Palladium Equity Partners’ acquisition of Coral Gables’, Florida, U.S.A.-based Quirch Foods in December 2018 has enabled the company to take a major step forward in its growth plan, an executive with Quirch’s seafood brand, Panamei, told SeafoodSource at the 2019 Seafood Expo North America.
Jorge Roza, Panamei Seafood’s marketing director, said Quirch, which had recorded USD 1 billion (EUR 880 million) in revenue in 2018 (in addition to seafood, it also sells beef, pork, poultry, and other products independent and ethnic grocers in the U.S. and Puerto Rico, U.S. national retailers, and Latin American export markets), will strategically leverage some of its investments to explore product innovation, including a value-added segment across all its markets.
“We asked ourselves, ‘How do we continue to grow?’” Roza said. “Quirch is a fifth-generation family-owned company, and the three brothers who were running the company until just recently decided to see what kind of value there was in bringing on a partner. They considered several investors but found Palladium Equity Partners to be very aligned with Quirch. They liked our success story as a family-owned, minority-owned group, food distribution business. The Quirch family saw that the new investors were willing to invest into the business and help get the company to the next level together.”
Roza said that, at the size Quirch had grown to, "it was challenging to sustain that growth when the business privately-run."
By bringing on a partner, it would attain the resources necessary to continue on its trajectory," he said.
The new ownership group has maintained a quiet, behind-the-scenes profile, allowing Quirch’s leadership to continue to drive the forward momentum they had established over the years, while still working closely with them to strategize for the future, according to Roza.
“The family feel is one of successes of our company, and Palladium wants to preserve that. They did not come in and change anything, – they knew our people were a big reason for our success. They just said they wanted to give us the resources and backing to continue to go out and look for more growth,” he said.
With the infusion of new resources, Quirch will now look at opportunities to acquire additional distributors to “hit the small pockets we’re not getting to or reaching right now,” Roza said.
“It takes money to grow and to continue operating efficiently, so a large part of the new resources will go towards that. And adding to that, it gives us opportunities to work strategically with experts to find out where growth opportunities are and to pursue those,” he said.
The Quirch family remain minority owners and are still engaged in the company’s affairs.
For its part, Panamei will be focused on potentially growing its value-added segment, Roza said. Roza lists shrimp, grouper, tilapia, swai, mahi, and tuna, as its most popular species, but he said there’s an unmistakable trend toward value-added in the marketplace.
“We cannot lose ground on that, and we actually hope to start gaining some,” he said. “This year, we’re seeing some other brands doing more value-added. So, we’re looking at what’s trending – what are the flavor profiles, packaging techniques … Basically, following what our consumers are asking us for.”
Those trends and customer desires are being driven by an effort to court millennial shoppers, who have a complex set of demands that are forcing seafood companies – including Panamei – to up their game, Roza said.
“Millennials see the need for something sustainable, and clean and quick to cook,” he said. “Value-added tends to be at a lower-price point, and sometimes that has meant sacrificing quality. We’re trying to find a middle ground where we don’t sacrifice quality, and we aren’t sacrificing our sustainability consciousness, and also has those ethnic flavors that millennials love and that fit into the predominantly Hispanic markets that we serve.”
Panamei currently serves a wide geographic area that includes the United States (with a focus on the Southeastern states), the Caribbean, Central and South America. The company operates distribution hubs in Miami and Orlando, Florida; Atlanta, Georgia; Chicago, Illinois; as well as in San Juan, Puerto Rico. Additionally, Panamei wants to expand further in Brazil, where it currently has a light footprint. It’s looking to explore some of the species available in that part of the world, Roza said.
Covering that large of a footprint – and expanding it, as is in Quirch’s plans post-investment – is not easy and not cheap, Roza said, especially given the company’s strategy of being “strong in-store.”
“It requires an investment to stay vigilant in all of those territories and to manage your brand there. Those are a lot of close one-on-one relationships with customers abroad, making sure they feel like we’re strong partners,” he said. “While we are always making an effort to build our presence in national stores, we don’t want to ever lose focus on independent grocers – that’s what got us where we are. But we are continuously striving to building a larger presence in national stores and we think our brand has enough of a variety that we can do both.”
While expansion is definitely in Panamei’s plans, Roza said the company wants to ensure it stays strong in Puerto Rico, where he said the company has a solid market share in frozen seafood.
“Puerto Rico is a very big market for us. Panamei is very connected to Puerto Rico. We want to continue to maintain that, and to do so, we’re making sure we put a little extra care in with our customers [there],” he said.
Roza said one of Panamei’s growth strategies are built on having a strong in-store presence.
“We invest a lot in material on shelves,” he said. “When you go into one of our customer’s stores, you’ll always see a good presentation of our products. We position Panamei as a program – we’re a brand that’s strong in shrimp, portions, fillets … As a retailer, when trying to fill your real estate with products, when you see one brand covering multiple categories, it’s a much simpler buy for them and we try to make our brand as attractive as possible to them.”
In sharpening its marketing message to its coveted millennial audience, Roza said Panamei has upped its social media game.
“We have more 22,000 followers on Facebook – and that’s a lot, considering not a lot of young people follow frozen seafood companies. But we’re always trying to think of how to get that audience to think about our food and brand as cool and worth following. And I think we’re having success with that,” Roza said. “Rather than spend big dollars on huge media buys, we’re going grassroots with our stories, and I think our customers really appreciate that.”
Under the continued leadership of Frank Grande, who has been in his president of Quirch Foods since 2014, Roza said the company is poised for future success.
“It’s an exciting time for us,” he said. “The Quirch’s worked very hard to put us in this position, and now, with Palladium’s help, we’re ready to take the next step.”
