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No fish tale: Pacific Seafood hooks growth opportunities
Wendy Culverwell,
Portland Business Journal
September 19, 2008
President and CEO Frank Dulcich has grown his family-owned company,
Clackamas-based Pacific Seafood Group, by modernizing technology and
acquiring other companies.
One of Oregon’s largest privately held companies traces its rise to
the 1982-1983 El Niño weather phenomenon that warmed oceans,
curtailed fish harvests and devastated the fishing industry.
Pacific Seafood Group, a third-generation family business with
corporate headquarters in Clackamas, lost 70 percent of its suppliers
to El Niño. A competitor offered to buy its distribution network with
the goal of putting Pacific Seafood out of business.
For the Dulcich family, which owns the company, it was decision time:
Sell, keep going or adapt?
It elected to adapt. Instead of selling to a competitor in a down
market, it recast itself as a buyer. Its first purchase was a bankrupt
fish processing plant in Warrenton that came with a $5,000 monthly
mortgage payment, twice the company’s monthly operating revenue of
$2,500.
“We bet the company,” said Frank Dulcich, Pacific Seafood
president and chief executive officer.
As a growth strategy, acquiring seafood-related businesses has paid
off handsomely.
Today, Pacific Seafood owns 40 companies and operates 36 processing
and distribution facilities from Alaska to Mexico. Its varied
interests give it control over every aspect of fish processing, from
harvest to plate, or, in the parlance of the seafood industry, from
“boat to throat.”
In 2007, Seafood Business magazine named Pacific Seafood Group one of
the largest fish processing businesses in the United States based on
2005 revenue of $874 million. The company’s 12,000 customers are
evenly split between major food retailers and restaurants, including
Portland-based McCormick & Schick’s Seafood Restaurants Inc.
After Seafood Business published its sales figures, Pacific Seafood
stopped disclosing them. Dulcich said the company’s size brought
unwanted attention. Even now, he prefers only to say that the company
is growing at an annual rate of 15 percent.
Still, it ranks among the top five seafood businesses in the nation,
said Steve Hedlund, an editor with Seafood Business magazine, based in
Portland, Maine. Hedlund compiles the magazine’s annual list of the
nation’s 25 largest seafood businesses.
In an industry known for consolidation and vertical integration,
Pacific Seafood also is the dominant seafood processor and supplier in
the Northwest. It operates under a variety of names, including Bandon
Pacific Inc., Pacific Choice Seafoods, Jake’s Famous Crawfish &
Seafoods and Pacific Smoking Co., to name a few.
Hedlund said Pacific Seafood has grown by making strategic
acquisitions and by expanding its own operations. With a 15 percent
annual growth rate, it isn’t posting explosive growth, but Hedlund
said it has been a steady player for a long time.
Dulcich said that in addition to growing by acquiring seafood
businesses, Pacific Seafood succeeds by embracing modern technology.
That wasn’t the case two decades ago. Like its peers, Pacific
Seafood Group was a low-tech business with few computers in sight.
Fish were sold without being weighed and the industry ran on goodwill
among partners.
Dulcich set out to change that.
The result is a system that tracks every fish in its 36-hour trek from
boat to the store shelf or a restaurant plate. If a customer complains
that a product seems off, Pacific Seafood can instantaneously identify
the batch and, if necessary, order holds or recalls.
Jae Park, a professor at the Oregon State Seafood Laboratory and
founder of its Sashimi Institute, said Pacific Seafood is a leader in
seafood technology.
The company got a little bit larger this week when it closed on a
small acquisition, a steelhead farm in the Columbia River system
established by the Confederated Tribes of the Colville Reservation.
The tribe will operate the facility. Dulcich said Pacific Seafood
expects to quadruple production.
Hedlund, of Seafood Business magazine, said steelhead are a niche
product, but fish farming represents the industry’s future.
“Most of the growth in seafood volume will come from farms,” he
said, citing China and Southeast Asia as dominant players in
aquaculture.
In one regard, Pacific Seafood operates much the way it did when
Dulcich’s grandfather began the business in 1941 on a handshake. The
company buys about 90 species of fish from about 400 boats that ply
the Pacific Ocean. Most of them are independently owned and operated.
Not one has a written contract obligating it to bring its harvest to
Pacific Seafood.
“It’s your word that you’re going to take care of that
individual,” Dulcich said.
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