Colin Macdonald, a co-founder and now Chairman of Clearwater Seafoods, has brought a global perspective to the fishing business they began in Nova Scotia in 1976.
Once a low-tech industry, things have changed in the fishing business. Captain’s logbooks have been replaced by notebook computers while global positioning systems both track the vessels and navigate over the ocean bottom.
Aside from the integration of technology and the diversity of products and markets, Clearwater also benefits from vertical integration. The company controls the process from harvesting to processing, and from marketing to delivery, which produces price efficiencies for both the company and its customers.
It is truly a global company. For many years it has been focusing on demand for premium shellfish and rising per capita consumption of sea food generally driven by consumers in emerging economies, especially in Asia. The company distributes its products worldwide, using local sales and marketing teams to position the company in both mature and emerging markets. It has sales offices in major centres in Canada, the United States, Europe, as well as four offices in China.
Fishing is subject to quotas, and thus the right of being allowed to harvest a certain amount of fish becomes a valuable property. For example, in 2003, Clearwater acquired the right to certain scallop quotas from High Liner Foods Inc. This increased Clearwater’s share of the Canadian sea scallop supply—called the total allowable catch, or TAC, from 36 percent to 50 percent. Quota ownership is a very important part of Clearwater’s competitive advantage. It owns between 50 and 100 percent of the supply (TAC) for sea scallops, offshore lobsters, cold water shrimps, arctic surf clams, Jonah crabs, and Argentine scallops. Owning such a high percentage of the fish quota allows the company to “control its own destiny” and ensures a consistent supply of product to customers. In 2012, an independent appraisal of the company’s fishing quotas placed a value of $453 million on these rights.
1. Are there other industries, either in Canada or other countries that have quota systems applied to their industry in a similar fashion as the fishing industry?
2. How can a company serving a global marketplace keep track of changing consumer preferences, which is particularly the case in the food industry?