Steven Chen is president and CEO of Yihe Corp., which has its headquarters in Pasadena, Calif. The seafood supplier and processor is a major U.S. salmon importer.
SeafoodSource: In March, Yihe introduced the Alaskan Jack’s made-in-America salmon line: How does this move fit in with your overall business strategy for the company? In particular, do you see a need to bring more American sourced and processed seafood to market?
Chen: Frontier Harvest Alaskan Jack’s was created with specific consumer metric targets that were voids within the value-added seafood category. Creating an offering that provided the consumer with bold, creative fusion flavors, protein untreated by tripolyphosphate and reflecting clean, good-for-you ingredient statements across an extensive line of Alaskan wild-caught keta, cod and sockeye species, has been validated in repeat sales by both retailers and customers. Yihe absolutely feels a social responsibility to produce additional products stateside and, with the opening of the new production facility in Los Angeles this year, will be proud to support the American workforce.
SeafoodSource: Yihe relaunched itself in 2014: Talk a little bit about that journey and how you managed that process. Would you consider that your biggest business challenge thus far, and what did you learn from that experience?
Chen: The financial climate in China changed rapidly in 2014, and there arose challenges that were prohibitive to sustaining our exponential growth trends. Having to pause and restructure our company stalled our momentum, but finding the right financial partners alleviated these concerns and allowed us to focus on servicing our long-standing retail partners.
We have always been a strong player in the salmon category, leveraging our ownership of plants and direct relationships with key Alaskan fishing co-ops and, from this position of strength, we were able to leverage the creation of Frontier Harvest Alaskan Jack’s. The combinations of commodity private brand supply, along with the launch and continued growth of Frontier Harvest Alaskan Jack’s has allowed Yihe the ability to build a substantially stronger business foundation.
SeafoodSource: Looking at the salmon category, what are the top one or two issues facing this sector of the industry and what are some of the solutions you would offer to address those issues?
Chen: Although there are cyclical trends, salmon harvest yields vary on an annual basis. Varying tonnage of pink, keta and sockeye affect raw material costs and subsequently are directly related to the retail pricing for the following year. These fluctuations directly affect sales. To address swinging costs of annual raw materials from year to year, both retailers and manufacturers must be flexible enough to affect changes in spec and sizes to keep retails attractive for their respective customers.
Additionally, the salmon industry is fighting continuing pressure from other species as the frozen seafood is further segmented. Ongoing strength of shrimp, tilapia, cod and swai sales further split available shelf space. Key to keeping salmon in a proportional display position is to reinvent the species through products that further promote excitement, newness and repeat purchase.
SeafoodSource: If there were one thing you could change about the seafood industry as a whole, especially as it relates to your ability to run a successful business, what would it be?
Chen: I would like to see the industry focus on leveling some of the seasonality that currently exists. A stronger push for April-August summer grilling promotions and November-December holiday promotions will help to offset the current and dominant volume that is driven January through March during the Lenten season. Driving a disproportional amount of annual business in the first quarter of each year puts additional financial cash-flow pressure on manufacturers and requires strong planning to purchase raw materials, produce inventory and distribute six months in advance of turning this back into working capital.
SeafoodSource: Given the opportunity to address a room filled with seafood industry leaders such as yourself, what is the one nugget of wisdom you would offer them as your closing remark?
Chen: Price, service and quality are givens with all retailers today. You must find the degree of separation that makes you most desirable.
