Canned and Cured Fish and Seafoods

SIC 2091

Industry report:

This category covers establishments primarily engaged in cooking and canning seafood products such as fish, shrimp, oysters, clams, and crab or in curing seafood products by means such as smoking, salting or drying. It also includes manufacturers of seafood soups, chowders, stews, broths, and juices. Establishments primarily engaged in preparing fresh fish or shucking and packing fresh oysters in unsealed containers are classified in SIC 2092: Prepared Fresh or Frozen Fish and Seafoods.

Industry Snapshot

The value of U.S. canned fish and seafood industry shipments was $1.2 billion in 2008; overall fresh and frozen seafood processing industries, of which this category is a part, were $8.2 billion. The industry enjoyed growth partly due to the high-protein, low-carbohydrate diet fads of the early-to-mid-2000s and partly due to the positive health news regarding Omega-3-rich seafood. On the downside, the industry continued to be plagued with negative news such as that involving overfishing and trapping of non-targeted species to the point of extinction, in addition to reports of high levels of pollutants found in some harvests, including methylmercury and lead.

The National Oceanic and Atmospheric Administration Fisheries Service reported that per capita consumption was about 15.8 pounds per person in 2009 with canned seafood, primarily tuna, responsible for 3.7 of those pounds. Furthermore, the decline in per capita consumption was largely the result of a decrease in canned seafood consumed.

Background and Development

Fish curing is one of the oldest industries in North America. Even before permanent European settlements had been established, fishermen were harvesting cod and other species off the northeastern coastline of the North American continent. Fish were preserved and prepared for marketing by salting. According to Roy E. Martin of the National Fisheries Institute, "As early as 1580 more than three hundred ships from Europe were salting cod in this area."

New England colonists depended on salted cod and smoked herring for food and as trade items. During the seventeenth and eighteenth centuries, cured fish products made major contributions to the economies of New England and eastern Canada. Disputes over fishing rights and restraints on trade contributed to the political climate leading up to the Revolutionary War. Martin, writing in The Seafood Industry, stated, "The English Parliament in 1775 prohibited the New England colonies from trading directly with foreign countries and prevented New England vessels from fishing on the banks off Newfoundland, in the Gulf of St. Lawrence, and on the coasts of Labrador and Nova Scotia where they had been accustomed to fishing. This restriction meant ruin to the New England fish-curing industry, and the edict was one cause of the Revolutionary War."

Another type of preservation, pickling, was also used commercially with fish and mollusk products through the 1800s. Pickled and cured fish products continued to be major industries until the processes were gradually supplanted by canning technology and by innovations enabling fresh and frozen seafood products to be delivered to inland markets.

During the early years of the nineteenth century, the first canned seafood products appeared in the United States. Initial offerings included salmon, lobsters, and oysters. Of these three, the most popular, and first to be canned on an industrial scale, was the Chesapeake Bay oyster. Canning technology enabled the sale of oysters to those living inland who had previously been unable to purchase them. As canning technology improved, other products were added to the menu. Sardines, for example, were first successfully canned in Maine around the middle of the nineteenth century. As more products became available, consumer acceptance increased. The Civil War also helped the new industry gain favor by introducing many soldiers to canned products.

The 1860s saw the beginning and rapid expansion of canning operations for Pacific salmon. From a small beginning in California, salmon canners spread north into Washington and Canada. The first canneries opened in Alaska in 1878. The 1870s also brought the first menhaden (a type of fish from the herring family) cannery. It opened on Long Island in 1872. Canned fish cakes (cod and haddock products) were introduced in 1878. By 1880, other canned items included mackerel, clams, and crabs. U.S. production of canned products in 1880 was valued at $15 million. Finnan haddie (smoked haddock) was first offered commercially in 1890. "Salad Fish," canned flaked meat from cod and haddock, was introduced in 1898. Other turn-of-the-century products included pickled sturgeon, carp, and shark meat.

