Could new High Liner CEO boost Atlantic demand?

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New CEO at giant Canadian seafood company High Liner Foods, comes from meat-packing industry, inherits Atlantic salmon asset

On Wednesday, High Liner Foods — arguably Canada’s largest seafood company with USD 1 billion in annual sales — announced they would replace chief exec Henry Demone with new, “meat-and-potatoes” CEO, Rod Hepponstall, now with Lamb-Weston.

Incoming High Liner Foods CEO, Rod Hepponstall

High Liner Foods generally sells wild caught pink and Pacific salmon products, including fillets, pies and marinades, however with catch sizes unpredictable, the thought is Hepponstall — formerly of potato processor, ConAgra Foods, and meat processor, Maple Leaf Foods — might be more inclined to regular supplies of salmon. And, regular, year-round supply is the specialty of salmon farmers.

In 2014 High Liner acquired Miami-based Atlantic Trading Company from one, Knut Skabo, who had, since 1984, helped build one of the largest US importers and wholesalers of frozen Atlantic salmon from Norway and Chile.

Atlantic Trading
Atlantic Trading’s revenues are upwards of USD 80 million annually, and at the time Mr. Demone said the acquisition of Atlantic would “more than double” group sales in salmon products and that he saw “the margins on Atlantic Trading products” becoming “comparable to those achieved on similar products sold by (High Liner)”.

Thirty-four years after its start-up, Atlantic Trading is still one of the largest distributors of frozen salmon products in the US, while still selling fresh salmon products to several U.S. wholesalers. When it bought the company, High Liner Foods did “not anticipate making any changes to the operations of Atlantic Trading following the acquisition”.

So, why has more Atlantic salmon not been sold as a High Liner brand? Perhaps, because Atlantic Trading already sells its frozen salmon products under the brand, C. Wirthy & Co., to a major club store and supercentre operator in the United States.

Henry Demone, High Liner Seafoods CEO, will take a seat on the High Liner board

Demone’s vision
And the High Liner brand is, for now, only about wild Pacific and pink.

Yet, Demone’s vision for Atlantic Trading’s salmon suggests vastly more Atlantic salmon might soon be required.

“Our vision is to be the leading frozen seafood supplier in North America and a key component of our strategy is to acquire profitable and complementary businesses like Atlantic Trading,” he said four years ago, adding, “Atlantic Trading sources some of the finest Atlantic salmon available today and will enhance product offerings to our customers.”

In his 2018 review of 2017 operations, Demone praised Atlantic salmon again, saying that the species, along with shrimp, were experiencing soaring demand.

Mr. Hepponstall, meanwhile, has 25 years of experience in retail and food service where steady supply is key. So, it’s conceivable the Lunenburg, Nova Scotia, company’s new CEO leans on what he knows, which is meat and potatoes, and then leans on Atlantic Trading to opt for regular tonnage like the US and Canadian agricultural production he’s used to.

Wild catch
There are two other, big reasons for him to think about sourcing more farmed Atlantic salmon: wildly unpredictable recent catches of wild pink and Pacific salmon and wild salmon fisheries closures along the California coast coupled with salmon-fishing bans in northwest North America and Eastern Canada.

“I look forward to working with the High Liner team to improve the business, create innovative products that help drive seafood consumption and deliver on a strategy that will create long-term value for our shareholders,” Hepponstall was quoted in a statement as saying.

Many hope he does just that.

For now, High Liner Foods is a 14.6-percent salmon company, but one rolling out a meal-ready salmon strip to be used as a protein option in pasta, salad or other meals.