- The Washington Times - Monday, August 3, 2020

When it comes to business plans during the coronavirus pandemic, the seafood industry has found itself at sea.

“We don’t have a clue,” said Jure Slabic, an oysterman in Galveston, Texas. “We haven’t processed a single oyster since March 23.”

More than most foodstuffs, the seafood industry depends on restaurants that put a premium on freshness. Consequently, the coronavirus shutdowns slammed fishers, leaving boats at the dock, inventory stacked or tossed as debt piles up.

“With the restaurant closures starting in mid-March, there has been a massive impact on us in terms of demand,” said Kim Gorton, CEO of Slade Gorton in Boston. “April was a disaster, and my greatest concern now is what is to come.”

The famous fisher’s oilskin jacket and cap have been a staple of the industry and the Gorton family’s product line since before the Civil War, when Ms. Gorton’s great-great-grandfather launched the fish stick business that still carries the family name.

Slade Gorton marked the ancestral angler’s second business and the family has run it since 1859.

Like other seafood distributors, much of Slade Gorton’s business relies on credit — restaurants frequently pay for the fish they serve, meaning payment often comes late to the intermediaries.

“It’s hard to tell who’s on the edge right now,” Ms. Gorton said of business survival. “We’ve got inventory backed up from the restaurant freezers to the dock and some restaurants aren’t going to make it. We will survive one way or another, but everybody makes money only when the product is flowing.”

The National Fisheries Institute, a trade group, puts the outstanding debt in the industry around $2.2 billion.

“With so much debt it makes it very difficult for the distributors to distribute again,” said Gavin Gibbons, a spokesman for the NFI. “The middle of the supply chain is crucial. A cash infusion through any new PPP would go a very long way.”

The Paycheck Protection Program (PPP) provides small businesses up to $10 million in forgivable loans to keep workers on the payroll.

The seafood industry has stepped up lobbying to get a piece of the next coronavirus relief package that has been bouncing around Washington.

“We rely on restaurants directly or indirectly almost 100%, and on March 23 we went from wide open to zero,” Mr. Slabic said.

The Slabic family has fished for five generations, with his ancestors once shifting from Mediterranean to the Gulf of Mexico by seasons. Now based in the U.S., Mr. Slabic has had to reduce staff, which once included roughly 20 people on land and another 30 at sea at any given time.

“We’ve brought back some people, but the way the margins are so small you can’t stay open taking oysters to two or three restaurants,” Mr. Slabic said, noting in peak times they would move 300,000 pounds of shellfish a month.

Business restrictions, including restaurant closings, have returned in some states dealing with a resurgence of coronavirus, with Ms. Gorton citing Texas, Florida and California as three major markets that have recently dived a second time.

In some places, takeout or curbside dining is still permitted. Ms. Gorton noted that Boston has tents on streets closed to traffic that restaurants are using but said that for whatever reason seafood doesn’t seem to be “getting its share” of that smaller market.

“We got a quick dose of reality when we learned almost 90% of our business is tied to restaurants, no other protein is like that,” said Chris Nelson, a fourth-generation fish man in Bon Secour Bay, Alabama. “There wasn’t a lot of take-out of what we sell.”

Mr. Nelson’s business in the first half of 2020 is about two-thirds what it was at this point in 2019. After laying off about 60% of his staff in April, Bay Secour Fisheries has rehired most of them through the Paycheck Protection Program, he said.

“But that’s at the tail end now,” he said. “Of course we’d like another bite at the apple but my primary concern is my customer base.”

The uncertainty surrounding the shape of the future market, which will presumably shrink dramatically if restaurants close permanently, and the status seafood may enjoy in the next relief package have also chilled business, all involved say.

“We’re all holding our breath,” Mr. Nelson said. “Have we just extended the inevitable? Things aren’t terrible right now but they aren’t normal and there doesn’t seem to be any normalcy to this year.”

• James Varney can be reached at jvarney@washingtontimes.com.

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