Paul Jewer is the CEO of High Liner Foods, a value-added, publicly traded distributor of frozen seafood across North America, headquartered in Lunenburg, Nova Scotia, Canada. Santiago Alvarez is the CEO of the Alfa Gamma Group, a vertically integrated seafood company based in Miami, Florida, U.S.A.
The two spoke on a panel titled “Inside the C-Suite” at the Global Seafood Market Conference in Orlando, Florida, U.S.A. on 24 January, moderated by SeafoodSource Executive Editor Cliff White. Their comments have been edited for clarity.
SeafoodSource: The last year has been a difficult one for the seafood industry. What is the biggest challenge facing the industry in 2024?
Jewer: Supply and regulatory issues that impact supply are something we all face – day in and day out. I think what we want to try to do is shift the conversation to demand and what it is we need to do to drive higher consumption of seafood and really please our customers and consumers with what we have to offer.
Alvarez: For me, I think it's the negative stories. This is not a new thing for our industry. I think we always have a big target on our back. I think there are things that the industry needs to fix. But, that target is there because we have such an interesting story. You know, our fisheries are so diverse, and I think we need to flip the script and really get back to the positive stories. There are great stories on sustainability. There are greats stories on the social aspects of our industry. Think about all these small coastal communities in developing countries as well as the U.S. and all the benefits and opportunities that the fishing industry supplies for those communities. We have to get better at communicating all those positive stories.
SeafoodSource: What are the issues that keep you up at night in regard to how you’re running your business or organization?
Jewer: Consistency and sustainability of supply and ensuring we can serve our customers and consumers with what they are looking for is something that we're focused on. But, also the fact that, unfortunately, we've seen contraction in demand for seafood. We know customers and consumers are oppressed from an economic perspective, and it's up to us to find ways to deliver more value to them. So, that is a big focus of ours as we look forward in 2024, and I believe frozen, value-added, and innovation are ways that we'll be able to do that.
Alvarez: From the supply side, climate change and its effect on harvests is a big concern. As fishing vessel operators in Central and South America, we're used to the cyclical aspects of El Niño and La Niña, but climate change certainly amplifies the effects of those cycles, and changes and effects on biomass are the most difficult to plan around. Another issue is the economic environment and availability of capital. While you don't have a lack of capital availability in the U.S., in some of the countries where there is microcredit financing or no financing at all for some vessels, any outside disruption because of lack of demand or otherwise will mean that you’re not going to have that subsequent cycle of vessels going out.
SeafoodSource: Both of your companies source from all over the world and deal in many different species. How have you dealt with all the complications in the past year caused by a pricing decline and geopolitical issues?
Jewer: It's really important to look back over the last four years to talk about that question in context. Think of what we as an industry had to do and the supply disruptions that continue to exist post-COVID. It got to a point where, unfortunately, we found ourselves in 2022 shorting customers; that was something we really do not want to be doing. So, we invested heavily, built inventory levels in 2022, and then faced a decline in demand in 2023. We worked very hard in 2023 to move through those inventory levels, and we believe we're in a better-balanced position today; we look forward to 2024 to focus on increasing demand that we need to stimulate.
Alvarez: For us, navigating any disruption, our vertical integration makes it a little bit easier. We can spread some of the costs associated with a disruption between our harvesting and operating companies and process any relevant information about supply chain delays if and when harvest or demand changes quickly. The more information that flows freely – at least we find within our organization – makes it much easier to make an informed decision, whether it's on the buying side or on the distribution side.
SeafoodSource: How have high interest rates impacted your business?
Jewer: Our biggest concern on interest rates is the effect that it's having on consumers and their choices. Even in severe economic downturns, people still eat. We as an industry need to find ways to deliver the value that consumers are looking for in those times when they're forced to make more difficult choices.
Alvarez: There is a lack of traditional funding sources in many developing countries. One example is Peru, where small vessel owners don't have access to a line of credit or other capital from a bank. These fishers often rely on informal financiers who invest money that the vessel uses to buy fuel and supplies and then wait until the harvest comes back to get repaid.
In these situations, any disruption that affects the harvest cycle is difficult for the vessel owners or their financing to adapt to. The informal financiers are reluctant to lend if the fishing is slow or prices are too low, resulting in disruptions in harvest and supply.
