Santa Monica Seafood anticipates healthy revenue growth, expands to US East Coast
Santa Monica Seafood’s revenue is expected to exceed USD 700 million (EUR 640 million) in 2023 as the seafood processor and distributor expands on the U.S. East Coast.
The Rancho Dominguez, California, U.S.A.-based firm surpassed USD 600 million (EUR 552 million) in revenue in 2022 and anticipates passing USD 700 million in revenue in 2023, President and CEO Roger O’Brien told SeafoodSource.
Instead of focusing on acquisitions this year, the company is adding facilities to meet growing demand for its skinpack program for retailers, along with other retail offerings and its foodservice processing services.
In February 2023, Santa Monica Seafood will begin construction on a new 26,000-sqaure-foot facility near Baltimore, Maryland, U.S.A., which will become the third location where it conducts its skinpack operations. The expansion will give the company 100,000 square feet of space devoted exclusively to case-ready, chilled skin-packed seafood, O’Brien said.
“Since launching our skin-packed seafood program in 2016 in Los Angeles and again in 2018 in Chicago, we have seen explosive growth and tremendous support from our retail partners for chilled, case-ready seafood,” O’Brien said. “Opening this third location and expanding our services and capabilities to the Mid-Atlantic and New England regions will give us delivery coverage to approximately 40 states, all within a maximum 48 hours of the pack date.”
The popularity of skin-packed seafood in the U.S. has increased significantly over the past five years, and O’Brien said he expects the trend to continue.
“Retailers are drawn to the packaging format for its shelf-life extension properties, labor savings, and presentation versatility. All one must do is look at retailers in the U.K. to see how case-ready, chilled skin-packed seafood dominates with all major retailers,” O’Brien said. "U.S. retailers tend to follow the U.K. retailers, at least relative to seafood packaging, by a few years.”
SMS also plans to open another new processing facility sometime this year for foodservice and retail customers – but not a skinpack operation. “We have not identified the location of the second facility as we have not yet executed a lease and, until we do, anything can happen and only then can we determine the timing for becoming operational,” O’Brien said.
The first phase of the Baltimore operation will require an investment of USD 8 million (EUR 7.4 million) in leasehold improvements and equipment. The site will initially have an 8-million-pound annual capacity for both plain and value-added case ready seafood, “and we have provided for further expansion of packaging lines and additional facility space to expand capacity as growth continues,” O’Brien said.
SMS will initially hire 30 employees to run the facility and will grow its employee headcount to around 50 as production ramps up.
SMS does not plan to close any acquisitions in 2023, according to O’Brien.
“With all the efforts we have already identified for 2023, including the opening of two operating facilities in two new states, we do not want to be guilty of having too many irons in the fire at the same time,” he said.
While there are a few larger seafood processing and distribution companies that are “very interested” in potentially becoming part of SMS, there will not be serious discussions until 2024 at the earliest, according to O’Brien. Still, company executives will “continue to look at other opportunities that may arise.”
Despite the challenges that nearly all seafood companies dealt with during the pandemic, SMS realized success by diversifying some of its business beyond the foodservice sector toward retail, in the company’s history in 2021. Now, 44 percent of Santa Monica Seafood’s revenues are retail-based, including its skin-pack revenue.
“Most of our remaining revenues are to foodservice, primarily restaurants and the hospitality industry [and] a very small portion of our revenues are from our two retail seafood markets and cafes,” O’Brien said. "We like this near-equal balance between retail and foodservice, since the pandemic taught us the benefits of having such diversity.”
Despite retail faring better than foodservice in 2020 and 2021, O’Brien said he expects “significant growth” in its foodservice segment in 2023.
“Consumers still have a pent-up craving for going out to restaurants. And they prefer eating seafood at restaurants to seafood cooked at home, since they still don’t feel comfortable preparing certain seafood meals and they want to eat healthy when they dine out. Seafood is on top of the healthy food list,” O’Brien said.
In early January, Santa Montica Seafood brought on Patrick Beal as senior vice president of sales. Beal will initially focus on improving the company’s foodservice sales before taking on additional responsibility for retail and case-ready sales, according to O’Brien.
“We have high hopes for his accomplishments throughout 2023, given his vast experience in growing all facets of food sales,” he said.
Beal previously served as vice president at Prime Source Foods, president of U.S. foodservice operations for DPI Specialty Foods, and president at US Foodservice.
In addition to expanding its facilities, Santa Monica Seafood has achieved higher quality certifications at its existing processing facilities. All four of its major processing facilities – SMS Rancho Dominguez, L.A. Fish Company, SMS Chicago, and SMS Albuquerque – achieved ISO 14001 certification in 2022.
“ISO 14001 is an internationally recognized standard that sets out the requirements for an environmental management system. It helps organizations improve their environmental performance through more efficient use of resources and waste reduction while gaining a competitive advantage and the trust of customers and stakeholders. To be awarded ISO 14001 certification, a company must fulfill a demanding and extensive set of standards and criteria established by global experts,” the company said in a press release.
Photo courtesy of Santa Monica Seafood