Seafood Brokers Hook a Healthy Market : Consumers’ Demand for Fresh Fish Leads to Booming Business
Like most successful commodities brokers, Jerry Casey leads a very stressful life.
Each weekday, he’s usually at work by 5 or 6 a.m. Between trips to the coffee pot, he studies the latest market quotations from New York to learn what is available and at what prices.
Then, he gets on the phone and starts calling his clients. With caffeine and Adrenalin racing through his bloodstream, Casey spends the rest of the day matching buyers with sellers.
He gives advice and recommendations with an eye toward closing as many deals as possible, because each completed transaction generates a commission of between 2% and 9%.
But there’s something very fishy about the way Casey makes his living.
Instead of stocks, bonds and options, Casey handles only such edible commodities from the sea as fresh mahi-mahi, swordfish and tuna.
No Wealthy Investors
Instead of wealthy investors, C.C. Seafood Products of Oceanside, Casey’s 2-year-old brokerage house, serves seafood wholesalers in Los Angeles and San Diego. The wholesalers in turn service restaurants and fish markets throughout Southern California.
Instead of large, publicly held corporations, his brokerage represents independent fishermen and divers, and processing plants in Ecuador, Costa Rica and Mexico.
And instead of the financial reports in the Wall Street Journal, Casey’s business bible is the National Marine Fisheries Service’s ‘green sheet,’ a weekly survey of wholesale seafood prices published by the U.S. Department of Commerce’s National Oceanic and Atmospheric Administration.
“Seafood brokers are just like any other type of broker,” said Casey, whose sales transactions average $50,000 to $60,000 a month. “You constantly need to review information to see what’s happening with your product and with the seafood market in general.
“You have to determine whether prices are going up or coming down, and what the balance is between supply and demand. If you have more orders than fish, you need to allocate what’s available; if you have more fish than orders, then you need to concentrate on selling the surplus.”
With a laugh, he added, “It’s a lot like trading on the stock market, except you don’t have fish futures--at least, not yet.”
Like stock brokers, San Diego’s half-dozen seafood brokers do much of their work on the phone, pairing up buyers and sellers without risking any of their own capital--or even taking possession of the merchandise.
“That way, you don’t put your own money on the line,” said J.B. McQuillen, whose 3-year-old Atlantic Pride Seafood brokerage in Mission Beach deals exclusively in abalone from California and Mexico. The average monthly gross, he said, is $42,000.
“Basically, all you have to do is find out what’s available from the fishermen or processing plants you represent, ask your clients what they want, and then bring the two sides together,” McQuillen said.
Shipping Arranged
“After that, you simply make shipping arrangements and earn your commission.”
Quite often, though, local seafood brokers double as importers. They purchase the fish themselves, from fishermen and processing plants around the world, and have it shipped directly to their own warehouses.
“Technically, a broker is someone who sells merchandise that is not his own, but in practicality, Southern California seafood brokers often buy and resell themselves,” said Maurice Camillo, head of the J.J. Camillo Seafood Brokerage Co. on the Embarcadero.
“So in the seafood business, when someone calls himself a broker, what he’s essentially saying is that he’s a wholesaler’s wholesaler; he’s the one who gets the fish into San Diego from wherever it’s caught.”
J.J. Camillo is the oldest seafood brokerage in San Diego County, and also one of the largest. The firm was started in 1934 by its namesake, Maurice’s late father, and currently grosses an average of $750,000 in sales each month.
The brokerage markets seafood from all over the world, including New Zealand, South America, Alaska, the East Coast and Florida. The five most popular types of seafood, Camillo said, are shrimp, swordfish, halibut, mahi-mahi and cod fillet products.
Commissions on brokered seafoods vary from 2% to 6%, he said, depending on the type of seafood and the amount of work that the broker must do.
“In general, the costlier the seafood, the lower the commission percentage,” said Camillo, who joined his father’s business in 1955 after graduating from San Diego State College (now University) with a bachelor’s degree in marketing.
Shrimp Commissions Lower
“Somebody who sells shrimp, for example, is going to make a smaller percentage than someone selling halibut, which costs roughly one-fourth to one-fifth as much,” he said.
Another factor in setting commission levels, added Steve Willis, president of Crest International of Old Town, is the services the broker provides in addition to the product.
“There are a lot of expenses involved in the seafood business,” Willis said. “There’s shipping, storage, interest on transport time and several kinds of insurance--including what we call ‘rejection insurance.’
“That means if the U.S. Food and Drug Administration for some reason denies entry to our product, we’ll be reimbursed for our losses.
“And how much of these expenses the broker pays determines, in large part, how big his commission percentage will be.”
Crest International has been in business nearly 30 years, Willis said, and currently brokers or imports an average of $3 million worth of frozen shrimp, crabs and lobsters each month.
“We work with private fishing companies, cooperatives and government organizations all over the world,” Willis said. “Among the countries we have dealt with are Mexico, Venezuela, Peru, Ecuador, Australia, New Zealand, New Guinea and Kuwait.”
Willis handles only frozen seafood, but in general the trend among San Diego seafood brokers is toward fresh fish.
“When I first got into this business more than 30 years ago, 90% of the fish we handled was frozen,” Camillo said. “Today, that percentage is down to 60% and getting smaller all the time.
“Once people try fresh seafood, they’re willing to pay more in shipping and handling, just for the taste.”
Handling Has Improved
At C.C. Seafood Products, where fresh seafood accounts for 90% of all sales, owner Casey said the growing popularity of fresh fish can be attributed to recent advances in both shipping and packaging.
“If properly packaged in plastic foam containers and refrigerant, fresh fish can have a shelf life of up to 14 days--a lot longer than anyone even thought was possible 20 years ago,” Casey said.
“And the airlines, too, are giving us better, faster and less expensive service all the time. They have found there’s good money in shipping perishables from various locations in the country and outside, and over the years they have become very accommodating.”
At the same time, Casey added, many Third World nations are developing educational programs for their fishing industries in such areas as sanitation, handling and packaging.
“As a result, we’re constantly getting better product and expanded markets, particularly in Central and South America.”
Overall, business is very good for San Diego’s school of fish brokers--and it’s getting better all the time, brokers say.
In the past two years, a number of well-publicized medical studies have shown the health benefits of seafood in fighting cholesterol and lowering the likelihood of heart disease.
“This business is wide open right now,” said Atlantic Pride’s McQuillen. “Everyone’s trying to stay away from fatty red meat, and more and more they’re turning to fish and other types of seafood.
“The divers I work with in Mexico have to go down 160 feet and more, just because the Baja California coast is practically fished out of abalone.
“Even so, the demand is growing all the time.”
Camillo said business has more than doubled in just the past five years.
“On a national basis, the average annual per capita consumption of seafood has grown from 9 pounds 10 years ago to more than 14 pounds today,” he said.
“And believe me, that’s good news for all of us!”
