Neptune Gourmet Seafood¡¦S Supply Problem Essay

What driving forces do you see at work in this industry? Are they likely to impact the industry’s competitive structure favorably or unfavorably? (Did we answer this question?)

The framework used in this note is organized around the estimates of industry demand, market share, costs, and performance. All data

The Boiling Crab is considered to be a restaurant business; therefore, the main focus of the business is to increase new customers and sustain the existing customers. The restaurant is also considered to be in the service business, so many customers expect a good service and food from this kind of business. Moreover, referring to table 1, the main focus of the business is in California because twelve locations have already opened, but the other four locations will be opened soon. Referring to IBIS World, the business location percentage for the seafood in California is 14.4% which is the highest percent in U.S. Therefore, the company focuses on the right location for the seafood restaurant.

Neptune Gourmet Seafood is facing two major issues – an excess inventory problem and shrinking

May 2007 to April 2009 Update Over the past two years, AFC has faced more intense competition, particularly from aquaculturists in Chile. In addition, Chilean output has increased the supply of salmon and the Canadian dollar has strengthened in relation to the U.S. dollar. As a result, AFC has been unable to meet its budgeted revenue targets. Stocks of unsold harvestable fish have increased, as well as the corresponding cost of maintaining the fish, and the company barely made a profit in fiscal 2009. In January 2009, AFC lost one of its largest retail customers, S&F Seafood, to a new salmon aquaculture firm, Nu-Farm Inc. This new

New England Seafood Company is a leader in the northeastern United States in harvesting and processing seafood. The company’s senior executives believe that there must be a change in the corporate strategy to maintain their competitive advantage, as foreign producers are affecting their current yields. Currently, New England Seafood Company operates in the Atlantic Ocean and Gulf of Mexico dealing exclusively in saltwater fish. Management feels that a move into the freshwater fish sector will provide the company with a new directive and future stability.

Neptune Gourmet Seafood is an $840 million corporation that provides premium seafood in North America. They are the 3rd largest seafood producer in the market, and have been around for 40 years, continuously providing the highest quality of product. Despite their success, they are having issues with what appears to be a temporary problem of excess inventory. Due to new coastal laws, investments in new freezer trawlers and fishing technology, Neptune’s trawlers have been able to move further out to sea to fish and maintain the quality the company has been known for. By going further out to sea, they have been bringing back larger than normal catches due to richer fishing grounds,

Seeing as the lack of licenses could potentially result in a loss of a about twenty percent or more not just in the industry of the Bering Sea, but also in Japanese markets, which rely heavily on the produce collected abroad, getting all licenses approved by the federal government is a primordial necessity. Otherwise, there is great potential for the price of crab to drop drastically, resulting in an overall “lost revenue” in the industry, as stated by Kyung M. Song a journalist for the Seattle Times,which will depict the many discrepancies affecting the secure economic status of the nation as a result of the government

Craig Medrid from the Alaskan Dispatch News discusses the fishermen at the beginning of his article, states that “[f]ishermen don't seem to be getting too antsy just yet” but as the article progresses they discuss the panic the fishermen and distributors started to feel. The distributors and the fishermen are at risk of losing, "[t]ens of millions of dollars are potentially at risk if we can't get the product to market in time for the holiday season in Japan," not only the companies are losing money but it is affecting the world who imports the king crab. The king crab industry had a rough start to their season, but it was also a costly

Given the changes in Red Lobster’s strategy over the past few years and the surprising ability to attract new, “experiential” customers, it our recommendation that they modify their strategy to focus on pursuing this type of clientele. We will go into further detail momentarily; however, the reason for focusing on the experiential customer group is that Red Lobster has the opportunity to increase revenue and net operating income at each restaurant by 20% or more. Granted, these are enormous gains and it will take a few years to realize their full potential, but for the reasons laid out below, we believe these gains are a realistic possibility.

The availability of seafood in Canadian and Argentinean waters is also dependent on the total allowable catch allocated to Clearwater in a given area. Although the totals allowable catch in these areas and Clearwater 's enterprise allocations have been largely stable, fishery regulators have the right to make changes in the total allowable catch based on their assessment of the resource from time to time. Any reduction of total allowable catches in the areas from which Clearwater sources seafood, or the reduction of stocks due to changes in the environment or the health of certain species, may have a material adverse effect on Clearwater 's financial condition and results of operations.

The response by others is critical to the current issue and the decision that management is most focused on. Depending on the actions of Neptune, there will definitely be a reaction from their competitors to include the U.S. Association of Seafood Processors and Distributors (ASPD). If Neptune were to lower prices, it most likely would cause other competitors to lower their prices as well and potentially could cause a price war that none of the businesses could afford in the long run. Neptune especially could not afford this based on their cost structure (Kesner & Walters, 2005, p. 18). It could also potentially cause a backlash with customers if they feel they had been overcharged in the past.

A. Executive Summary: Neptune Gourmet Seafood is currently struggling with what appears to be a temporary problem of excess inventory. A combination of new coastline regulations and an investment in new fishing vessel technology and freezer trawlers has increased their average catch size while demand in the current segment has not grown as quickly. The Neptune management team is faced with a decision of how to clear out its excess inventory that is not moving fast enough under its Neptune Gold branding. My recommendation is to launch a mass-market product under a different product line in order to monetize excess inventory and position Neptune to capture more of the North American seafood market share. Going forward

| - BRF owns 77% of domestic revenue generated from food retailers. - BRF needs to invest in selling a wider variety of food services in order to grow their market share and generate more revenue domestically.

|the industry and its challenges it is important to understand its various phases of growth so far. |