During the early years of the twentieth century, the sardine canning industry moved from the East Coast to the West Coast. Canneries sprang up in the Monterey Bay area of California. As sardine canning operations expanded, demand for fish exceeded availability. To help increase catches, new fishing methods were developed using a special type of net, called a lampara net. Lampara nets encircled entire schools of fish and yielded large harvests. Canners also continued bringing new products to U.S. consumers. Other fish added during the early years of the twentieth century included shad, alewives (another member of the herring family), and tuna. The first commercial offering of tuna was in 1909 by the Southern California Fish Company. Only albacore tuna was used, and the first year's production equaled 2,000 cases.

In the following decade, many major participants in the U.S. canned and cured seafood industry were founded. Ocean Beauty Seafoods was founded in 1910, Ward's Cove Packing Company in 1912, and in 1914, Peter Pan Seafoods and Van Camp Seafoods were established. By 1915, only six years after the first commercial offering of albacore, California processors packed 237,265 cases. In the Monterey Bay area, the sardine cannery industry was well established and continued to grow. In 1918, nine sardine canning plants in Monterey packed a total of 1.4 million cases.

The 1920s were a time of expansion of Pacific mackerel canneries and increased activity in the Alaskan salmon industry. By the end of the decade, 159 canneries were operating in Alaska. Improvements in cold storage technology enabled canners to receive and process larger quantities of fish. Refined fishing techniques developed during the 1920s helped fishermen meet ever-growing demand. Purse seines, a type of large net closed by a drawstring-like apparatus, were capable of dropping to a depth of 100 feet and enclosing an area 100 feet across. New boats were built to operate hundreds of miles offshore and carry up to 150 tons of fish.

Catches of albacore, however, began to decrease during the 1920s and tuna canners consolidated. In 1926, albacore catches plummeted. Van Camp Seafood Company offered yellowfin tuna marketed as "Fancy Light Meat Tuna" as a substitute. Sardine catches continued in large numbers and canneries prospered through the 1930s and early 1940s. Owners expanded operations by adding fish by-products such as poultry and livestock feed, fertilizer, and fish oil to their product lines.

During World War II, the canning industry faced several challenges. Tuna boats were requisitioned by the Maritime Commission and by the U.S. Navy, primarily for use in delivering supplies. Fish harvests were reduced, as fishermen enlisted or were drafted into armed service. Antisubmarine efforts along the Pacific coast restricted fleet movement. Inside the canneries, labor shortages persisted, intensified by a government policy of moving Japanese workers to internment camps. Despite the problems, however, the war years proved to be profitable ones for tuna and other fish packers because of the heavy demand spurred by government requisitions for canned products to feed troops.

During the second half of the 1940s, sardine catches declined, forcing one cannery after another to close. By 1952, Monterey's sardine era had ended. Industry analysts have attributed the declining sardine catches to various causes including pollution, climate and current changes, natural fish cycles, and fished-out stocks. Although the 1950s saw the demise of many sardine canners, other segments of the industry prospered. Larger fishing boats traveled greater distances from shore, and some companies opened canneries in more distant locations. For example, in 1954, the Van Camp Seafood Company opened canning facilities in Pago Pago, Samoa. The plant received fish from Japan, Korea, and Taiwan. It employed 600 people and averaged 145 tons of production daily. The modernization of fishing techniques continued to improve catches. By 1961, most commercial fishing vessels shifted from hook-and-line gear to mechanized purse seining. By the 1980s, tuna fishermen were using seines measuring up to 4,800 feet by 702 feet that were capable of hauling 200-ton catches.

