Purchase of Caito Fisheries advances Southwind Foods' acquisition strategy
Carson, California, U.S.A.-based Southwind Foods recently entered an agreement to acquire Fort Bragg, California-Caito Fisheries, solidifying a business relationship that’s older than Southwind itself.
The acquisition includes Caito's four locations in the U.S. state of California – San Francisco Pier 45, Fort Bragg, Eureka, and Crescent City. All the locations buy fresh seafood from California fishermen, including Dungeness crab, salmon, black cod, halibut, and rockfish.
Southwind Foods President Sam Galletti told SeafoodSource the two companies have done business each other for decades, and the acquisition will allow Southwind closer access to the fishermen that Caito Fisheries relies on. Both companies are family-owned, and Galletti said the relationship between the Caito brothers and Southwind is older than Southwind, which was founded in 1999.
“My family business, which started way before I was old enough to work, they were already doing business with Caito back in the late ‘70s,” Galletti said. “The relationship between the two organizations and the two families goes way back.”
Galletti said the acquisition will not fundamentally change how Caito Fisheries is operated, with the Caito brothers – John, Joe, and Jim – all remaining with the company.
The acquisition is a natural fit and mutually beneficial for both companies, Galletti said.
“Knowing the Caito brothers for as long as we have, and them knowing us for as long as they have, I think it was a natural lead into a conversation about, 'Hey, you know our strategy is for acquisitions, our strategy is for growth,’” he said.
Galletti said the acquisition lends itself to that growth strategy. In 2017, it acquired California seafood distributors Galaxy Foods and Equator and, in 2021, it bought Certi Fresh Foods and Terra-Sea Foods.
“For us to be able to have the opportunity to deal directly with the fishermen, to deal directly with the resources, we feel that makes us a so much stronger as a supplier to our current customers,” Galleti said. “That’s really the key to it. It wasn’t so much the amount of top line revenue that they [Caito] do, it was more about supply and the strategic categories that they bring to the table.”
Along with the acquisition, Southwind also announced it is constructing a 40,000-square-foot processing, storage, and distribution facility in Salt Lake City, Utah, U.S.A. Construction starts April 2023 and is expected to be completed by April 2024.
“That’s been something we’ve been working on for about three years now,” he said. “We bought a piece of land in Salt Lake City that’s probably 10 minutes from the international airport.”
Southwind Foods has done business in Salt Lake City since 1976, but an expansion into Utah required additional space for the company to operate, Galletti said.
“We do distribution there in supermarkets and restaurants [in Utah] and the business has grown, but we found that with our current facility we just can’t grow anymore,” he said. “We think it’s a great opportunity for us to grow in a region that is definitely growing in population, and we think it’s a strategic hub for potential frozen products that can be distributed nationally.”
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Photo courtesy of Southwind Foods