Bumble Bee Seafoods L.L.C.
Address:
9655 Granite Ridge Drive, Suite 100
San Diego, California 92123
U.S.A.
Telephone: (858) 715-4000
Fax: (858) 560-6045
http://www.bumblebee.com
Statistics:
Private Company
Incorporated: 1960 as Bumble Bee Seafoods, Inc.
Employees: 1,000
Sales: $500 million (2003 est.)
NAIC: 311711 Seafood Canning; 311712 Fresh and Frozen Packaged Fish and Seafoods
Company Perspectives:
Families all across America have grown up on the delicious taste of Bumble Bee Seafoods. They've enjoyed our family of products in sandwiches, salads, casseroles ... even right out of the can!
Key Dates:
1899: Seven fishermen in Astoria, Oregon, establish Columbia River Packers Association (CRPA) to fish and process sockeye salmon at Alaska's Bristol Bay.
1910: CRPA switches from salmon to tuna fishing.
1920: CRPA expands its Astoria cannery.
1960: CRPA becomes a wholly-owned subsidiary of Castle & Cooke and is renamed Bumble Bee Seafoods Inc.
1977: Bumble Bee acquires a fishing base in Ecuador and tuna cannery in Puerto Rico.
1980: Bumble Bee suspends its canning operations in Astoria.
1997: Bumble Bee is sold to International Home Foods, Inc. (IHF).
2000: ConAgra Foods, Inc., acquires Bumble Bee.
2003: Company is renamed Bumble Bee Seafoods L.L.C. and is spun off from ConAgra.
2004: The Canadian firm Connors Bros. acquires a majority share of Bumble Bee.
Company History:
Bumble Bee Seafoods L.L.C. is a top producer and marketer of canned albacore tuna, canned salmon, and other seafood products. Its Bumble Bee brand ranks second in the U.S. tuna market, while its Clover Leaf brand is the market leader in Canada. Bumble Bee is majority owned by Canadian seafood company Connor Bros., through that company's Income Fund trust. Bumble Bee's products include solid white and chunk light albacore tuna, as well as other specialty seafood products, including canned red and pink salmon; shrimp in all sizes; crab in a variety of cuts; whole and smoked oysters; whole, chopped, minced, and smoked clams; sardines in a variety of flavors; mackerel; and scallops. The company also makes ready-to-eat products, including packaged tuna and seafood salads with crackers. In addition to activities in North America, Bumble Bee's sales and operations extend to Australia, the Caribbean, Europe, Latin America, and New Zealand. Its canning facilities are based in California and Puerto Rico.
Origins and Development of a Seafood Business
The history of Bumble Bee Seafoods can be traced to 1899, when seven canning companies along the Columbia River in Astoria, Oregon, decided to unite their operations under the auspices of the newly incorporated Columbia River Packers Association (CRPA). Salmon fishers and canners had come to Astoria in the 1860s, when the Columbia River produced abundant salmon supplies. After the salmon supply peaked in the 1890s, the more than 50 businesses that had sprung up in the area began looking to Alaska for their catch of the ocean sockeye variety of salmon. When the CRPA was founded, canneries in Astoria were seeking a cooperative organization, with centralized operations, that would be better prepared to handle strikes among the local fisherman's union. Among the group's leaders was Samuel Elmore, whose Astoria plant became the main cannery for the CRPA. The group was able to purchase several new sailing vessels and establish a cannery on Bristol Bay in Alaska. It also built bunkhouses near the Astoria cannery to house the Chinese immigrant laborers it employed.
The CRPA continued to focus on salmon canning until the mid-1930s, when it was discovered that albacore tuna were plentiful off the coast of Oregon. CRPA then began catching, canning, and marketing the new product in limited quantities until tuna proved itself a popular and saleable food, at which time the group's focus begin to shift increasingly to tuna. In 1938, the CRPA added on to its main cannery in order to handle the volume of tuna being canned. During this time, both salmon and tuna were processed under the Bumble Bee label, a name inspired by a fishing vessel owned by the company. By 1940, tuna had surpassed salmon to become the CRPA's primary product.
The company continued to expand its operations as the Bumble Bee brand built a solid reputation. By the 1950s, the company was recognized as a major competitor in the seafood industry, and by the end of that decade, the Bumble Bee brand had become one of the most respected labels in canned seafood. During this time, major consolidations in the industry took place, with large consumer goods companies buying up most of the canneries in California, Oregon, and Washington. Before long, a prominent Hawaii-based seafood company, Castle & Cooke, took notice of the CRPA and struck a deal to acquire a 61-percent ownership stake in it. In 1960, the CRPA was rechristened Bumble Bee Seafoods, Inc., becoming a wholly owned subsidiary of Castle & Cooke. Eventually Bumble Bee was more fully integrated into the parent company, becoming an operating division. Under Castle & Cooke, a new Bumble Bee cannery was established in Cambridge, Maryland, adding to its existing canneries in Astoria and Honolulu.
