Bumble Bee Weighs Sustainability vs. Cheap Tuna

Bumble Bee Weighs Sustainability vs. Cheap Tuna

Image CC licensed by Flickr user jules:stonesoup

Bumble Bee Foods is a survivor. Founded in 1899, Bumble Bee, which is headquartered in San Diego, owns two of the last three canned tuna factories in the U.S. (in southern California and Puerto Rico) and one of the last two canned clams plants (in Cape May, N.J.). The company went bankrupt in the late 1990s but it has emerged stronger, and it's now North America's largest branded shelf-stable seafood company.

But Bumble Bee's tuna business, which accounts for more than half of its revenues of close to $1 billion, has a new worry: If the world's fisherman can't agree to intelligently manage capacity, tuna stocks could well be threatened. Bumble Bee logo

"We're at maximum sustainable yield," says Chris Lischewski, Bumble Bee's president and CEO.

Bumble Bee itself doesn't own fishing boats -- it's a processor and marketer of seafood -- but its future obviously depends on a reliable supply of fish.

Chris LischewskiI met Chris a week ago at FORTUNE's Brainstorm Green conference, where I led a panel on sustainable seafood. (Tomorrow, I'll blog about Josh Goldman of Australis, who also spoke.) A former management consultant who has run Bumble Bee since 1999, Chris told me that he didn't worry much about fish supplies until the mid-2000s when it became apparent to him that global efforts to regulate tuna fishing weren't working.

In response, Bumble Bee with the World Wildlife Fund and industry rivals, including Starkist (a unit of Korean fishing conglomerate Dongwon) and Chicken of the Sea (now owned by a Thai parent), created the nonprofit International Seafood Sustainability Foundation (ISSF) in 2009. Chris now chairs its board, and he has had to become an expert in fisheries management.

He told me that responsible operators in the seafood industry and mainstream environmentalists share a common goal, for the most part: They want to preserve the world's wild fish. That doesn't mean they always agree, of course. Greenpeace Canada, for example, spanked Clover Leaf, a unit of Bumble Bee, in its recent seafood rankings. Chris says that's partly because Clover Leaf didn't respond to a Greenpeace questionnaire.

His bigger concern is that tuna fishery regulation is ineffective. Partly that's because tuna are tough to regulate: They never stop moving, they are widely but sparsely distributed around the world and they can travel thousands of miles, onto the high seas, beyond the reach of any nation. Tuna fishing is regulated by regional fisheries management organizations, or RFMOs, made up of many countries (19 in one central Pacific group), some of which control fishing grounds, others that own the boats. Policing the high seas is a big challenge, Chris told me. "There's absolutely nothing that stops new boats from coming in," he said.

As a result, with no effective catch limits and major improvements in fishing technology, the numbers of tuna being drawn from the sea has skyrocketed in recent decades. An ISSF report on the status of the world fisheries for tuna says:

Between 1940 and the mid-1960s, the annual world catch of the four principal species of tunas that are processed for the stable shelf-life market (skipjack, yellowfin, bigeye and albacore) rose from about 300,000 tonnes to about 1 million tonnes, most of it taken by hook and line. With the development of purse-seine nets, now the predominant gear, catches have risen to more than 4.3 million tonnes annually during the last few years.

The Marvelettes were perhaps right, way back in 1964, that there were "Too Many Fish in the Sea." No more.

The ISSF, according to Chris, would like to get the world's countries to agree to "control and limit the number of vessels" fishing for tuna. Its member companies process about 70 percent of global tuna production, so they have clout. Retailers, for example, could be encouraged to buy only from ISSF companies; Walmart Canada has already agreed to do so. If it works, this will be an example of big companies doing what government cannot.

I asked Chris how Bumble Bee will grow its revenues and profits if tuna catch is going to be limited.  He said there's a possibility of expanding the supply of fish through aquaculture, and that Bumble Bee can acquire more of the tuna supply if it can persuade its customers to pay more for canned tuna.

"My big challenge is that Americans think tuna is cheap protein," he said. Ten five-ounce cans of Bumble Bee chunk light sell for $15.45 at Amazon, less in some supermarkets. "It's too cheap," he said.

To persuade shoppers to pay more, the tuna industry has launched an ad campaign called Tuna the Wonderfish that touts the health benefits of tuna (lots of Omega 3s) and offers free recipes for tuna burgers and tuna fajitas. Here's one of their clever TV ads:

These ads  focus on tuna's benefits, not its price. It's all but certain that customers will have to pay more for tuna in the future -- demand will continue to grow, driven by health and wellness concerns, and supplies will be limited, if Lischewski and the other processors get their way.

If they don't, supplies could one day become very limited, and that would be a tragedy.

Image CC licensed by Flickr user jules:stonesoup