How a large U.S. crab processor grew overseas
Major U.S. crab importer and processor Handy International has expanded internationally and developed innovative products to meet the continuing demand for crab globally. While the Crisfield, Md.-based company has hit a few road bumps – such as record-high crab prices in 2014 – since the Conway family purchased the company in 1981, it has primarily realized continued growth.
SeafoodSource caught up with Todd Conway, who was recently promoted to president and COO of Handy (Todd’s father, Terry, remains as CEO).
Blank: How has Handy expanded internationally in recent years?
Conway: We have brought standards developed in our Crisfield processing facility to Asia. To grow the company, we had to grow where the resource was. Since the early ‘90s, we have had 12 or 14 different processing facilities and one office in Asia, using the same operations as at our Crisfield facility. We have hired 48 college-educated, English-speaking food technologists to oversee our processing overseas, to make sure we have safe, high-quality products. Most [of the crab processed in Asia] is brought back to North America. Now, 90 percent of our sales are for products sourced from Asia.
We have also grown with some of our customers like Costco, which has grown in the United Kingdom, Europe, Asia, Australia, Canada and Mexico. In addition, a U.K. foodservice distributor brings in Handy’s crab cakes and soft crab primarily, and distributes them throughout U.K. and Europe.
Blank: Does Handy primarily sell its crab cakes and processed crab products to the retail or foodservice channel?
Conway: The majority of our sales are into foodservice, but we also sell into retail and club stores.
Blank: How has the strong U.S. dollar both hurt and helped your business?
Conway: We did have more soft crab business in Japan, but the crab got way too expensive for that market. The Japanese yen weakened in 2014 (against other major currencies), so imported products (including soft crabs imported from other Asian countries) became more expensive. We have lost some sales because of that, but it is very minimal. Also, pasteurized crab meat prices increased significantly (about 25 percent) in 2014, primarily due to strong demand relative to supply. I don’t think exchange rates were a major factor in the price increases. Prices have since decreased and stabilized, as supply and demand have come more into balance.
The strong dollar helps because (we) can source products cheaper and bring them back to the U.S. The U.S. dollar has strengthened some in 2015, which may have played a role in lower crab meat prices, but I think the bigger factor was demand relative to supply.
Blank: In what other ways is Handy growing its sales?
Conway: We are starting to build our online presence via sales through our web site and Amazon. It’s small so far. One of our goals is to expand this store further, especially in view of the growth of the online grocery business.
We identified the gluten-free trend early on, and it has really been a growth driver for us. I don’t think it’s a fad. Costco has our gluten-free crab cakes. Retail picked up on it first, but we are seeing growth in foodservice now.
We came out with a combination crab meat container for crab cakes. It contains four grades of crab meat in a one-pound plastic cup. That is growing for us. We have also gotten into GMO-free ingredients – we are creating a private label product for a retailer right now.
Many years ago, we processed oysters out of Chesapeake Bay, and we have gotten back into processing oysters. We sell them primarily frozen on the half shell. We can’t produce enough right now.