ANCHORAGE, Alaska — Alaska’s smallest community development quota (CDQ) group is trying to do several things at once in order to shore up the fortunes of its Kent, Washington-based value-added processor Cannon Fish: a rebranding, improvements to efficiency and the targeting of niche markets with new products.
And Larry Cotter, the CEO of Cannon’s majority owner, the Alaska Pribilof Island Community Development Association (Apicda), has some new help in the form of veteran plant manager, Bob O’Bryant who joined Cannon as its CEO in May, and the resources of Seattle-based Trident Seafoods, which recently invested in Cannon and Apicda’s False Pass plant.
Cotter told Undercurrent News that despite some tough times with Cannon, he’s excited about the firm’s future, particularly with the possibility of producing ready-meals and products under a new “Apicda-ized” brand identity, which highlights the group’s unique story.
“We haven’t seen a whole lot of success with Cannon, to be candid. We’ve made some mistakes there, we’ve had to learn. And it’s been expensive,” Cotter said. “But we think we’ve just kind of figured it out. You’ve really got to manage to the penny, to the fraction of the penny so control over your process is absolutely critical.”
Focusing on production of new products, Cotter said, will bring production efficiency.
“If you look at value-added production and that type of thing, you really don’t want to keep changing what you’re doing,” he said. “You don’t want to operate your line on one item for two hours and then shut the line down and change it around and do something else for two hours. You want that line doing the same thing 12 hours a day, over and over and over.”
Apicda bought Cannon in 2013, giving the group “a sales force to market seafood sourced from the Aleutians to the whole world,” Cotter wrote in Apicda’s annual report that year.
At that time, Cannon, an importer, processor and distributor focused on US Pacific Northwest seafood as well as “exotics” such as tuna, mahi mahi and swordfish sourced from Asia, did not have its own processing plant.
Apicda funded the construction of a new 30,000-square-foot processing facility in Kent for Cannon. That plant, the group said, would be a “game changer” that allowed further for further vertical integration with the Aleutian primary processing operations.
But according to Apicda’s 2015 annual report, Cannon lost money that year, contributing to a combined $1m loss for the company along with Apicda’s vessels and tourism operations. Cannon’s contribution to that loss wasn’t specified.
“Trident has done more to lift the pollock market than any other company in the world. They’ve done more product development than any other company in the world. Frankly everybody in this industry, like Trident or not, walks under their umbrella. They’re the guys in the room fighting the battle. I trust them and I believe in them,” Larry Cotter
Cannon has since seen a change in management with its CEO since 2013, Pat Rogan, leaving in June 2017, replaced by O’Bryant, a veteran of Bornstein Seafood and Pacific Seafood Group.
Cannon’s product offerings may change.
“The next part of the process — there’s several parts to it — but the next part is to move to table-ready products. We need to produce that at our own facility at Cannon ideally using products that we produce ourselves so we’re vertically integrating in that direction,” Cotter said.
A new brand is underway, Apicda has some names in mind, though Cotter declined to give further detail.
“We’ve been working on branding for a couple of years now. We’ve really come a long, long ways. We really think we’re at a point where it’s a couple of months and we could launch,” Cotter said.
He added that despite some tough times, he’s optimistic about Cannon’s prospects.
“We’ve got good management at the plant now. We’re very happy with the skill level that we have and the sense of detail,” he said, adding that Apicda aims to take advantage of Trident’s experience in value-added production and product development.
“Certainly they have a great deal of expertise and knowledge that we don’t have. We may have ideas that they don’t have. Just sense of scale has a way of heightening intellectual levels of whatever. So I’m looking forward to it quite frankly. We’re excited,” he said.
Apicda’s partnership with Trident does not extend to sales.
“Trident has its own markets. Their sales people are interested in preserving their markets; they’re not interested, and properly so, in turning them over to us. We get that,” he said.
Apicda has two opportunities that aren’t available to Trident, Cotter added. The first is Apicda’s ability — given that it serves seven remote communities in the Aleutian Islands mainly populated by Alaska Natives — to qualify under the Small Business Administration’s 8A Business Development Program aimed at “small, disadvantaged” firms.
Those firms can receive preferences in the awarding process for government contracts.
Additionally, Apicda also can position itself as a Minority Business Enterprise, a designation that could help it to win contracts from large private sector retailers, some of which require that a portion of their sourcing comes from minority-owned firms as a corporate social responsibility measure.
Apicda has long partnered with Trident on pollock harvesting, and Cotter said he values their perspective on what has been a tough market.
“I remember five years ago when we were told by Trident that the whitefish market is about to go into the toilet and that you better hold on and that it’s probably going to last about four years,” he said. “And they were right except it’s lasted five years. They believe now that that market is shifting. And it may shift dramatically starting in the next year.”
Trident’s own efforts with pollock have helped the sector, Cotter said.
“Trident has done more to lift the pollock market than any other company in the world. They’ve done more product development than any other company in the world. Frankly everybody in this industry, like trident or not, walks under their umbrella,” he said. “They’re the guys in the room fighting the battle. I trust them and I believe in them.”