In part two of a two-part interview, Keith Decker, president and COO of High Liner Foods USA, talks about the weak U.S. dollar’s impact on his company, the success of High Liner’s latest product line and pangasius’ potential in the U.S. market. Based in Nova Scotia, High Liner is one of North America’s laregest seafood companies.
In part one of the interview, which ran on Monday, Decker talked about overcoming China’s rising labor costs, Vietnam’s growing importance to the seafood-processing world and why consolidation is the way to go. Click here to view part one.
Hedlund: How is the weak U.S. dollar impacting High Liner’s business? Is getting more difficult to compete for available seafood supplies?
Decker: We’re paying a lot more for imports in comparison to other currencies. That’s causing some challenges with pricing. Seafood is expensive. And over the next five years, seafood will continue to be expensive. You have a depreciating dollar. You have commodity prices — prices of corn, wheat and soy are all going up. They’re at significantly higher prices now than they were a year ago. You have oil prices, which are also up. And you have Asian consumers, who want to eat more protein.
Seafood is an expensive protein, and it’s going to continue to be expensive. I just don’t see a lot of activity that would cause seafood prices to fall. The only one that came down in the last 12 months as far as I know is pollock, and that’s just because the quota was increased by 30 to 35 percent. But other than that, everything else is up substantially. And it will continue to be up. I just don’t see a large increase in biomass in aquaculture or wild that is going to offset increased consumption worldwide. If you look at tilapia production as an example, I just don’t think that’s there’s been enough hectares of production or increased stocking densities that would produce a lot of extra product.
Let’s switch gears and talk about consumers. Is there a product line that’s doing particular well for High Liner?
Our FireRoasters™ line is probably the most successful major platform launch for us since we launched Upper Crust™ in late 2003/early 2004. There’s an aging Boomer population. There’s a trend toward healthiness. There’s a lot of positive media on eating more seafood. But I also believe that people are moving toward a cleaner seafood product. They want something that is all natural, that is less coated without a lot of breadcrumb or batter. I call it “simply seasoned.” They want something that is clean in appearance with all-natural ingredients, low in fat, low in sodium, which appeals to a more ohealthy lifestyle.
Our FireRoasters™ line was launched with that in mind. We were extremely please with the product launch. It was a great platform because it touches on where I think seafood is moving. A lot of consumers want to buy seafood, but when they get it home they’re still confused about what to do with it. So they put some lemon-pepper seasoning on it and bake it in the oven. Our product lines give them something made from scratch with a back-of-the-house appearance. It gives them something that is bold — bold flavors with on-trend ingredients. They get home, they put it in the microwave or oven and they eat dinner in 15 minutes. Like most American families, my wife and I are talking at 4:30 in the afternoon about what’s for dinner that night.
What species has yet to reach its potential in the U.S. market?
Pangasius. It’s a species with a large biomass. It has a great price point, sitting between pollock and tilapia. And yet it still hasn’t caught on in the U.S. as a mainstream, marketable product. It tends to fly under the radar screen, whether it’s marketed as whitefish or as basa, swai or pangasius. It just hasn’t hit where tilapia is. I liken pangasius to tilapia 10 to 15 years ago — it’s [No. 10] on the U.S. seafood consumption list and yet most Americans do not know what the product is. And there’s been a tremendous fight over the last few years with the domestic catfish industry, which has really stalled the development of [pangasius] as a good-quality, low-cost raw material for commodity and value-added operations. It’s a species that really could and should take off. There should be more development work, there should be more value-added product. But until some of these concerns get taken care of by the U.S. Department of Agriculture, it’s going to continue to stall [pangasius’ potential] in the U.S. It’s typically 70 cents a pound cheaper than tilapia. It’s just a great value. But a lot of companies, ours including, have hesitated to jump full speed into this not knowing where this ruling will come out from the USDA.
