Peter Pan, the seafood processing company with an array of plants in Southwest Alaska, had been struggling to keep up with competitors.
So when its owner, Japanese seafood giant Maruha Nichiro, initially announced its sale of Peter Pan to three buyers, it expected a loss of almost $28 million.
The deal means the company is now vertically integrated, so all stages of production and marketing — usually operated separately — are now under one owner. It also places Peter Pan under American ownership.
One of the three buyers is Northwest Fish. Its owner, Rodger May, is the president of “New Peter Pan.” The Na’-nuk Investment Fund, managed by McKinley Capital, and RRG Global Partners Fund are the other buyers.
McKinley Chairman Rob Gillam said the buyers see the deal as an investment in sustainably harvested Alaska seafood. But they agree that Peter Pan needs to up its marketing game.
“The best fish in the world isn’t any good if you can’t get it to people who want to buy it,” he said. “So, that was really critical.”
That’s where Northwest Fish comes in: It’s a fish seller based in Seattle. Gillam said combining sales and production will help them reach more customers.
Gillam is the son of the late Robert Gillam, a key figure in the fight against Pebble Mine who died in 2018. He said New Peter Pan is committed to environmental stewardship and local involvement.
Peter Pan is one of the oldest seafood companies in the state. It has changed hands several times, including when the Bristol Bay Native Corporation owned it in the 1970s. The company has struggled in recent years, however, in part due to competition from other processors, and lower production and harvests outside of Bristol Bay.
Gillam said the new owners want to harness the unpredictability of the fishing industry.
“You will see our focus on being a vertically integrated seafood company. So, that means that we will have processing capabilities that will go upscale, value added. We have distribution and sales capabilities,” he said.
Gillam said the pandemic was “extremely difficult” for the seafood industry, but added that demand for sustainably harvested seafood has risen. The company plans to meet that demand.
“You’ve got to put more pounds through the plants — put more fish through the plants. When you do, you get more efficient, the costs come down, that benefits everybody,” he said. “It means you pay fishermen a little bit more. It means you can provide more benefits to the people who work there. It means you can lower the cost against which you can sell your product into the market.”
The private equity investors want to strengthen Peter Pan’s diminished reputation with its fleet, Gillam said. They expect to announce other changes as the summer fishing season approaches.
“Change always scares people, so I just want to be really clear. Absolutely, you can expect change,” he said. “But when you’re part of a team that hasn’t won very many games, winning more games is change. And that’s a good thing, not a bad thing.”
The company said it will continue to operate plants in Dillingham, King Cove, Port Moller and Valdez, along with support facilities in Naknek and Sand Point. Its headquarters are in Bellevue, Wash.
A new owner for the processor is buoying King Cove’s fishermen, but at the same time, the town’s finances are sinking.
Gary Hennigh, city administrator for King Cove, said he’s happy about new ownership of a company that has long been part of the community, after its presence there was threatened by new plants elsewhere in the region.
“The last few years we knew that there were issues going on, that Peter Pan was struggling. In part, just because of the fishing seasons that we’ve been having, in part because of the big investments over in False Pass with two other competitors that started moving product away,” he said.
Hennigh was referring to Trident and Silver Bay Seafoods.
King Cove has seen its tax revenue fall as Peter Pan struggled, and the problem has been compounded by the pandemic. Now, he said, the Peter Pan sale is a chance for the community to start again.
“We’re optimistic that new owners will have a new attitude, new market potential, and that we can get King Cove back to the type of community that we had with a pretty thriving economic base up until a couple years ago,” he said.
The sale was finalized on Dec. 31, 2020. The price was not disclosed.