These large nets, however, drew criticism because the seines indiscriminately captured all fish swimming in a school. For reasons not completely understood, dolphins often schooled with yellow fin tuna, and reports of dolphin mortality increased. To help alleviate problems associated with dolphin mortality, the Marine Mammal Protection Act of 1972 banned imports of fish and fish products caught in ways that posed excessive risks to ocean mammals. This is under the umbrella of the federal government, the National Marine Fisheries Service, the National Oceanic and Atmospheric Administration, the U.S. Fish and Wildlife Service, and Animal and Plant Health Inspection Service. Another piece of legislation, the Boxer-Biden Dolphin Protection Consumer Information Act of 1991, was passed to govern the conditions under which fishing operations could operate if their products carried a "dolphin-safe" label. In 1990, three major U.S. tuna canners, H.J. Heinz (StarKist, sold in 2002 to Del Monte Foods Company), Bumble Bee Seafoods (its name changed to Bumble Bee Foods LLC in 2005, owned by Connor Bros. Income Fund), and Van Camp Seafood (Chicken of the Sea, acquired in 1997 by Thai Union International) promised to provide dolphin-safe tuna.

In 1997, Congress passed the International Dolphin Conservation Program Act. The act sought to regulate the tuna industry to protect dolphins, which were often injured or killed when ensnared in tuna nets. In January 2000, the U.S. government announced plans to enact new regulations to meet international standards for protecting dolphins in Pacific Ocean waters--these regulations were finalized by the National Marine Fisheries Service (NMFS) in 2004. The regulations put into practice a new dolphin-safe labeling system. The special labels could be applied to tuna products if no dolphins were harmed or killed when the tuna were caught. In addition, the regulations allowed for the import of tuna products into the United States if the tuna had been harvested within the confines of the Dolphin Conservation Program Act.

U.S. sales of canned fish and seafood were largely on the decline in the late 1990s and early 2000s. Per capita seafood consumption grew from 14.6 pounds per capita in 1997 to 14.8 pounds, largely due to record levels of shrimp consumption. Per capita consumption of cured fish products remained steady at 0.3 pounds per person annually, but consumption of canned fish dropped from 4.7 pounds in 2000 to 4.2 pounds in 2001. While salmon consumption increased from 0.3 to 0.4 pounds between 2000 and 2001, tuna consumption dropped from 3.5 pounds to 2.9 pounds. Record consumption levels for canned fish occurred in 1936, when consumption reached 5.8 pounds per person. Cured fish had a record year in 1990, when per capita consumption was four pounds.

The reason for the 17 percent drop in canned tuna consumption in 2001 was twofold: lower import levels and the closure of two U.S. tuna canning plants. The best year for canned tuna was 1990, when per capita consumption was 3.7 pounds.

Per the National Marine Fisheries Service (NMFS), the total amount of canned fishery products produced in 2006 for human consumption equaled nearly 721 million pounds for a value of $1.1 billion, up slightly from the 2004 total of $1.08 billion, though the weight produced was higher at 802 million pounds. This represented nearly 0.3 percent of the overall food manufacturing industry. For the larger seafood product preparation and packaging industry (including both the seafood canning and fresh and frozen seafood processing industries) shipments were valued at more than $10.1 billion in 2005, which represented an increase of 10 percent from 2004 ($9.21 billion). Per the U.S. Census, the number of establishments involved in processing increased to 136 in 2005 from 125 establishments in 2002; despite this, the number of employees in the industry dropped to 4,261 workers in 2005 from 4,990 workers in 2002.

Tuna accounted for about 64 percent of the total value produced in 2006. The pouch concept in packaging was more attractive to consumers, accounting for 10 percent of sales, as was the addition of pre-marinated products, such as StarKist's Tuna Creations. Meanwhile, in 2005, Bumble Bee Sensations debuted three new varieties of canned tuna (lemon and pepper, spicy Thai chile, and sun-dried tomato and basil). An article in 2007 by industry trade Seafood Business noted that the drop in canned tuna sales of about 10 percent since 2004 could be attributed to fears raised about the safety of tuna after a lawsuit was filed in California in June 2004.

