Seafood/25″/mike1st/mark2nd

By DANIEL TAUB

Staff Reporter

Back in 1995, Crown Prince Inc. noticed that its core business canned sardines, kipper snacks, oysters and other specialty seafood was shrinking.

The City of Industry-based importer’s sales to mainstream grocers had essentially flattened, and one of its main customers, the U.S. government, had dramatically reduced its orders after a spate of military base closures.

To survive and grow, Crown Prince decided to get healthy or at least market its food that way.

“It was kind of a way for us to take advantage of a market no one had focused on before,” said Dustan Hoffman, vice president of the company.

“We said, ‘We’re good at what we do. Where can we take this?’ ”

Company executives realized that many of their products, such as boiled baby clams packed in water, already could pass as “healthy,” being low in fat and high in protein and iron. So when Crown Prince decided to reposition itself as a natural-food distributor, it didn’t make many changes to its product, which have been popular in mainstream grocery stores for decades.

It just repackaged them.

Some of the natural products such as the boiled clams and brisling sardines packed in olive oil are the same items that continue to be sold in Lucky and Ralphs stores, with the only difference being their labels.

For its “natural” line, Crown Prince replaced its standard boxes and cans featuring bold reds, yellows and greens, along with photographs of sardines, clams and oysters with packaging that would look more at home in health food stores. Bright colors gave way to pastel pinks, baby blues and sea greens; photographs of packed fish were replaced with drawings of sardines and herrings swimming in the ocean, surrounded by bubbles “touchy-feely” packaging, according to Hoffman.

Crown Prince also added to its labels such phrases as “excellent source of protein and calcium,” “low sodium” and “a fat-free food” also true of much of the company’s original line, but more important to health-food buyers.

Some of the natural products also were altered slightly to make them “clean” a health-food industry term meaning the products do not contain preservatives, additives, refined sugar and hydrogenated oil. For example, Crown Prince started packing its smoked oysters in olive oil, rather than cottonseed oil.

The strategy appears to be working. In the second half of 1996, when the company started selling its Crown Prince Natural line, it sold just 38,000 cans of “natural” sardines, tuna, salmon and other seafood. In 1997, “natural” seafood sales ballooned to 314,000 cans.

In the first quarter of 1998, Crown Prince sold 189,090 cans of its natural seafood, more than three times the amount sold in the like year-earlier quarter.

The Crown Prince Natural line, while representing the linchpin of the company’s future growth, is still in its infancy. It accounted for just 1 percent of Crown Prince’s total 1997 revenues, with the rest of the revenues coming from its mainstream canned seafood line.

Crown Prince was founded by Dustan Hoffman’s grandfather, Case Hoffman, in La Habra 50 years ago. The company remains family-owned, with Robert W. Hoffman, the founder’s son, serving as president. Three of the founder’s grandchildren, including Dustan, work at the 39-employee company.

Its facilities in the City of Industry are limited to offices and a distribution warehouse. The company buys its seafood from canneries in Norway, Southeast Asia, South America and Africa, where the fish are caught, canned and labeled, before being imported to the United States. Some minor re-labeling also is done at the company’s local warehouse.

A growing corner of the warehouse is devoted to the Crown Prince Natural line, which has struck a chord with grocery chain buyers.

“It’s been very successful,” said Annie Hunt, promotional director for grocery for Boulder, Colo.-based Wild Oats Community Market Inc., which operates health-food markets in California, Colorado, Oregon, Tennessee and Vancouver.

“It almost created the category, or gave us an opportunity to have the category without having stuff in we don’t like,” Hunt said. “(Most canned seafood products) either have preservatives in there or some oil that doesn’t make sense for our industry or our customer. So it filled a niche for us for sure.”

Mary Scott, executive editor of Natural Foods Merchandiser, a trade magazine covering the health-food industry, said consumer demand is strong for canned seafood because fresh fish is not always available.

“It’s still a very small percentage of natural food stores that have fresh seafood departments,” she said.

Michael McMurtry, a grocery buyer with Brea-based Nature’s Best Natural Food Distributors, which distributes health food to 1,700 stores in the western U.S. and Hawaii, said the Crown Prince brand is a marketing plus. Many health-food buyers, he said, grew up with products sold at mainstream grocery stores.

“Definitely the name Crown Prince has been recognized for decades as a name player in the canned-fish arena,” McMurtry said. “And with just the name recognition, it sells in the stores. I think just the name itself captures the customer’s eye.”

As sales of Crown Prince’s mainstream line remain flat and the health-food industry grows, Hoffman expects Crown Prince’s natural line to account for a growing part of the company’s sales.

“It is a long-term project, but we are the only ones to go after the market,” she said.