In mid-October, American seafood giant Tri Marine announced the closure of its Samoa Tuna Processors, which processed and distributed “Product of the USA”-labeled tuna to private-label customers. Among a number of affecting factors, the most detrimental was the inability for consumers in the US to catch on with the responsibly raised product, as well as convincing them it was worth a premium.
Commenting on the closure, Litigation principal Gregory Morrow told Seafood Source, “For the average American consumer, tuna is tuna. It’s a commodity item. To get the consumer’s mind around applying the concept of higher quality and better standards that comes along with the ‘Made in America’ label to tuna was a big challenge to take on.”
On the difficulty of making a profit, Mr. Morrow said, “These private label food retailers are looking for high quality at the lowest possible price, and they’re very good at driving down prices. It puts so much pressure on suppliers like Tri Marine that their margins are very slim, and if they run into any kind of problem that results in even a slight increase in the price point of their product, it can create significant systemic challenges for their business model.”
In addition, Mr. Morrow noted that the timeframe of fewer than two years for the rollout of an ambitious agenda may have also contributed to the closure of the plant. This situation, however, was a combination of “thousands” of factors, not one isolated issue.
Mr. Morrow commented: “I have a great deal of respect for [Tri Marine CEO] Renato Corto’s strategic vision and business acumen, and Don Binotto certainly had background and experience in tuna industry that would have been effective. A company of Tri Marine’s standing would do everything they could to make it a successful investment and I’m sure they did. Unfortunately, every business suffers from ideas that fail from time to time. You can invest so much with a business development plan and execute it well and then find out your premise wasn’t accurate. Or, as I believe was the case in this situation, just suffer from bad timing or market forces beyond your control. However, whatever the cause or causes, there comes a point in time that you have to make a tough, rational judgment as to whether or not the plan you devised is working, and if it’s not, what you’re going to do about that.”