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Marketing Strategy of Chicken of the Sea International
Marketing Strategy of Chicken of the Sea International - December 15th, 2010
Chicken of the Sea is a brand of canned tuna produced by a company owned by Thai Union International.
Founded: 1914 as Van Camp Seafood Company, Inc.
Sales: $297 million (1997 est.)
SICs: 2091 Canned & Cured Fish & Seafoods
Chicken of the Sea International is committed to leading the industry with safe, wholesome, nutritious and delicious products, including its well-known and extensive tuna product line and more than a dozen varieties of high-quality fish and shellfish.
Chicken of the Sea International is one of the leading canned seafood companies in the world and one of the largest in the United States. The company specializes in tuna products, but also markets more than a dozen varieties of high-quality fish and shellfish products. By 1998, tuna was the largest per capita consumption of all seafood products. Some of the company's product lines have included: Dolphin-safe and kosher-certified albacore tuna products like Solid White Albacore Packed in Spring Water; Chunk White Albacore Packed in Spring Water; Solid White Albacore Packed in Saturated Fat-Free Canola Oil; Very Low Sodium Albacore; and Low Sodium Albacore. Lightmeat tuna products from prime skipjack and yellowfin tuna, like Chunk Light in Spring Water; Chunk Light Tuna in Saturated Fat-Free Canola Oil; Solid Light in Olive Oil; Low Sodium Yellowfin Packed in Spring Water; and 50% Less Salt Chunk Light with Added Vegetable Broth. Other products include: Traditional Red Salmon and Traditional Pink Salmon; Skinless/Boneless Pink Salmon; crabmeat in an assortment of white, fancy, and lump styles; a variety of shrimp products, from tiny to small, medium, and regular domestic and international shrimp, both veined and deveined; mackerel; oval and tall sardines in an assortment of sauces and spring water; clams offered in minced, chopped, or whole styles; and oysters available in boiled and smoked-pack styles.
Out of the Blue: History, 1914-75
Van Camp Seafood Company, Inc. was founded back in the spring of 1914 when Frank Van Camp and his son, Gilbert, bought the California Tunny Canning Company to can albacore. Three years later, Van Camp Seafood Company became the first cannery to commercially pack yellowfin tuna. In the 1930s, Van Camp acquired its first two fishing vessels.
But the company did not attain household recognition until the late 1950s, when the company created the famous commercial jingle that goes, "Ask any mermaid you happen to see, who's the best tuna? Chicken of the Sea." The company created the mermaid as its mascot at the same time, and she has remained to this day as a food industry icon, along with the likes of The Pillsbury Doughboy, The Green Giant, and colleague Charlie Tuna.
In 1963, the company was sold to Missouri-based Ralston Purina, known primarily as a producer of processed foods, pet food, and livestock and poultry feeds. Ralston Purina built a cannery in San Diego, California, in 1975, following the closing of a plant in Los Angeles County.
During the three decades following World War II, southern California (including San Diego, Terminal Island, and Long Beach) became the world center for tuna, albacore, and bluefin processing and canning. By 1975, with The U.S. Tuna Foundation, Van Camp Seafood Co., Bumble Bee Seafoods, Pan Pacific Fisheries, and Mitsubishi Foods, among others, maintaining as many as 16 bustling canneries, employing more than 10,000 workers ranging from fishermen and cannery workers to administrators and dock workers, tuna sandwiches, tuna salads, and tuna casseroles became commonplace. By 1994, the number of industry workers in southern California had dropped to a mere 500. By 1976, the company was operating canneries in San Diego and Terminal Island, California, American Samoa (in the South Pacific), and Ponce, Puerto Rico.
Tuna is processed through a number of steps. First, fresh-caught tuna is frozen on the boat in brine at temperatures as low as 10 degrees Fahrenheit. Once at the cannery, the frozen tuna is thawed, which takes an hour or two. Next, it is butchered and gutted to remove the entrails. The gutted parts are ground up and used to make organic fertilizer. The butchered fish is steam cooked and then cooled. In the packing room, it is deboned. The head, tail, and fins are removed, as are its bones. The skin and red meat are also removed. The red meat is used to manufacture pet food, while the bony parts are ground up to make fish meal animal feed and fertilizer. What remains is a loin, or large, dressed piece of tuna, and flakes of tuna that have come off in the cleaning process. They are packed by an automatic filling machine into cans. The loin portions are used to pack chunk, or solid, tuna, while the flakes are used for lower grades of canned tuna. Salt and water or oil are added to the can. The can is sealed with lids in a vacuum process, then washed. The tuna is pasteurized and the can is heated with steam to kill bacteria, giving the can a shelf life of about five years. Finally, the cooled can is labeled and shipped.