At that time, the industry became embroiled in a class action lawsuit by the California attorney general involving canned tuna defendants StarKist, Bumble Bee, and Chicken of the Sea. The suit alleged that packaged tuna from the three companies exceeded the permissible level of methylmercury, thus requiring exposure warnings on the labels particularly for pregnant woman as reproductive risks were reported as well as an increase in the probability of cancer for all consumers. However, in 2006, the court decision was made that warning labels were not needed as the U.S. Food and Drug Administration (FDA) and Environmental Protection Agency (EPA) had already issued an advisory. Further, it was determined that mercury levels were in fact low in the canned tuna products and that posting warnings on tuna cans would needlessly drive down consumption. It was also noted that a national system of standards was needed to avoid similar suits in other states.

Current Conditions

For 2009, the NMFS reported there were 621.7 million pounds of canned fishery products produced for human consumption; total value was $1.2 billion. Of that total, canned salmon was responsible for 141.9 million pounds, up compared to the 123.9 million pounds in 2008. Canned tuna production fell 104.2 million pounds to 369.7 million pounds; albacore tuna accounted for 162.9 million pounds or 44 percent. The balance, referred to as "lightmeat tuna," shipped 206.8 million pounds.

Elsewhere, the industry shipped 100.4 million pounds of canned clams, valued at $88.6 million. The whole and minced clam category produced 23.3 million pounds totaling $88.6 million. Clam chowder, including juice production, comprised the bulk, totaling 77 million pounds.

While branded label canned seafood dominated the market on the retail level, a rough economy was driving private-label sales upward in 2008 and 2009. In fact, private-label canned sardine sales grew 86 percent in 2009, to $2.9 million, and unit sales increased 71.6 percent to about 3.3 million across all food retail, excluding Walmart. Sales of canned private-label salmon increased 34.6 percent to 24.7 million, while unit sales rose 15.4 percent to 10.7 million, and canned tuna sales jumped 17.5 percent, to an estimated $226 million. Whether it was cans, pouches, cups, or boxes, private-label canned tuna volume rose 10.6 percent to 258 million units.

Industry Leaders

One of the largest companies involved in canning and curing fish and seafood products was Trident Seafoods Corp. Trident, a privately owned company headquartered in Seattle, Washington, was founded in 1973. Trident operated as a vertically integrated harvesting, processing, and marketing company including 11 processing plants--six in Alaska, four in Washington State, and one in Oregon. According to Hoover's, Trident had 2007 sales of more than $256 million with about 2,510 employees. Trident's canned salmon was offered under several brands, including Faust, Prelate, Rubinstein's, Sea Alaska, Tulip, and Whitney's.

In the late 2000s, Bumble Bee Foods, LLC reported revenues of $900 million with 500 employees. Del Monte Foods Company sold its seafood business, including StarKist, to Korea's Dongwon Industries for a reported $363 million in 2008. At that time, StarKist dominated the domestic tuna market by an estimated 37 percent. While the acquisition would compliment Dongwon Industries engaged in tuna fishing, the shedding of StarKist would help boost Del Monte's bottom line. The company admitted that the rising expenditures as tuna became hard to come by helped with the decision to divest the brand. Chicken of the Sea, another leader, was owned by Thai Union International.

Workforce

According to the U.S. Department of Labor, only slight change in employment in the U.S. fish and seafood processing industry was expected through 2014, although the work performed was expected to shift with an increase of semiskilled workers for processing plants and a decrease in skilled workers for markets and other retail centers. The seafood product preparation and packaging industry employed 36,800 workers in the late 2000s.

America and the World

In the late 2000s, U.S. canned and cured fish and seafood exports totaled 166.9 million pounds valued at $274.7 million. Canned salmon led in exports with a reported 97.3 pounds valued at $191.1 million. Exported cured items totaled 5.1 million pounds valued at $15.5 million, while caviar and roe exports stood at 76.3 million pounds valued at $341.4 million. Imported tuna totaled 398.0 million pounds, a slight increase of 20.2 million pounds in 2008.

In 2009, major exporting countries of canned tuna, in descending order, were Thailand (55 percent); Philippines (16 percent); other (14 percent); Indonesia (eight percent); and Ecuador (seven percent).

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