RETAILERS MUST GO ABROAD FOR SEAFOOD SUPPLIES: EXPERT

PAMELA BLAMEY

BOSTON -- Sourcing seafood for supermarkets is rapidly becoming an international game, and that foreign influence is going to be a guiding force for seafood sales growth in the supermarket, according to Mike Kennally, vice president of seafood for The Golub Corp., Schenectady, N.Y.

"I believe that in the next century, our seafood buyers are going to have to get closer to the processor overseas," Kennally told attendees at the leadership summit of the International Seafood Show here.

He advocated greater understanding between retailers and overseas processors.

"We're going to have to reduce the gap, learn a little bit more about how to do business with those folks. As I see it, getting into the year 2000 the seafood supply is not local anymore -- today we buy and sell products from all over the world."

As campaigns to increase seafood consumption succeed, the multinational nature of the seafood business will grow in importance, and the inadequacy of local resources will come to light, he explained.

"Locally, overfishing, poor supply, mismanagement of resources have affected dramatically the quality and quantity of product we buy. Market share has been taken away from this country and increased or expanded in countries all around us," Kennally said.

"We do business with Chile for swordfish and salmon, with Asian countries for all sorts of new product. Everyone likes to talk about growth and consumption, but if consumption stays the same, in the year 2000 we're going to have to harvest an additional 600 million pounds of fish.

"Increases for much of the demand are going to be coming from imports from countries who have already gained tremendous market share. Foreign processors are more aggressively seeking the supermarket people who are going to be selling directly to the end user. We feel that the competition is going to be very intensive."

However, this particular trend is going to raise some issues about product standards, Kennally acknowledged. "Quality, quantity and price are going to have some high risk factors when we start doing business with processors overseas." Knowing the suppliers well is the only way of achieving reliable quality, and the only way to know them well is to go where they are and eliminate the middle men, Kennally advised.

"Importers can be very good for us, but they might in some instances use different packers, and if they do that, how do you control the standard of quality?

"Processors are looking to gain control of their products and markets, and I think the supermarket retailers have a great deal to gain from that scenario.

"We think [traveling to other countries to develop new sources] has helped us manage and improve key segments of our business -- it helps later when you're talking to these folks who are maybe 7,000 miles away -- and you have the opportunity to look at their plants and inspect them and find out about safety standards."

Kennally suggested an action plan for retail seafood buyers. "Get out of the office, get that passport updated and go see what the rest of the world has to offer. That kind of dedication has proved very successful for us, and we've had wonderful success with selling seafood in the supermarket."

He also suggested some ways in which seafood at retail can become a stronger competitor with other protein sources, starting with value/price comparisons.

"Most meats are about 8% more expensive than they were last year, so we're trying to make seafood a value, get children and parents to start eating fish and to eat more of it.

"We really believe in sampling and demonstrating -- very rarely do you ever see kids refuse it," he said.

Seafood also needs to become part of the value-added trend, Kennally said. "Beef is at the peak of an 11-year production cycle, and they're dealing with that by expanding into value-added like you've never seen before."