C.H.B. Foods’ American Brand to Debut Next Month : Tuna Canner Uses Patriotic Theme

Bob Allen vividly recalls the day last summer when the International Trade Commission turned down an appeal by the domestic tuna industry to impose stricter tariff restrictions on canned tuna from the Far East.

Driving from his office on Terminal Island to his home in Diamond Bar, the vice president-sales and marketing for C.H.B. Foods Inc., the only surviving tuna canner in the continental United States, became angry that the commission had decided that American tuna canners didn’t need government protection from cheaper imports.

“I was obviously upset,” Allen, 38, said in an interview. “I said to myself, ‘If the government won’t help us, maybe the consumer will.’ ”

Thus was born the idea for American tuna, a new brand with a red, white and blue label that C.H.B. will begin test marketing in three Eastern cities within the next two weeks and throughout California within a month.

If the public bites, the firm expects to begin selling the patriotic tuna in other states by summer.

C.H.B. says it is merely following in the footsteps of other America industries, such as automobile makers, by countering stiff foreign competition with an unabashed plea to buy American.

Allen said the firm is launching a $1.5-million promotional campaign that will include advertisements in newspapers and magazines. The ads will play heavily on the fact that American Tuna is the only major tuna brand packed exclusively in the continental United States. (Most other national brands now bring in canned tuna from their canneries in Puerto Rico, Asia or other areas.)

To Display Union Emblem

The firm will also launch a direct-mail campaign aimed at those who it believes are most likely to respond--union members.

C.H.B. got permission from the United Industrial Workers, which represents the Terminal Island cannery workers, to display the union emblem on the American Tuna label. The firm also sent letters to labor leaders across the country urging them to publicize American Tuna and provide mailing lists so that union members can receive promotional material and discount coupons.

Steve Edney, national director of the United Industrial Workers, said the union has lost about 6,000 members in recent years as a number of tuna canneries have closed in Los Angeles and San Diego. He predicted that C.H.B.’s new product will attract support from other unions nationwide.

“I don’t think it will bring about a renaissance in the tuna industry, but it will revitalize it,” Edney said.

He added that the new brand represents a boost for the cannery workers, who voted last fall to take a temporary cut in wages to save their jobs. “C.H.B. gave them a rollback but, instead of keeping the money, they gave it back” by investing in the new brand and saving jobs, he said.

Los Angeles-based C.H.B. Foods, which processes a variety of other foods including Skippy dog food and Mariners Cove clam chowder, reported revenue of $290 million and profits of $4.91 million in the year ended June 30, 1984. Both were down slightly from the previous year.

Last month, C.H.B. agreed with New York-based Hermes Investment Corp., a private investment company, to merge into California Home Brands Inc., a privately owned company being formed by Hermes.

While C.H.B., under its Pan Pacific Fisheries division, has been successful in selling so-called house-brand tuna to supermarket chains, the firm’s tuna operations have been hurt in recent years by the same problems that have faced its competitors--too much tuna and overseas processors who pay much cheaper wages.

Revenue Decline

As a result, Allen said, the firm’s revenue from fish products, 90% of which is derived from tuna sales, has taken a beating, sliding from $98.6 million in 1982 to $88.1 million in 1984. Moreover, the company is now operating only one of its two tuna plants on Terminal Island and expects to process 40,000 tons of tuna this year, compared to 60,000 tons in 1984.

The company gets most of its tuna from its own fleet and other U.S. tuna boat operators, although it occasionally purchases frozen raw tuna from overseas fisherman, a company official said.

Harry Tahija, Pan Pacific’s controller, said 800 to 1,200 cannery workers are now employed by the company, down from about 1,800 workers five years ago.

Last November, the workers accepted a $1-an-hour wage cut that will be repaid over the next three years. In 1982, the workers had agreed to a wage freeze for one year, he said.

Allen said the plan to market American Tuna began in earnest after Star-Kist Foods Inc., a unit of Pittsburgh-based H. J. Heinz Co., closed its Terminal Island tuna cannery last fall, idling more than 1,100 workers and leaving C.H.B. as the only tuna cannery on the island.

Before that, San Diego canneries operated by Bumble Bee, a unit of Honolulu-based Castle & Cooke Inc., and Van Camp Sea Foods, a unit of St. Louis-based Ralston Purina Co., were closed.

100,000 Cases

Van Camp and Star-Kist operate other canneries in American Samoa and Puerto Rico, and U.S. fishermen now take much of their catches there.

C.H.B. plans to produce about 100,000 cases of American Tuna for marketing tests, and supermarkets will be offered a small initial discount on each case they purchase. The tuna will carry a price tag comparable to other major brands on the market, the company says.

Allen said the firm decided to test market the product in Scranton, Pa., and Syracuse, N.Y., because of the large number of union members and blue-collar workers who reside in those cities.

In addition, the firm will market the tuna in New York City, generally believed to be the tuna-eating capital of the nation. Industry figures show that 3.3 million cases of tuna were sold in the area in 1984, compared to 2.3 million cases in Los Angeles, San Diego and Riverside counties.

Ed Ryan, administrative vice president of Star-Kist, said that, although his firm wishes C.H.B. well, American Tuna may face an uphill battle.

“It’s a very competitive market,” Ryan said. “Nobody has really introduced a national brand for years.”

He added that C.H.B. could have marketed the tuna five years ago and made the claim that the product was the only tuna packed exclusively in the United States, since the major national brands were importing at least some of their canned tuna long before they shut down their U.S. canneries.

Lupe Gonzales, 57, a cannery worker for 40 years and a C.H.B. employee for the past 18, said that, if nothing else, C.H.B.’s decision to pack American Tuna may mean that she and her co-workers will keep their jobs for a while.

“At least we can stay on the job that much longer,” Gonzales said. “We’re not that young where we can go out in the modern world and get another (job).”