A Fishy Situation: Fleeing from the West Coast, 1980s
In 1984, Ralston Purina gutted Van Camp's San Diego facilities, closing the cannery facility and moving it to the distant shores of American Samoa, in order to access the more inexpensive labor pool, and also to be closer to one of the richest fishing grounds in the world. Ralston Purina also moved Van Camp's main offices to St. Louis, Missouri.
It was only the beginning of a time of shake-up for the industry as, the following year, San Francisco-based Castle & Cooke Inc. sold its Bumble Bee Seafoods salmon and tuna cannery operations on Harbor Drive in San Diego to the division's four top managers for $73 million. Bumble Bee, one of Van Camp Seafood's primary competitors, eventually found its way into Thai hands, and reported revenues of $450 million in 1997 and, by then, maintained processing plants in Thailand, Puerto Rico, and Ecuador, as well as returning to southern California, with another facility in the city of Santa Fe Springs (which originally was a Bumble Bee facility owned by Unicord of Thailand).
In 1988, a group of private investors from Indonesia, called P. T. Mantrust Corporation, purchased Van Camp's from Ralston Purina in a highly leveraged transaction. The new owners planned to leverage their fishing fleet and expanded canning operation in Indonesia with Van Camp's American Samoa cannery and brand name to execute a fully integrated approach to supplying canned tuna to the United States. But, due to high interest rates in Indonesia, and its overly leveraged structure, P. T. Mantrust experienced cash flow difficulties and the primary creditor, The Prudential Life Insurance Company of America, became the majority owner.
Boycott for Dolphins, Early 1990s
In April 1990, the tuna industry was faced with a growing consumer boycott of canned tuna products when the public was made aware that over 100,000 dolphins died per year when they were caught by purse-seine methods, in which fishermen cast a large net around a school of tuna and then pull it taut like the drawstring of a purse. In response, the three largest sellers of canned tuna in the United States made a decision that they would no longer sell tuna caught by methods harmful to dolphins. Star-Kist Seafood, the world's largest tuna canner at the time, owned by food giant H. J. Heinz, led the way, followed by the two other major canners, Bumble Bee Seafoods and Van Camp Seafood.
In October of that year, Van Camp Seafood Co. moved its corporate headquarters and 115-member staff from St. Louis back to its home city of San Diego, into a 33,362-square-foot building in Chancellor Park, an office complex located in an area known as "The Golden Triangle."
Two years later, in December 1992, much of the company's senior hierarchy moved up. Dennis Mussell, who formerly worked for companies such as Ocean Garden Products and Mitsubishi Foods, was promoted to chief operating officer; J. Douglas Hines was promoted to senior vice-president of sales and marketing; and Don George was made senior vice-president for the newly formed logistics department.
In the summer of 1995, Pan Pacific Fisheries filed for bankruptcy, leaving more than $15 million in debts and nearly 700 people without jobs. The desperate move also meant the closing of the last full-service tuna processing plant in the continental United States, as it shut down operations at the last canning facility on Terminal Island. By this time, Star-Kist had moved their headquarters from its southern California location in Long Beach to distant Pennsylvania.
In 1996, consumer research group Leo J. Shapiro & Associates listed the Chicken of the Sea brand name as one of the top 10 consumer packaged goods in the United States.
Early that same year, Tri-Marine International Inc. of San Pedro, California, bought the half-century-old former Pan Pacific Fisheries plant on Cannery Street on Terminal Island, for $7.3 million, spending another $5 million to renovate the 10-acre complex and renaming the cannery Tri-Union Seafoods LLC. The facility was reopened in June of that year, and Tri-Union rehired nearly 300 of the old Pan Pacific workers, and another 400 workers were hired a few months later when the renovations were completed. A canning facility in the United States was back in business again. Thailand's Unicord also sold the Bumble Bee product line back to a group of U.S. investors and the canning facilities of Bumble Bee to Star-Kist. Meanwhile, total annual revenue for Van Camp in 1996 reached $440 million.