Another thing we are seeing is a disruption in the speculative market. Buyers and importers are less willing to speculate, in part because the cost of capital is so much more expensive than it was a couple of years ago. For smaller species, this can become a big disrupter because speculators aren’t willing to sit on inventory or advance funds with unknown demand, as high interest rates significantly increase the risks involved.
SeafoodSource: Are there any positive areas for the seafood industry or opportunities in this very muddled market we’re in right now?
Jewer: There are a couple for me, for sure. First of all, I am thankful we sell seafood. There are lots of other things that if we were selling, I would see fewer opportunities. I also believe that consumers know that North Americans should be eating more [seafood]. So, that's a wonderful opportunity for us to be able to capitalize on. If you look at younger demographics and how they're underconsuming seafood even more significantly, that's a wonderful opportunity for us, and that's something that we're focused on, particularly getting to university and college kids to have them try seafood.
Alvarez: I think there is a great opportunity to clearly communicate with your customer and share information. So, while there are always difficulties in the market, the more you can really build a program where the customer understands the harvesting issues, whatever financing issues there might be, as well as supply chain disruptions, the better. Having the ability to communicate the full picture with the customer allows them to be as flexible as they can on species or specifications. That transparency is a huge opportunity that really drives the relationship.
SeafoodSource: What is a top priority for your company in 2024? What is your company doing differently in 2024?
Jewer: We certainly have to be a little careful because we are a public company. We believe very strongly that we are doing well, and we've had quite some success over the last five years growing the bottom line in our business. But, we think it's time that we find more opportunity to grow the top line business, and that's why you hear me talking about how much we're focused on driving demand and working with our customers and with consumers. That’s a number-one priority.
Alvarez: For us, it goes back to that idea of having partnerships, and that goes both toward the customers and the supply side. So, we really look at both sides and see how we can help on the customer segment. The numbers on retail sales may be coming down, but they're still higher than they were in 2019.
There are a lot of consumers who were exposed much more to seafood and cooking seafood themselves during Covid. Those customers and potential customers offer a lot of opportunity for us as suppliers today, and that idea of a partnership also goes the other way. We make sure that we take care of the entire supply chain, especially our harvesters. We understand that there are going to be difficulties, but opportunities abound for seafood.
SeafoodSource: Do you have any ideas for getting young people into eating more seafood and maybe even working in the seafood industry?
Jewer: We are absolutely a people-first culture, and we're very purpose-driven as an organization. We think having our people understand our purpose – “Reimagining seafood to nourish life” – is something that's so critical. We also have the benefit of being very proud to be an organization that this year is 125 years old, and even though we're 125 years old, we see tons of opportunities and look forward to helping our people understand that we stand on the shoulders of giants that came before us in this industry and in our organization.
That, I think, really excites young people in our company to think about what they can do to create the next chapters in our story. [On] technology, I think one of the things that we're looking at as an organization is now that we've invested in the infrastructure that we needed to invest in, there's a great opportunity for us as we look forward to really use data to allow us to make better decisions and reach out to our customers using social media.
Alvarez: A positive and cohesive focus on all the delicious seafood that we sell to the world is how we're going to change some of the negative and incorrect perceptions about seafood. We have an awesome story. We have a very diverse story, varied in every single sector. Any time you sit at a dinner with a friend and mention you work in the seafood industry, their eyes light up because they know you have good stories.
I'm bringing more of the perspective of a family business. We've been in business for 40 years. From a people perspective, we have associates who have been with us for more than 30 years; they really become part of the family, and that gets translated all the way from Miami to Ecuador, Panama, wherever they may be.
But, attracting new recruits to the seafood business is tough. It's a knowledge-heavy industry, especially when a company deals with a lot of species. We work hard on trying to have mentoring in our company. That 30-year veteran who knows every single Latin name for every single species has to really do a brain dump into the young people to help them get that insight.
I will tell you we’re actually hosting a group of students from my son’s high school next week. When they come in and you open up the warehouse and the freezer and they see all the fish, they get really excited. This is a super interesting industry, and communicating that more widely is going to be helpful for hiring and getting more young people involved in the seafood industry.
Photo by Chris Chase/SeafoodSource
