Coronavirus-hit to restaurant trade causes business pivot for kingfish specialist Clean Seas
Coronavirus has impacted trade across the globe, with restaurants being some of the hardest hit. This has resulted in a significant impact, and a new way of doing business, for one SA seafood company.
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Aquaculture business and kingfish specialist Clean Seas has taken a major hit due to the coronavirus crisis, with sales revenue down 14 per cent in the March quarter, but the company is pivoting to take advantage of new opportunities.
Managing director and chief executive David Head said Clean Seas was looking at the impact of coronavirus as an “opportunity to redesign our future”.
“We’re very optimistic that when we emerge from the coronavirus crisis, Clean Seas will have a very interesting business model combining very strong service to the restaurant trade but also going into retail around the world,” he said.
Until COVID-19 hit, Clean Seas’ business model was based around the restaurant trade, selling into high-end establishments across the globe.
But with the worldwide restaurant trade crippled by coronavirus, the company has had to look at new ways of doing business.
“Our traditional business model helped us attract some of the best pricing we could get,” Mr Head said.
“But the closure of restaurants has brought about a very sharp review of our strategy.
“We realised the retail market is continuing on strongly, so we needed to pivot to retail.”
Clean Seas has begun a strategic pivot to access retail product channels, assisted by a relationship with the Norwegian Hofseth Group.
“Hofseth is a well-established Norwegian company that started off as salmon processors and integrated backwards to salmon farming,” Mr Head said.
Under an agreement reached with the group, Cleans Seas intends to leverage Hofseth’s global distributor network into retail channels, particularly in North America and Asia.
Hofseth has already set up product trials of Clean Seas kingfish with a North American retail chain.
Clean Seas’ entire North American frozen inventory – accounting for 116 tonnes of product – has also been purchased by Hofseth.
Mr Head said this pivot into the retail sector would mean an upgrade to the company’s Adelaide processing facilities would be needed, which could result in an extra 20 to 25 jobs for South Australia.
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The company has approached the state government for support in funding the facility upgrades.
Mr Head said cutting-edge freezing technology employed by Clean Seas should put the company in good stead with consumers, with recent blind taste testing undertaking in Sydney showing six out of the seven tasters preferred Clean Seas’ frozen product over a fresh product.
A benefit of the frozen product is that it can be shipped around the world for under 50 cents a kilogram.
Mr Head said trying to get product out by air was very expensive at the moment, and it was hard to even source planes to get the product out, so shipping was a much more viable option.