Scope #04

North Pacific Seafoods

Delivering Alaska Wild Fish to Dinner Tables Across the Globe
North Pacific Seafoods’ longtime commitment to sustainability of the environment, business, and people

The captain of the purse-seine fishing vessel sends a signal to the crew member, who has been waiting in the small boat, ready to do his job. His boat begins to travel in a large circle, pulling the net from the vessel. After 15 minutes or so, other crew members draw together the bottom of the net. Beneath the water, a school of pink salmon returning to the streams of Kitoi Bay, Afognak Island, after living in the ocean for 18 months, is caught in a “purse.”


Less than 10 hours later, the fish are being processed at the North Pacific Seafoods’ plant in Kodiak. While automated machines are removing the heads and guts of the fish, well-trained workers are doing meticulous cleaning and sorting by hand. While some products go to the freezer, others are made ready for shipment. Within a few days, the company’s fresh salmon products will be grilled or sautéed, to be served as dinner.


According to a study released in July 2016 by the United Nations Food and Agriculture Organization, global per capita fish consumption has risen to above 20 kilograms a year for the first time. The United States, one of the world’s biggest meat-eating capitals, is no exception; its fish consumption has continued to increase as people become more health conscious.

Salmon products have also taken on a whole new dimension. In the days before there were freezing facilities canned salmon was common, but now that freezing technologies are established and air transport is possible, a variety of products such as fillets, H&G (headed and gutted), and fresh are available. The delicious taste and style of eating salmon is spreading within the US market. Canned salmon is seen as an ingredient for salad or casserole, and dishes made from fresh or frozen salmon take center stage on the plate.

“The retailers have been very successful in promoting the beauty of eating ‘seasonal salmon’ that is fresh-to-market,” said Eisuke Yazawa, the vice president, and a longtime seafood specialist, who joined North Pacific Seafoods (“North Pacific”) more than two decades ago. He said the first Alaskan sockeye salmon of the season, which appears in May with good fat content, is now transported by air to Seattle and other cities to be sold fresh at a high price.

With its headquarters in Seattle, North Pacific produces a wide range of Alaska seafood for both domestic and international markets. Since its establishment in 1972 as a wholly-owned subsidiary of Marubeni Corporation, North Pacific has expanded its production capacities while diversifying its seafood species, product forms, and markets. The company now boasts a 10 percent market share in Alaska seafood.

With the recent acquisition of two plants, North Pacific has seven shore-based processing plants in the key harvesting areas of Alaska, including Kodiak. The Kodiak plant operates year round because it processes diverse species. While its winter components vary from pollock, and cod, to crab, its production during the busy summer months revolves around salmon.


North Pacific also created the Kodiak Fishmeal Company (KFC) in 1995 jointly with other processers. The byproducts of seafood processing at the Kodiak plant are immediately sent to KFC to be converted into fish oil and fishmeal for use in aquaculture, livestock farming, and agriculture.

A step back from the abyss: How Alaska salmon returned after being overfished

Global salmon consumption has tripled since 1980, thanks in large part to the rapid growth of salmon aquaculture, which now accounts for 70 percent of the market. While Norway and Chile remain top producers of farmed salmon, the U.S., Japan, Russia, and Canada continue to harvest wild salmon.

“The Alaska fishery is one of the best managed in the world,” said Dr. Quentin Fong, a seafood marketing specialist at University of Alaska Fairbanks, Kodiak Seafood and Marine Science Center. In Alaska, fishery resources are managed by two bodies, the state government and the federal government. The fundamental principle of the two governments is to make sure that there is sufficient fish left in the ocean for spawning to regenerate.


Sustainable fisheries are stringently practiced based on the scientific monitoring of the ecosystem in Alaskan waters. As the farming of finfish is banned, all of the Alaska fish is wild caught. They are harvested in pristine waters, where there is very little pollution. “All of the fish in the Gulf of Alaska is considered as not overfished at all. So, because of that, sustainability itself is a marketing tool that gives Alaska a competitive edge,” Dr. Fong said.

Alaska’s fisheries provide more than half the volume of fish landings in the United States today, but Alaska went through very difficult times after salmon stocks had been exploited in the first half of the 20th century as a result of the continuous expansion of commercial fishing. After Alaska became a U.S. state in 1959, multiple measures were put in place to rebuild the salmon biomass, at both the national and the state level.


One was the Magnuson-Stevens Fishery Conservation and Management Act, which was enacted in 1976 as the primary law governing management of fishery resources in U.S. federal waters. The law extended the federal jurisdiction to 200 miles offshore, and this resulted in the termination of fishing in the high seas, especially by foreign fleets. Until they became properly regulated, high seas fisheries had continued to affect salmon populations because people caught anything in large volumes without discriminating about which salmon were returning to Alaskan waters.

