By Leo Ryan, AJOT
High Liner Foods Incorporated, a leading North American processor and marketer of frozen seafood products, has managed to ride the recession through increased sales and by closely monitoring costs of transportation of its various brands to retail and food service outlets in the United States and Canada.
A major participant in the Boston Seafood Show, High Liner is more than a century old and imports substantial volumes of seafood from some 20 countries. This seafood is transported on reefer containers across the Pacific or Atlantic oceans, depending on origin, to ports on the east and west coasts. For the United States, it mostly Boston, NY/NJ and Los Angeles. For Canada, it’s Vancouver and Halifax.
Then, total annual shipments of High Liner processed products to North American markets approach 175 million pounds – all by truck. The trucking is contracted out to truck firms and operators.
“One of our biggest transportation challenges is to minimize the less-than-truckload (LTL) shipments,” Kelly Nelson, vice-president corporate services and chief financial officer, told AJOT.
Within its freight-out budget, distribution expenses amount to about C$32 million, Nelson added.
Currently employing 1,100 people in Canada and the United States, publicly-traded High Liner recently reported annual sales of C$627.2 million in 2009, representing a 1.8% increase over 2008. Net income totaled C$19.7 million, up from C$14.2 million in 2008.
“Our sales are evenly divided between the US and Canada, with also a small volume in Mexico,” Nelson indicated.
The firm markets its products under the High Liner®, Fisher Boy®, FPI®, Mirabel®. Sea Cuisine® and Royal Sea® brands to most big retail chain and club stores in North America and to restaurants and institutions for food service throughout the continent.
The enterprise was created in 1899 through the founding of W.C. Smith Company, a small salt fish operation located in Lunenburg, Nova Scotia – the current home of head office and one of the most modern and diversified food processing plants in the world. Late in 2007, the company acquired the North American marketing and manufacturing business of Fishery Products International (FPI).
In North America, High Liner Foods conducts business through two operating companies in Canada and the United States.
In Canada, High Liner Foods Inc., based in Concord, Ontario, focuses on serving the Canadian retail and food service markets. The Lunenburg and Burin, Newfoundland secondary processing plants complete the Canadian operations.
In the United States, High Liner Foods is headquartered in Danvers, Massachusetts. The latter oversees all frozen seafood production and distribution throughout the United States.
The US Food Service division operates as Fishery Products International. Plants in Portsmouth, New Hampshire and Danvers produce a wide variety of value-added seafood products.
Commenting on the fiscal 2009 financial results, Henry Demone, president and CEO of High Liner, said: “Despite the difficult economic environment, 2009 was another strong, successful year for High Liner. We continued to execute against well-defined business objectives throughout the year and we were profitable in all key sales channels.”
Within the context of the economic downturn, however, sales of higher-priced, but lower margin, crab and lobster were markedly lower in the US and Canadian food service channels.
On the outlook for 2010, Demone is optimistic that it will be another strong year for the company. “We continue to see lower raw material costs and a strengthening of the Canadian dollar, both of which benefit our business.
“Our well-diversified offering of value and premium products continue to be a strength, as many consumers are still looking for value, as well as quality. Price decreases in commodity products along with greater promotional activity on value-added products should drive volume growth going forward.”
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