The 8 Disasters That Struck The US Tuna Market

The past year and more could be described as somewhat disastrous for the US tuna market, with a long list of significant challenges that struck the sector. Was this the toughest year for American tuna yet? For sure! And here’s exactly why:

#1: The Collapsed Thai Union/BB Mega Merger

Set to be the biggest mega merger to hit the global tuna industry ever, Thai Union announced massive plans to buy Bumble Bee Foods from Lion Capital for USD 1.5 billion in December 2014.

The news hit headlines globally, and the deal would have given TU a huge 40+ percent dollar share of the US shelf stable tuna market, if it also kept its Chicken of the Sea brand. However, a year later the deal totally fell through.

Despite TU announcing that it would sell off at least part of COS if it got hold of BB, it became clear that a US antitrust watchdog would not approve the deal. Shortly after, Thai Union reached an agreement with Lion Capital to mutually terminate the acquisition.

#2: The Price Fixing Conspiracy

The planned mega merger sparked an anti-trust investigation into price fixing on the US shelf stable seafood market, following concerns from the government that the COS/BB deal would give one company too much of a dominant market share.

It’s believed that one of the Big 3 tuna brands has acted as a whistle blower, informing authorities of price fixing activity in an attempt to gain itself immunity from any resulting case. To this date, most bets have been put on COS’ owning firm, Thai Union, as being the informer.

The price fixing lawsuits have been piling up, with filings from consumers to grocery chains, which all accuse the US Big 3 tuna brands, StarKist, COS and BB, and also their main supplier, Tri Marine, of conspiring to fix prices artificially high.

#3: The Underfilling Accusations

These haven’t been the only legal claims made in regards to the US canned tuna market during the past year, as both brands and retailers have been accused of underfilling their cans, below the federally stated minimum weight.

Throughout all of the pending cases, plaintiffs have stated that government laboratory tests have revealed the results.

The first case to come to light was against StarKist, and was set to end in a settlement in which the brand paid out USD 12 million in compensation to consumers. StarKist received the highest amount of claimants that have come forward in a single class action lawsuit in the world.

However, it was recently ruled by a US judge that the settlement will be dismissed because it is simply too broad and vague, and could extend beyond matters related to underfilling.

Retailers Safeway and Trader Joe’s have also come into the picture, with claims that their private label canned tuna products have also been underfilled. Wild Planet, with its own-name brand and Sustainable Seas brand has been brought into the firing line too.

In some of the cases, the tuna in the cans has been found to weigh 30 percent less than it should.

#4: The Stinging Greenpeace Campaign

As well as legal pressures, top US canned tuna brands have been facing environmental pressures too this year, with Greenpeace having launched a heavy campaign against Thai Union’s Chicken of the Sea brand throughout 2015, which has been littered across social media and international press.

With slogans like ‘Rippin up the Sea’ and ‘Not just Tuna’, the NGO protested outside COS offices, claiming that the brand was using unsustainable and destructive fishing methods.

Greenpeace called for a consumer and investor boycott of all branded canned tuna that came under the Thai Union umbrella, and hasn’t given up on mounting pressure on the Thai processor yet.

Furthermore, not just COS, but also the other US big 3 tuna brands, were placed among the bottom four US tuna brands in a recent “Tuna Shopping Guide” compiled by Greenpeace.

Among 14 different brands and private labels, the Big 3 were pulled up on using unsustainable fishing methods that generate high bycatch, for not giving information on origin of catch, and other issues.

#5: The Shrinkflation Trend

Not only has attention been drawn towards the environmental status of US canned tuna, but also to quality and price, as product size gets smaller. While 6oz cans were commonly available in the country a few years back, the 5oz size now appears to be the norm.

Sustainable Seas, a US brand owned by Wild Planet, even lists canned tuna products on its website that are just 4.1oz in net weight.

This trend has commonly been termed “shrinkflation”, and has been described by consumer associations as an underhand way of increasing prices; as the pack size shrinks, the prices don’t.

#6: The Rise Of “Fake Tuna”

All of these trends, including the recently emerging increase of Eurthynnus Affinis and other tuna-like species imports in the US market, have at various times over the last year been linked to a declining demand for canned tuna in the US.

Statistics suggest that other bonito-type tuna species are being purchased by US buyers, namely in the food service segment, to be canned as Chunk Light tuna, which more traditionally refers to skipjack or tongol.

While also being cheaper to buy, imports of these species are levied with a much lower tariff than more common Chunk Light tuna species.

#7: The Emergence Of “Tuna Soup”

The declining quality of canned tuna on the US market has caused consumer perception to heavily drop, as young Americans in particular seem to be losing their taste for the product. As leading brands think the focus should be put into making tuna more relevant and convenient, many believe the quality issue must be addressed.

US importers have said that the younger generation has forgotten about canned tuna, and when they do open the product, are generally unimpressed by what they get.

In a country where obesity is at crisis point, and where canned tuna consumption has declined, there has also been an emergence of “tuna soup”, or Chunk Light canned tuna pumped with additives like hydrolyzed proteins. Bumble Bee even outlined the difference between its “soupy” Chunk Light and “steaky” albacore canned tuna in a recent video promotion, which it states was to inform consumers that there is a difference in quality between the products.

#8: The Contaminated Tuna Recall

One of the most recent issues to hit the US shelf stable tuna market was the recall of around two million cans off supermarket shelves by both COS and BB.

A fault in COS’ Georgia based processing plant caused concerns over contamination in the products, and the possibility for them to be life threatening if consumed. BB announced its recall first, with COS managing to come in under its shadow the following day, when the news had already hit US and international press.

Despite the fault lying with COS, Thai Union, its owning firm, has taken little hit from the recall. The company said it was not concerned about the incident effecting its earnings, as it was completely covered by insurance.

Taking all of these issues into account, it’s clear to see that 2015 was a year of considerable challenges for the US tuna sector. The question now is will brands and retailers be able to deal with these disasters and turn the market around, and can they regain trust from some of their lost consumers?