide a solid basis for alignment of vison and purpose.”
North Atlantic’s four Portland-based employees and five employees in Southeast Asia will join Slade Gorton, and Knecht himself will stay on at Slade Gorton “as North Atlantic and Slade Gorton continue to benefit from my expertise, stakeholder relationships, and years of experience in the industry.”
“I will not retain any holdings in the company as I am close to the years when I will be stepping back. When that day comes, I do not want to continue to be invested in active investments,” he said.
P.T. Bali Seafoods, which Knecht founded in 2009, was not a part of the transaction, Knecht said. Knecht put the company up for sale in March 2021 but has not yet sold it, he confirmed.
“P.T. Bali Seafoods was a platform to develop an industry-led integrated fisheries management model as much as it was to augment our constellation of supply partners. We succeeded in implementing the beta version or our business model,” he said. “The plant has been closed since the beginning of COVID and remains closed as Indonesia presently has a resurgence and is recording the highest infection rate in the world. We are looking ahead at the post-pandemic environment and will determine in the coming months the best option for P.T. Bali Seafood.”
Gorton said she was excited to work with Knecht to maximize the opportunity presented by the changed consumer behavior that emerged during the COVID-19 pandemic, when U.S. consumers began eating more seafood and trying new types of seafood.
“During the pandemic, a silver lining for the industry was that we were able to do a fair amount of retail business. Consumers are now more comfortable preparing seafood at home and that benefits all of us in our sales of all species. That of course goes for the ubiquitous shrimp, salmon, cod, and tilapia, but in particular, the non-core species, which North Atlantic specializes in. And I do think that variety of options is something that has attracted the sales through the pandemic, with people trying out new species they may not be as comfortable in eating or preparing. That variety is one of the things that makes it so interesting as a food source category, and so mysterious – seafood is many animals from many different places, and caught or grown many different ways, and I think that plays into a greater overall interest consumers are developing with seafood,” Gorton said. “The acquisition wasn’t keyed around one key species we targeted – we’re not looking for the next farmed salmon or shrimp in this acquisition. We just see in general the world needs more sustainable protein, and we see our customers not always able to get what they want in a way that meets their criteria. So it’s really an opportunity to open up more supply and expand our supply than it is targeting a specific product. We think this is an opportunity for Slade Gorton to grow our business and help our customers grow their business.”
Gorton declined to reveal the financial details of the transaction and had no comment on a request for the company’s estimated annual sales total. She said her company has around 100 employees.
For his part, Knecht said, even in this next stage of his business career, he will continue to push the seafood industry to improve itself on both social and environmental metrics.
“The environment will not survive without marine life,” he said. “The only full-time stewards of fisheries are the seafood industry. As an industry, we control the balance between success and failure on the most elemental terms. My aim, and that of Slade Gorton, is to make a difference.”
Photo courtesy of Future of Fish