In October 1997, in a $97 million deal, Van Camp Seafood was saved from Chapter 11 bankruptcy as Tri-Union Seafoods LLC purchased the venerable canned seafood company, the third time it changed hands in its long history.
Tri-Union Seafoods LLC by that time was a conglomeration of several companies located throughout the world. The first, Bangkok-based Thai Union International Inc. [also known as Thai Union Frozen Products Public Co. Ltd., itself made up of Thai Union Frozen Products PCL, Songkla Canning PCL, and Thai Union Manufacturing Co. Ltd. (established in 1977)] was, at the time, the largest tuna packer in Asia and second largest in the world, with total annual sales exceeding $500 million in 1996, and 10,000 employees worldwide, producing over 600 metric tons of canned tuna, pouched tuna, frozen tuna loin, frozen shrimp, canned pet food, canned seafood, and canned salmon per day. The second, Tri-Marine International Inc., was one of the largest tuna traders in the world, with offices and subsidiaries in Europe, Japan, Singapore, the Solomon Islands, Taiwan, Thailand, South America, and the United States. Established in 1972, it had 1996 sales of $342 million on over 300,000 tons of products per year, including raw tuna, swordfish, salmon, shrimp, and squid. And the third was Ed Gann, a Rancho Santa Fe, California resident with more than 40 years experience in the fishing industry, and one of the world's most respected purse-seine tuna boat operators and owner of a company called Caribbean Marine, whose fleet consisted at the time of five fishing vessels with a total holding capacity of nearly 6,500 tons, producing an annual catch of nearly 40,000 tons of dolphin-safe tuna distributed to the United States, Central America, South America, Puerto Rico, and Europe. He had, at that point in his career, operated or owned more than 50 fishing vessels (Van Camp Seafood itself already contracted nine vessels).
Tri-Union Seafoods changed the name of Van Camp Seafood Co. Inc. to Chicken of the Sea International, adopting its brand name for the company, to help avoid confusion with Van de Kamp's Inc., located in St. Louis, best-known for their pork and beans, but who also manufactured a line of frozen breaded fish sticks. Chicken of the Sea International, under the direction of its new leadership, began aggressive marketing of its Chicken of the Sea family of products in retail, food service, and club stores. The new owners also left the Chicken of the Sea International main offices, and the staff of 2,200 people, located in San Diego.
Around the same time, Bumble Bee Seafoods Inc., yet another of the canned seafood companies which also had filed for Chapter 11, was acquired by International Home Foods Inc. for $163 million in cash and stock.
Also in 1997, Chicken of the Sea International launched its web site to respond to consumer inquiries about dolphin-safe tuna, overfished species, and requests for tuna recipes as well as allowing vendors to place orders via the site. The company also began a program attempting to increase sales of its non-tuna canned products such as shrimp, crab, clams, oysters, and sardines, since nearly 80 percent of the company's business was canned tuna. Total revenue for the company in 1997 reached $297 million.
By 1998, the company was the Port of San Diego's largest container customer, importing more than 700,000 cases of canned-food products monthly, sorted at Chicken of the Sea's 100,000-square-foot central warehouse facility at the 10th Avenue Marine Terminal, and the company's main markets were the United States and Israel, but it was looking to the Pacific Rim for expansion. At the same time, the tuna industry as a whole was searching for a "Got Milk?" type of campaign to help promote all tuna products.
Early that year, Chicken of the Sea International and Tri-Union International LLC merged into one company, still called Chicken of the Sea International. The company, which by this time operated canneries located in American Samoa and San Pedro, California, added additional processing capacity, allowing Chicken of the Sea to be a significant strategic partner by offering private label brands to selected customers, offering complete canned seafood selections (both branded and private label) to the retail, foodservice, club store, mass merchandiser, and the pharmaceutical trade customers, as well as a high grade, gourmet quality canned catfood for U.S. and export markets. As the 20th century drew to a close, Chicken of the Sea was running strong in the industry again.
Last edited by anjalicutek; December 15th, 2010 at 12:08 PM..
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