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PROCESSORPROFILE: By Karen Petkau Ocean Master Foods Profits Through New Markets & Better Productivity When you think of a multi-million-dollar processing business in the West, the first thing that pops into most industry readers' heads is oil, but on the West Coast, the industry can get a little fishy. Ocean Master Foods International Ltd. has been around since 1998 as a value-added seafood company mainly specializing in various salmon products. From its Maple Ridge, B.C. processing facility, it has created a blooming seafood business that has taken its products across the Prairies and the Atlantic. Owners Chris Mydske and Mike Featherstone are past and current stakeholders in the West Coast commercial fishing industry, giving them an insight into the marketplace that has helped propel the business at a rate of 20-25 per cent, much of which in the past two years. “Experience is invaluable,” explained Mydske, OMF general manager and manager of sales. “You are able to understand how fish is caught, types of fish, area where the fish is from and characteristics of the fish caught there. You understand how to have the best possible quality fish from the harvest to the handling.” “My family has been involved in fishing since 1925, so it is something that keeps growing with you.” While OMF's processing facility is located in Maple Ridge, the company also works closely with another larger processor in Vancouver. “Ocean Master maintains a good relationship with other processors in our area,” Mydske said. “The attitude is to help each other while still being competitors. It is quite common to have fresh fish trucked from up coast and cross-docked at another company for pick-up.” OMF has two major brands operating from its processing facility, Lox Royale Processors and the Royal Pacific Brand. “OMF is actually the processing company and the factory,” Mydske noted. “Lox is our top-of-the-line brand of OMF, but it only encompasses smoked products. With Lox, all we process is wild fish. In B.C., there is a big controversy underway about fish farms. All of our groceries here in our marketplace have got on the kick and are refusing to have farmed fish.” Instead, the grocers only take wild fish, which through Lox, OMF can supply. In other markets, however, OMF can sell its farmed fish, along with the wild, by using the Royal Pacific Brand of its processing facility. “There are a couple of things (the anti-fish farm advocates) take issue with fish farms, but mostly it involves the environment where the fish are raised - the pens and close quarters,” he explained, adding west of B.C. it isn't as controversial and the fish farmed products have a marketplace. OMF's annual sales are upwards of $3 million, with 40 per cent being sold in B.C., 40 per cent in other Western provinces, including Ontario and 20 per cent in Western Europe. Most of the product processed at OMF occurs from August to September. During that brief two-month period, Mydske said most, if not all, the company's product line is developed. The wild fish run lasts from April to October. The rest of the year, OMF brings in aquaculture fillets to be processed. “Using modern fish processing technology, Ocean Master Foods produces a unique line of innovative and great-tasting products. The products contain Omega 3 oils, calcium, vitamins, minerals and other nutrients important for good health,” he explained. Together with company president Mike Featherstone, the duo has created a team that has also seen an 11 per cent employee growth rate, in addition to its increased presence in the marketplace. While Mydske looks after day-to-day operations and sales, Featherstone is in charge of the company's financial operations and some sales as well. Ocean Master processes a wide range of value-added products, seafood products and is continuously doing research and development to accommodate the ever-changing market place,” Mydske noted. “(We produce) such products as pure Atlantic salmon burgers, fresh hot smoked salmon nuggets, all types of smoked salmon and various minces.” OMF processes approximately 27 different products. The processing time for each depends on what is being run that day, Mydske added. “For example, sliced smoked lox is a lot more labour consuming than mince,” he said. “…If we do smoked salmon, than we can do about 2,000 pounds (a day), but because it is value-added, we are selling it at a higher profit than if we did 10-12,000 lb. of fillets.” Value-added processing involves three stages. In Stage 1, for example, Sockeye salmon may be dressed by having the head and stomach removed; selling at approximately $4.50/lb. In Stage 2, the salmon may be filleted; selling at $7.50/lb (wholesale). But in Stage 3, if the salmon is smoked, which takes more precise processing techniques, the value goes up, and so does the price; selling at $15-$17/lb. “Our plant is HACCP (Hazard Analysis Critical Control Points) approved,” Mydske explained. “This means we are regulated under very strict controls and guidelines from Canadian Food Inspection Agency; everything from our incoming raw material, packaging, cleaning material equipment etc.” “We have had to go through various levels of