Inflation has taken a bite out of Highland Park, Illinois, U.S.A.-based Mazzetta Co.’s profits over the past year, but Joe Chekouras, the company’s vice president of operations, said he expects a return to better times in the second or third quarter of 2023.
In an interview with SeafoodSource at the National Fisheries Institute’s 2023 Global Seafood Market Conference in La Quinta, California, U.S.A. on 17 January, Chekouras and Mazzetta Director of Sales, Strategy, and Channel Management Bennett Goldberg said their company's yearlong battle with tangled supply chains and intense demand has mostly resolved.
"We're in the same position as a lot of other companies that are here at GSMC in terms of some of the inflation headwinds that we faced in the last half of 2022 and we’ve been facing into the first quarter of 2023,” Chekouras said. “A lot of that had to do with inflation, but there's still supply chain imbalances. And you know, through COVID, we were trying to catch up with supply chain. Then the floodgates kind of all released at once and a lot of people had a lot of inventory in the U.S. Now things are starting to balance out a little bit, so we're looking forward to a much better Q2 and Q3 going into the end of 2023.”
Chekouras blamed overproduction in response to sales of frozen and fresh seafood in the U.S. hitting all-time highs in 2021 for some of the issues the industry is now dealing with.
“We're sitting on raw material. There were container shortages which impeded shipping to the U.S. and then once things freed up, everything came in at once, so there is a lot of inventory around,” Chekouras said. “At the same time, inflation started increasing and people started buying less and switching their buying patterns. And so a lot of companies, ourselves included, had a lot of frozen inventory we were putting in stock and are starting to move through now. People we've talked to here at GSMC people – we're all seeing the same thing.”
Chekouras declined to go into details regarding the company’s sales through the pandemic, but said Mazzetta has been operating “pretty much a breakeven level” through the recent crunch, and that he expects profits to pick up through the second half of 2023.
A key takeaway for Mazzetta through the pandemic has been “the importance of being nimble as a company and being able to pivot,” Chekouras said.
“We stay in close contact with our customers and our suppliers and as things shift, we need to be able to shift with them as well,” he said.
U.S. consumers have shifted from eating more at home and splurging on higher-end products like snow crab and lobster during the peak of the Covid pandemic to eating out more and cooking more-affordable items at home, he said.
“They’re moving into items where they can get a little more bang for their buck is one of the big takeaways we've seen and noticed as a company,” Chekouras said.
Goldberg said he has spent a lot of time looking at Mazzetta’s historical sales data, but that ultimately, he decided it isn’t useful for predicting current trends.
“You just gotta throw out the window,” he said. “It has been a lot of reactionary [work] but luckily for us, we're very diversified in our products and product lines.”
Goldberg acknowledged, despite a strong start, the company’s launch of its Oishii shrimp line in 2019 was harmed by the subsequent beginning of the Covid pandemic. But the brand has continued to see success despite the market‘s irregularities, he said.
“Oishii has definitely been a great a great thing for the company. It’s still being received well in the marketplace, and we're really excited about what that brand is and what it represents, and how it fits a niche for premium, unadulterated shrimp,” Goldberg said. “While the launch paralleled a tougher time, anybody that experiences [Oishii], whether it's our customers or whether it's somebody that's sitting in a restaurant and getting a shrimp cocktail. So I think that's one of the big reasons it's not only sustained itself throughout maybe a tough time but there's been some really good growth.”
Mazzetta recently hired Jack Lombard, formerly the business development manager at Portland, Maine-based Ready Seafood, to be the company’s new senior director of sales. Lombard will remain based in the U.S. East Coast.
“He brings a wealth of seafood experience and seems like a great person, so we're excited to have him part of the team,” Goldberg said.
Overall, Goldberg said, Mazzetta is betting the long-term future of the seafood industry is bright.
“Regardless of the state of the economy right now, there is still such a big opportunity to grow the category, not just as our company, but as an industry. We need to be pro consumption in whatever format it's in.”
Photo courtesy of Cliff White/SeafoodSource