By the 1970s, Bumble Bee had experienced considerable growth. In 1975, it made a major purchase of a fleet of tuna seiners, and two years later it acquired another cannery, this one in Puerto Rico. A fishing base was also established in Ecuador. By the close of the decade, Bumble Bee had purchased an additional cannery from Sun Harbor Industry in San Diego.
1980s: Expansion and Ownership Changes
Bumble Bee underwent a series of significant changes in the 1980s. First, it shuttered its operations at its original cannery in Astoria, which was no longer a central location for operation. Interestingly, the Astoria cannery had been deemed a National Historic Landmark in 1966 and was recognized as the longest continuously-operated cannery in the country. The next change for Bumble Bee occurred in 1984, when Bumble Bee's division president, Patrick Rose, learned that the company was about to be put on the auction block. Rose decided to buy Bumble Bee from Castle & Cooke and take the division private. Rose and three managers negotiated the 1985 leveraged buyout, and then Rose took steps to help the company's bottom line. Toward that end, he declined to purchase two of the company's unprofitable plants, in San Diego and Hawaii, and decided against acquiring Bumble Bee's tuna fishing fleet. Rose also rejected Castle & Cooke's long-term contracts with domestic fishermen, and began buying tuna from less expensive Asian sources. In addition, he cut the company's advertising budget in half, increased the offshore cannery staff by 300 workers, cut 30 staff from the corporate payroll, automated office operations, and issued stock options to managers as well as performance-based incentive plans to others in the company. Finally, Rose added capital to Bumble Bee's cannery operations in Puerto Rico and moved the company's headquarters from its old San Diego waterfront structure to a new, modern hilltop office building in the city.
Rose and the others on the management team anticipated that the company would become more successful in five years. However, in only the first 29 weeks under the new operations, Bumble Bee was already able to pay down its bank debt substantially. By 1987, the company had moved up from number three to become the second most popular brand of tuna. By the end of the decade, Rose and the other three managers were ready sell the company or go public, a full two years ahead of their planned schedule. At a board meeting in Puerto Rico in 1988, the four principals reached a decision to sell, and Pillsbury agreed to buy the company as long as Rose agreed to stay on as head of the company for five years.
In 1988, Grand Metropolitan plc, a British conglomerate, took over Pillsbury following a bitter corporate battle. The next year, Grand Metropolitan ordered Pillsbury to get out of the seafood business. The decision left Bumble Bee floundering, along with Van De Kamp's, another Pillsbury purchase that had taken place less than five years before. Although Bumble Bee had pulled in sales of $285 million in 1988, Grand Metropolitan considered it a poor prospect for future growth, and Pillsbury reached a tentative agreement to sell both Bumble Bee and Van de Kamp's seafood subsidiaries in August 1989. Uni Group, a new U.S. affiliate of Unicord Company of Bangkok, Thailand, purchased Bumble Bee for $269 million in cash. The transaction marked the first time a Thai company had purchased an American concern of so great a magnitude. Uni Group kept the existing management team at Bumble Bee, and plans were set to open a new canning facility in Santa Fe Springs, California, within six months that would be responsible for accepting tuna loins cleaned in Thailand and shipped there for canning.
The 1990s Dolphin Controversy
In 1990, a national controversy arose over the method most fishermen used for catching tuna. Known as purse-seine netting, the method allowed fishermen to cast a large net around a school of tuna and pull it together to trap the fish. However, dolphin in some areas tended to school with yellow fin tuna, and the purse-seine method of netting inadvertently trapped the dolphins as well. After the controversy began, the three largest sellers of tuna in the United States moved quickly to quell a potential boycott of their products by announcing that they would no longer buy or sell tuna caught by the purse-seine method, thus protecting the dolphins. All three seafood companies, including Star Kist, Van Camp, and Bumble Bee, put "dolphin safe" logos on their cans. However, in December 1990, an ad war was begun by environmental activists from Earth Island Institute, who charged Bumble Bee with failing to comply with its agreement to not accept fish from boats that killed dolphins, even though it was still labeling its products "dolphin safe." The Earth Island group took out full-page ads accusing Bumble Bee of lying to the public. Unicord, the owner of Bumble Bee, quickly countered by threatening a libel suit, maintaining that it was complying with the dolphin-safe agreement. The battle resulted in the two sides presenting their positions on the nationally-televised morning show "ABC's Good Morning America," allowing the public to decide for themselves.
In the early 1990s, Bumble Bee also underwent changes in its warehousing and shipping methods. The company, which had been using public warehouses since 1906, and had 13 facilities to store its products, began using new machines for production, which allowed increased production, from 1,200 cans per minute to 1,400 cans per minute. The biggest change, however, was in packaging. The company eliminated corrugated cases and began using tray pack/shrink wrap, the format preferred by supermarket retailers. In 1996, Questor Management Company and the parent company of Star-Kist Foods, H.J. Heinz, announced a deal to acquire Bumble Bee from Unicord for $200 million. Under the terms of agreement, Questor would lead the marketing and own the Bumble Bee brand name, while the Star-Kist affiliate would buy Bumble Bee's tuna production facilities in Mayaguez, Puerto Rico, Santa Fe Springs, California, and Manta, Ecuador. In addition, Questor signed a letter of intent that Unicord would continue to supply Bumble Bee with tuna and salmon for packing. However, the deal fell through that December.
