Don Binotto, CEO of Contessa Premium Foods, sees potential to use market-driven incentives used in tuna over the last few years in shrimp, Contessa’s main product.
Binotto, one of the founding members of the International Seafood Sustainably Foundation (ISSF) in his days as CEO of Starkist, sees potential to apply some of these lessons in shrimp.
The founding of the ISSF -- which combines big industry names such as Starkist, Bumble Bee Foods, Chicken of the Sea, Tri Marine International, Princes and MW Brands, with WWF and marine biologists -- is one of the “proudest moments” of Binotto’s career, he told Undercurrent News.
ISSF was founded in 2008, before launching publicly in March 2009.
In his current role as CEO of Contessa, known primarily as a shrimp importer, Binotto plans to bring his experience of market-driven sustainably initiatives to the shrimp sector.
After taking over as CEO from John Blazevich after Contessa was bought from chapter 11 bankruptcy protection by private equity groups Sun Capital Partners and Main Street Capital Holdings in 2011, Binotto spent the first year on internal challenges, such as changing the company’s culture and shifting its sourcing strategy.
"It’s now time to take more of a leadership role on sustainability," he said.
“The challenges of sustainability in the shrimp industry may be different, but the goal is not. That’s to never compromise the resource for future generations,” he told Undercurrent.
“We hope we can lead in shrimp as we did in tuna. Right now, we are a small player and our voice has been very limited. You will not see that in the future,” said Binotto.
Contessa has joined the National Fisheries Institute (NFI) and is also in the process of joining the Shrimp Council, a US industry body for the import shrimp buying sector.
“As we get more involved in these industry forums, hopefully we can provide some leadership,” said Binotto. “I want us to be a leader in every group that we join.”
“We really need to establish a curriculum on shrimp sustainability. There are two areas that I really want to focus on. The first is the rules of processing. The second is the use of moisture retention agents (MRAs),” said Binotto.
“We are extremely proactive in what we go after. Are we going after the right things? I really want to get together with the industry and ask that.”
In terms of the rules of processing, Binotto wants to look at every stage, from the pond to the plant, and evaluate it, “just like we did with tuna”, he said.
“Although some would argue the use of MRAs is not an issue of sustainability, but it relates to the product, so I feel it is,” he said.
"It’s [the use of MRAs] different from company to company and is not as transparent as in the tuna industry, when we used various additives. The rules of using MRAs are very vague and that has to change.”
Contessa is also forming a social policy, in terms of what it expects from suppliers.
“We won’t do business with those that use child labor,” said Binotto, before acknowledging it is a “challenge in the industry, with the use of peeling sheds”.
However, this has to be addressed and tackled by market forces, he said.
The use of market-driven incentives for suppliers to improve practices is something the tuna business does “very well”, said Binotto.
“No-one was going to buy tuna from a group that was not performing best practices. If you did, if you were found buying fish on FADs [fish aggregating devices] when there was a FAD ban, of you were buying bigeye when it was beyond the quota, you would not be able to sell it,” he said.
“We [the ISSF member buyers] would then go to the retailers and insist that they don’t buy from a company that doesn’t stick to those principles,” he said.
“I think, as an industry, we can do the same thing on shrimp. To my knowledge, this [type of market-driven approach] is not being used,” he said.
This is where being a member of the Shrimp Council will help, “as it will allow an exchange of ideas and approaches like this”.
If the industry agrees on common principals, “no matter how big or small we are, then we go to the trade and say, ‘you cannot buy from these people who are packing the way they are packing’, it will have an influence”.
Benson raised one point on this, regarding the difference between tuna and shrimp.
“In tuna, there are three big players in the US, in shrimp, there must be 300 companies importing shrimp. So, it’s harder to get them all to the table and to agree,” he said.
Since Binotto took over as CEO, Contessa is pushing more on quality assurance (QA). The company has its own QA team in Asia to ensure the plants the company is sourcing from meet its standards.
“The key challenges are making sure shrimp farming follows key food safety and responsibility practices,” he said.
“I don’t know if other shrimp suppliers have their own QA team [at the source], but I do know that most use third parties,” he said.
In Binotto’s view, this part of the process is “too important to use third parties” for.
“My predecessor has QA in his facility, as he owned the plant,” said Binotto, in reference to the way Blazevich worked, owning a plant in Thailand.
Binotto has hired the “QA people that shared the same passions as I have for doing the right things for the new Contessa”, he said.
The old Contessa was sourcing from one plant in Thailand and “one and a half” in Vietnam, said Eddie Benson, the company’s sourcing director and formerly the top buying purchasing executive for Starkist.
Contessa is now sourcing from around 15 plants, “spread across Thailand and Vietnam”, said Benson.
The QA team overseas these plants, working with the farmers and looking into “drug residue monitoring, the use of probiotics, sustainable agriculture practices” and ensuring the plants meet Contessa’s suppler code of conduct on social issues, such as the use of child labor, said Binotto.
Putting aside market competition
Binotto is insistent that market driven sustainability incentives are the way to go, with companies involved putting aside competitive differences.
“Take the companies in the ISSF, they are some of the most aggressive, vicious competitors in the market. But, in those [ISSF] meetings, all that’s get put aside,” he said.
“When we got together as the ISSF, we never let politics or profits get in the way. When we went to the meetings, there was no talk of what was going on in the market place, just what was going on in the oceans.”
Chris Lischewski, CEO of Bumble Bee and chairman of the ISSF, deserves “enormous kudos for that”, said Binotto.
Lishcewski has “done a great job in chairing that organization and getting all these eclectic personalities together. I can’t tell you, in my entire career, there isn’t anything I am more proud of than being part of the ISSF”, he said.
Then, retailers bought into the idea and “embraced ISSF as we took it to market,” said Benson. “They [major US retailers such as Walmart and Kroger] now have policies where they will only buy from companies that use ISSF policies.”
Best practices were openly shared. “There was no hidden agenda. Take Renato Curto [CEO of Tri Marine], anything on fishing practices, they would share it. “It is truly amazing. When I go home at night and go to sleep I know our kids don’t have to worry that there will be no tuna in the sea.”
Contessa might even look to join ISSF again.
“We will get back involved. We are just getting to tuna again and are close to signing something big, in the next 30 days, he said, of an upcoming deal he declined to say more on."
“Once we get in there, we will look at a small company to join, as I think there is something we can bring, with my past in tuna.”