“Business as usual” as Hilton’s closes purchase of Foppen

Huntingdon, United Kingdom-based multi-protein food business Hilton Food Group has finalized its purchase of the Dutch Seafood Company, the parent company of the Hardewijk, the Netherlands-headquartered smoked salmon supplier Foppen.

The EUR 90 million (USD 101.5 million) acquisition, which was first announced 10 December, 2021, was completed after receiving approval from the Dutch competition authority and the firm’s works council – the company’s equivalent to a labor union – according to a statement issued by the company to the London Stock Exchange, where it is listed. It gives Hilton Food Group control over Foppen, which had EUR 139.7 million (USD 157.7 million) in revenue in FY2021 and recorded an EBITDA of EUR 10 million (USD 11.3 million).

In interviews with SeafoodSource at the 2022 Seafood Expo North America in Boston, Massachusetts, U.S.A. on 15 March, brothers Remko and Wilbert Vedder, respectively Foppen’s U.S. sales director and chief commercial officer, said despite the company changing ownership twice in three years, it was “business as usual” at Foppen.

“We’re just focusing on what we need to do, which is sales and purchasing. We are very happy to go to Hilton, but it doesn’t matter that much who the owner is in terms of what we’re doing to be successful,” Remko Vedder said. “We didn’t have any problems or irritations through the whole change of ownership process. If we can do our thing, which is what we’ve been allowed to do, that’s the most-important [thing]. And we have been on the same page most of the time. We want to sell good and beautiful products in the U.S. [and] do innovative items, [and] that’s what every buyer wants and what the company wants too.”

At the 2019 Seafood Expo North America, the Vedders told SeafoodSource they were excited to pursue value-added opportunities with shrimp products, courtesy of the formation of the Dutch Seafood Company, which merged Foppen with shrimp specialist Klaas Puul. However, in December 2019, Sykes Seafood, an independent seafood supplier based in Manchester, England, purchased Dutch Seafood Company’s shrimp activities.

Now the Vedders are interested in expanding the sale of Foppen’s smoked salmon specialty products into Hilton’s network of retail partners, including Tesco and Woolworth’s.

“Hilton has a really wide spread around certain part of the world, with relationships with a lot of retailers,” Wilbert Vedder said. “We expect big things of that – in that way, we can expand our business.”

He confirmed Foppen is no longer selling any shrimp products.

“Now, our sole focus is on our specialty – smoked salmon,” he said.

In 2022, Foppen has introduced several new products, including hot smoked Atlantic salmon in three new flavors – spicy, garlic, and tomato. Wilbert Vedder said the company plans on doing more experimentation with new flavors, including testing seasonal items.

“Hot smoked is getting more and more important in the U.S., and we’re seeing our sales grow very rapidly due to the quality of our products."

Foppen has also introduced a flame-roasted cold-smoked salmon – a thick-sliced cold-smoked fillet that goes through open fire and gets charred on the outside – and a toast-sized Norwegian farmed product, added to its wild Alaska sockeye offering for people who avoid farmed fish.

“COVID has done a lot to change the American market and consumer tastes and preferences,” Remko Vedder said. “A lot of restaurants were closed or cut back their offerings, but we found people still wanted to eat good products and they were okay spending a little more money to do so. They were also willing to try new things that entice them. We think a lot of people got hooked on Foppen during the pandemic.”

Wilbert Vedder said the company was also trying to be more innovative and thoughtful in its packaging, aiming to make Foppen products visually appealing and easier to open and less messy.

“Packaging is very important for us, as it’s part of our philosophy that the whole experience with our products needs to be premium," he said. "From how the product looks and tastes to its usability, it all needs to be right to capture that premium market. We try to think about the details not everybody thinks about.”

As foodservice has recovered, Foppen has introduced new larger-sized packs scaled to the needs of that sector, Wilbert Vedder said.

“We wanted to do this three years ago but COVID pushed it back,” he said. “But we are going to aim our premium products at premium foodservice providers, like cruise lines.”

Another update for Foppen is its shift from GlobalG.A.P. to Aquaculture Stewardship Council certification for its sustainability certifications for its hot-smoked products, a step that was taken at the end of 2021.

“Sustainability is getting more and more important. Europe is ahead, and the U.S. is following. In both places, you’re not getting into a retailer anymore without ASC [certification], or [Marine Stewardship Council] for wild-caught salmon. Corporate buyers need to buy ASC – it’s in their buying requirements. The demand didn’t come so much from the consumer, but change has come because the consumer has become more aware and want to be well-informed. But we made that decision for our hot-smoked salmon because the retailers we work with won’t offer anything else,” Remko Vedder said.

Additionally, production of ASC salmon from Norway, where Foppen sources from, is more consistent than GlobalG.A.P.-certified salmon, Remko said.

“It’s important to have that stable quality and not deal with supplies that are up and down,” he said. “We work with selected suppliers and [sign] long-term contracts. That way, really high prices or low prices don’t benefit or hurt us because make our agreements in advance.”

On the retail side, Foppen is now selling in Loblaws in Canada and has seen growth in its sales in the Canadian market, Wilbert said, as well as in Mexico. And Foppen benefitted from the uptick in overall seafood sales the pandemic created in the U.S., where it sells at Costco and other retailers, with sales up amongst the company’s preexisting customers and with new customers as well, Wilbert said.

“We’ve had to increase our production in Greece to keep up [with demand],” he said. Foppen also operates a production facility in the Netherlands.

Health and convenience are two consumer trends driving higher consumption, especially in major U.S. metropolitan areas such as New York, Los Angeles, and San Francisco, where pricing is less of an issue, Wilbert said. And Foppen hits those targets with product that are visually appealing and require little to no preparation or cooking.

“Our products are ready to eat and they cannot mess it up in the kitchen,” he said.

While Foppen’s classic cold-smoked Atlantic salmon is a bestseller, the company is not letting up on innovation, Wilbert said. Retailers want products that are complementary to their existing offerings, even if those offerings are Foppen’s salmon, he said.

“You don’t want to bring in a product that will come at the cost of sales on another product. The goal is to grow the category, and these products are adding new sales, not cannibalizing existing sales,” Wilbert said.

Both Wilbert and Remkko said they were thrilled to be back doing business in person at Seafood Expo North America.

“We’ve been selling a lot in the COVID period, but to sit at a table with potential customers, show them our product, have them eat it and then have a talk about it, that’s what we personally really missed,” Remko said. “For the past two years, I’ve been behind desk all the time. I’m not made for that.”

Photo courtesy of Cliff White/Shutterstock