SAN FRANCISCO, US — US processor Santa Monica Seafood has started up chilled skin-pack production for two US retailers, after doubling the capacity of its Rancho Dominguez, California plant to 120,000 square feet.
The company expanded the Rancho plant as part of a $17 million investment program over the past 20 months, CEO Roger O’Brien told Undercurrent News, during the recent Global Seafood Marketing Conference in San Fransisco, California.
“We also added processing rooms, a lot of additional receiving and shipping dock doors, and equipment. One of our big efforts last year was adding a skin-pack packaging line, which is a big retail trend now,” he said. “It’s huge in Europe, but retailers here are quickly catching onto it.”
The company also has a modified atmosphere packaging (MAP) line in the plant, he said. “We have both a MAP line and a skin-pack line and that was a huge growth factor for us last year. We expect it to be an even bigger growth area this year.”
MAP and skin-pack are still small, overall, he said.
“We have had MAP for five years. Skin-pack, we just started with a couple of major retailers. I don’t have volume numbers, but it is growing fast.”
O’Brien declined to name the retailers which Santa Monica is supplying. He did, however, comment generally.
“Whole Foods is getting into it [skin-pack], with their 365 stores. Walmart is getting into it. Once the big boys start playing, the little guys start following,” he said.
The main species used in MAP and skin-pack are salmon, tilapia and tuna.
Although 25% of the company’s sales — thought to be as much as $400m — come from retail, it’s growing fast.
“We started in foodservice and we have been into retail for five years now. Foodservice is still our bread and butter, but retail is growing,” O’Brien told Undercurrent.
With the expansion of the Rancho plant and the 2014 acquisition of American Fish & Seafood, as well as other businesses that made up the seafood division of Prospect Enterprises, the company now has 200,000sq. feet of plant space.
American Fish had five operating locations.
At the start of 2016, Santa Monica closed the former American Fish Sacramento facility. “The seller owned the facility and we agreed to lease it when we closed the deal in July 2015 but with an option to terminate the lease after six months, which we did,” said O’Brien.
“However, we continued servicing the northern California customers out of our Rancho Dominguez facility, along with the assistance of outside carriers,” he said.
Santa Monica took on one of American Fish’s two Los Angeles plants, but didn’t lease the other.
“We immediately, at the closing, took their downtown LA facility employees, inventory and equipment over to our Rancho Dominguez facility, since their LA facility was only about 20 miles away,” he said.
“The seller owned its downtown LA facility and continued using it for another business segment (not seafood) they retained. However, we did lease the sellers’ LA fish facility, which is also in downtown LA; we still operate it,” said O’Brien.
With the American Fish deal, Santa Monica acquired some non-seafood center of the plate product lines, with beef, pork and chicken.
This has brought some challenges, he said.
“It’s tough getting your seafood sales reps to buy into selling beef, chicken and pork. There is so much to know about seafood to be a seafood expert that it’s hard being a beef, chicken and pork expert as well,” said O’Brien.
“On one level, we have a strong distribution channel that can handle various products, so it makes sense [to sell other proteins]. But, our top level people are seafood people, they really aren’t anxious to support beef and chicken. You have to have the support at the top,” he said.
Source: Undercurrent News