In May 1997, an announcement was made that Bumble Bee would be sold to International Home Foods, Inc. (IHF), a New Jersey-based company. The deal would allow IHF to purchase Bumble Bee's ongoing canned seafood business and acquire substantially all of its assets and subsidiaries for $163 million cash and the assumption of certain liabilities of Bumble Bee. The acquisition would give the New Jersey-based manufacturer and marketer of branded food products ownership of Bumble Bee's processing plants in Puerto Rico, Equador, and Santa Fe Springs, California, along with its procurement offices in Japan and Washington, and its corporate offices in San Diego. The same year, IHF also purchased Orleans Seafoods, Inc. This acquisition put Bumble Bee in the position of expanding its seafood products to include such specialty items as anchovies, clams, oysters, shrimp, and smoked scallops. Bumble Bee launched a major marketing campaign to advertise the new products, which included recipe contests in daily newspapers, and television and radio advertising. IHF also acquired Canadian company, BC Packers, which allowed Bumble Bee to provide the leading brand of salmon and tuna in Canada under the Clover Leaf label. Also, the company began distributing the leading brand of high-quality packed sardines, called King Oscar.
2000 and Beyond
In 2000, IHF announced that it would be acquired by ConAgra Foods, Inc., one of the largest branded food companies in North America, for $1.6 billion plus assumption of $1.3 billion in debt. Under the deal, IHF shareholders would receive $22 per share, half in cash and half in ConAgra stock. After the deal was completed, IHF would add additional brands to ConAgra's large portfolio, including the Bumble Bee Seafoods brand, and create a company with some $28 billion in annual sales. Bumble Bee, which had now acquired Tyson Seafood's surimi business, including the Louis Kemp brand, had estimated sales of $750 million at the time of the sale.
After three years, in May 2003, ConAgra announced that it would spin off its Bumble Bee canned seafood business and other seafood assets to Bumble Bee's operating senior management, along with the private investment firm of Centre Partners Management LLC and affiliates. The purchase included the Bumble Bee, Clover Leaf, Orleans, and Paramount brands, along with Bumble Bee operations in California, Canada, Ecuador, Louisiana, and Puerto Rico. Bumble Bee's management team, including President and CEO Christopher Lischewski, continued to run the company, which became known as Bumble Bee Holdings L.P. Despite numerous ownership shake-ups over the years, Bumble Bee was the number one producer of canned albacore tuna, canned salmon, and specialty seafood products sold under the Bumble Bee brand, as well as the number two brand, behind StarKist, in overall tuna products. Lischewski expressed the company's interest in continuing to expand its position in the global seafood market by capitalizing on its low-cost operations, brand name recognition, and procurement strength.
As Bumble Bee moved forward, it contracted with San Diego-based Fleishman-Hillard to serve as its public relations agency. Because both companies had their home offices in San Diego, both maintained a strong local presence as well as a strong national reach, all helping Bumble Bee to achieve a broader presence. Bumble Bee made plans to expand into new seafood categories and aimed advertising campaigns toward consumers, food retailers, and potential business partners.
In early 2004, Bumble Bee announced that it had entered into negotiations with Canadian-based Connors Bros. Income Fund, the management arm of Connors Bros., the largest producer of canned sardines in the world. The deal was signed in March of that year, being unanimously approved by all involved, and gave Connors Bros. a controlling stake in Bumble Bee, with the remaining shares retained by the company's then current owners. Bumble Bee's CEO Lischewski retained his position, while Connors CEO, Edward McLean, was named executive vice-president. When the deal was completed, Bumble Bee Seafoods L.L.C. became the largest branded seafood company in North America, a company poised for continued success and prosperity.
Principal Competitors: Ocean Beauty Seafoods Inc.; StarKist Seafood; Tri-Union Seafoods LLC.
Further Reading:
- Kelly, Robert, "Connors Bros. Shareholders OK Deal to Merge with U.S. Tuna Firm Bumble Bee," America's Intelligence Wire, March 19, 2004.
- "ConAgra Sells Bumble Bee Canned Seafood Unit," New York Times, May 20, 2003.
- "ConAgra Sells Bumble Bee Seafoods," Seafood Business, June 2003, p. 4.
- "International Home Foods, Inc. to Acquire Bumble Bee Seafoods, Inc.," PR Newswire, May 2, 1997.
- Nathans, Leah, "Hot for Glory," Business Month, January 1989, p. 52.
- Our History, San Diego, Calif.: Bumble Bee Seafoods, 2004.
Source: International Directory of Company Histories, Vol.64. St. James Press, 2004.