inspections. We are also required to keep monitoring records and verification of all processing. This I feel is a great way of keeping our industry standards to the highest level. By being a federally registered facility and having an approved HACCP plan, we have the privilege to export our products province and worldwide.” The distinction also means everything from plant construction to our ingredients and packaging materials must be approved. “Smoked salmon produced in a federal plant may be legally shipped outside the province of B.C. and even outside of Canada,” Mydske said. “Our market base was developed by cold sales calls, associations with distributors, tradeshows, etc. We have attended the European Seafood Exposition for the past four years, which has resulted in container sales to Europe.” The processing facility uses slicing machines, skinning machines, mixers, de-boners and cutters. It also has a smokehouse. “This equipment is supplied by a distributor locally but most is manufactured in Europe,” he said. “We at Ocean Master Foods will try to schedule our maintenance between shifts or on weekends if at all possible. We have experienced problems with machinery during production and we are lucky to have electricians and refrigeration companies on the 24-hour service.” As beef becomes more expensive, and North Americans become more adventuresome in their cuisine, many are turning to the oceans to supply them with the nutrients and variety they desire, Mydske noted. “And people are getting more into healthy eating. B.C. has had a niche in this market for years, because of its access to fresh fish. But 25 years ago, in Saskatchewan and Manitoba, and even in Alberta, you only saw fish sticks and those kinds of things in their stores. Now, people are more health conscious and they know the importance of Omega 3 oils and they are getting more adventuresome in their tastes.” “Just look at all the sushi places that have popped up in recent years. They are eating more fish, but they are also not eating traditional seafood; they are experimenting.” “Fish is becoming a far more popular retail product.” One of the challenges facing fish processors involves marketing these new products, Mydske noted. “We need to be able to develop packaging that is user friendly to the busy consumer who does not want all the fuss and bother associated with some seafood preparation,” he said. “Other problems are if we are dealing with wild salmon we need to layout our year's expenditure of money in one or two months to purchase enough raw materials for the entire year and also put into public cold storage at an added expense.” In order to combat these and other issues facing fish processors, OMF is working closely with packaging consultants on the newest trends. “We forecast quarterly on what we will need for the following year and do comparable market condition surveys in order for us to buy just enough fish and not carry over to the next year,” Mydske explained. Because of the uncertainty in wild fish supply, the future of the industry lies in more industry funding for management and research in improving this area, Mydske said. “This uncertainty can create an unstable business market. We are focused on high quality and on specializing in new markets, which requires better co-operation between fishermen, processors and end users,” he said. As a growing player in the fish processing industry, Mydske said OMF's future profit projections will be determined by its measures used to maintain margins, which is becoming tougher in today's marketplace. In addition, OMF is looking for profit growth through new markets and better productivity. Ocean Master Foods at a glance Key numbers: • Company divisions: OMF is the processing arm of the company that produces two brands of products: Lox Royale and Royal Pacific. Lox Royale uses only No. 1 grade wild salmon and fish, carefully caught and handled by highly trained professional fishers. The OMF team of smoke professionals process gourmet smoked fish products, using West Coast brine and a special blend of hardwoods. The Royal Pacific brand includes products from both wild and farmed salmon. These products are regular trimmed, quality processed and smoked. • Location: OMF's processing facility is located in Maple Ridge, B.C., but the company also works closely with another larger processor in Vancouver. • Products: OMF produces 27 products, with a daily production of 2,000-12,000 lb., depending on the value-added process. Key people • Owners: Chris Mydske (general manager, sales) and Mike Featherstone (president) • Owner background: Mydske has been involved in the B.C. seafood industry for 17 years, fished commercially for halibut, salmon, tuna and herring; worked in a management capacity of a company co-ordinating the company's roe herring fishery and has been heavily involved in all aspects in processing. • Featherstone is heavily involved in the geoduck and sea urchin fishing industries. He has been an underwater harvester and fisherman for more than 25 years and is now very active on various councils for the betterment of the seafood industry as a whole. He is also president of the Pacific Underwater Harvesters Association. Link to article: Winter 2004 |