In addition to the regulations that had already been in place—when and where harvesting could take place, what type of gear they could use—the Alaska state government limited the number of boats that could fish salmon. It also created the Alaska Salmon Enhancement Program to help nature rebuild its runs. Hatcheries, which play a key role in the program, help increase returns of salmon through the incubation, rearing and releasing of fry.

“We now have had, for the last 10 years, the largest average sustained catch of salmon in Alaska of any other 10 years period in history,” said John Garner, the president of North Pacific Seafoods. Born and raised in Alaska, Garner started commercial fishing at the age of 13 and has been in the seafood processing business since 1981, when he started a processing company with his fellow fishermen.

“Fish first”

As it is the iconic species for Alaska, salmon is the business driver of North Pacific. Salmon is the largest product by value, typically accounting for more than 50 percent of the company’s annual sales. But Garner said the salmon fisheries are more difficult to manage than quota managed fisheries, such as pollock and cod. Unlike the fisheries of these species whose stocks can be measured by the use of acoustic technology, there is no way to measure the salmon biomass in the ocean; they are moving around and they don’t travel in big schools. The state biologists can only start working when the first fish comes to shore. They use various inputs for making decisions on salmon management: what time and where they can be caught, when fishing has to be closed. If the salmon that are returning are fewer in number, there will be a sorter fishing season.


Processers like North Pacific, however, have to hire all the support vessels and process workers that they need before the first fish shows up. “You have to go to Alaska, prepared, for whatever is coming at you,” Garner said. Some of the company’s plants are situated in highly remote areas where 85 percent of the salmon run is caught in less than two weeks. “Those kinds of operations are different than the operations where you have the opportunity to resupply and react to what is going on,” he continued. “That is why, for North Pacific, what is the most important thing we have is our people. We have people with years of experience in these kinds of activities.”

Building long-term relationships with fishermen

Among them, Matt Moir, the general manager of the Kodiak plant, has been working at this factory since 1987. Moir was born in Iowa and raised in Minnesota, but he fell in love with Alaska when he was visiting his great aunt and uncle in Kenai Peninsula after high school graduation. While studying natural sciences in college, he kept coming back every summer and worked at a processing plant to make money to pay his tuition. When he graduated from college, he decided to get a job in Alaska. He worked as a crew member of a crab fishing boat for a few years before he joined North Pacific.

“There are so many variables that we don’t know when the season opens,” Moir said. The “variables” include weather conditions, water temperatures, tides, the size of the catch, and the male-female ratio. “You can kind of predict, but you don’t know how all these variables will shake out.”


Harvesters and processors work around the clock—particularly so when salmon are in season. One of many responsibilities that Moir has is maintaining good relationships with fishing fleets. Each year, the Kodiak plant buys fish from some 170 vessels, and the fishermen are independent businessmen.

“Many of the fishermen, even if they know they are free to sell to someplace else, they choose to work with that processor because they’ve built that relationship over the years,” said Jay Stinson, a 45-year veteran fisherman. His 73-feet-long boat “Alaskan” is used to fish pollock, cod, and halibut, but it is too large to catch salmon. In the summer time, Stinson’s boat becomes a salmon tender, which buys fish from a harvester and delivers them to a processor.

While some fishermen tend to focus on negotiating the best immediate deal, Stinson likes the continuity and the depth of relationships that he feels in doing business with North Pacific. “There is understanding that we are all in this for the long haul, and that really adds to the level of continuity that doesn’t exist in some of the smaller companies,” he said.

Ensuring safety for all

What is equally essential for the success of North Pacific is having a good crew of fish processing workers at each plant. While some plants operate year round and their crew members come from their local communities, other plants operate for a limited period of time handling highly seasonal products and their crews are made up of seasonal workers, who come from the “lower 48” or other countries.

Ensuring that their workers are safe and their products are wholesome and of high quality is “part of who we are as a management team,” Moir said. North Pacific participates in several globally recognized audit programs including the Alaska Responsible Fisheries Management Program, Marine Stewardship Council Chain of Custody Standard, and British Retail Consortium Global Standards. These programs certify that the company meets best practices in food safety, food quality, resource sustainability, and workplace ethics.


“My mission is to provide a better experience for all of our longtime stakeholders: our customers both in the United States and around the world, our business partners, the local communities in Alaska and Seattle, and our employees,” said Kazuo Taguchi, the chairman of North Pacific Seafoods. “Sustainability goes beyond ensuring fishery resources. There is a sustainability aspect within all of our business. And people who have been with us for so many years are one of our greatest assets.

All information contained in this article is based on interviews conducted in August 2016.

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Mertens
Scope Index #05
MACFUND

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