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Performance Foodservice Turns to Imports to Replace Shrimp Lost in Oil Spill

MIAMI (June 24, 2010 - Miami Herald)—In a 40-degree warehouse near the Opa-locka Airport, dozens of bundled-up workers forklift boxes of food destined for restaurants and hotels in 38 countries.

In a normal year, the workers unload more than 1 million pounds of shrimp. But since the Deepwater Horizon spill started gushing oil into the Gulf of Mexico, Miami-based Performance Foodservice-Empire has dealt with increasing amounts of farm-raised shrimp from overseas and less freshwater shrimp from the Gulf. Prior to the spill, farm-raised shrimp made up 5 percent of its business, while wild shrimp made up 1 percent. Now, that 1 percent is shrinking.

"The customer needs something to put on their plate, so it's coming from other sources,'' said Luis A. Parga, president of Performance Foodservice-Empire, formerly known as Empire Seafood. Today it is part of Performance Food Group, the third largest food distributor in the United States, according to Technomic's 2008 Power Distributors list.

Other seafood distributors are facing a similar shift. As docks along the Louisiana coast close, Gulf shrimp processors said they are seeing a quarter of the shrimp they did this time last year. That forces distributors such as Performance to buy from overseas processors in countries such as Indonesia, Ecuador and Thailand. Performance's competitors, such as Sysco Corp. and U.S. Foodservice, are also finding less Gulf shrimp available.

Because of the small shrimp supply two weeks ago, imported shrimp prices increased 13 percent, while Gulf shrimp prices spiked 43 percent, said Gavin Gibbons, a spokesman for the National Fisheries Institute.

Normally, in the warm-water market, the U.S. imports 1.2 billion pounds of shrimp and consumes about 200 million pounds of Gulf shrimp. This year, the number of Gulf shrimp is sure to drop, Gibbons said, pushing the import total even`The customer needs something to put on their plate, so it's coming from other sources.'

That shift is more than just business for Parga. Over the years, he's built relationships with Gulf suppliers such as C.F. Gollott & Son Seafood in D'Iberville, Miss., an 87-year-old processing firm. His company calls the Gollotts weekly.

"I'm concerned about them and their families and I hope they keep doing what they're doing,'' he said.

Meanwhile, Parga has bought more shrimp from processors such as Thailand-based C.P. Foods. That company wasn't prepared for the amount of demand this May and has completely drained its inventory, said Wennie Chen, vice president of C.P. Foods commodity shrimp sales, who is based in Baltimore.

In April, U.S. shrimp imported from Thailand jumped 37 percent in pounds from March, according to the U.S. Department of Agriculture.

Despite her booming business, Chen frets about the long-term consequences of replacing U.S. shrimp with her Thai imports.

"I'm a little worried about how this industry is going to recover,'' she said. "It will take longer than everybody expected.'' She fears imported shrimp is too small in size to ever substitute Gulf shrimp.

The Gollotts share her concern. The Gulf shrimp processors have battled to distinguish their plump shrimp from the smaller, less regulated fare from countries such as China and Thailand, Arny Gollott III said. But, unlike C.F. Gollott & Son Seafood, many Gulf processors have switched to processing overseas shrimp.

"It's almost like sleeping with the enemy,'' Gollott III said. His company continues to buy Gulf shrimp at prices anywhere from 50 to 100 percent higher than last year's prices. That price has been passed onto buyers such as Performance.

Performance Food Group has also bought imported shrimp for decades. At Parga's Opa-locka office, some of its 125 employees stream news of the oil spill on their computers. But they're more concerned about the environmental impact of the spill than any potential impact to their jobs, Parga said.

"They know we have the resources to source products from all over the globe,'' he said.

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