By Lara Ozaki
Wholesale of meat and seafood is a consistent business on Guam, but niche market demand as well as increased tourism and military activity have distributors even more optimistic about their product lines and future growth.
Meats and seafood make up roughly 25–28% of Guam’s food and non-alcoholic beverage imports, totaling more than $80 million annually, according to calculations compiled from 2013–2015 Guam Import Data from the Bureau of Statistics and Plans.
“Our volume movers are moving faster than before. We can probably attribute that to increase in tourism,” says Noel Metra, sales manager and export manager of Micronesian Brokers Inc.
The United States ranked number one in meat consumption in a 2009 study by the Food and Agriculture Organization of the United Nations, which reported 120.2 pounds per capita of carcass mass availability per year. Guam wholesalers say they estimate that Guam consumption rates are as high, if not more.
“I’m sure it’s more here. When you go to fiestas you see a lot of meat and very little vegetables,” says
George Lai, president of Quality Distributors.
Wholesalers agree that both the local population and visitors seem to enjoy meats, especially barbecue, either at home or at restaurants.
“We love barbequing on Guam. I’d say practically every weekend, everyone gets their chairs and tables and tents for the weekend,” Metra says.
Tourism and military impact
Although meat and seafood demand generally remains consistent, it fluctuates with tourism arrivals, says James S. Herbert III, general manager of Triple J Five Star Wholesale Foods.
“Our sales are steady and growing. Tourism is a big driver for us,” he says.
Around 70% of Triple J’s clients are in food service, while the rest are retailers.
Metra says the increase of Korean tourist arrivals has increased the demand for imported meats, especially for short ribs and chicken.
“We can’t even keep up. We bring in a couple of cases and it’s gone within two weeks,” Metra says. “More of our business is in the hotel industry, so [tourism] really drives our business. Even if we lose some bids, there are other hotels in the Tumon area that we service.”
Herbert added, “Our business fluctuates also with military — with exercises like the Cape North, or the Carl Vinson [carrier strike group] porting.”
“The biggest seller on Guam is probably chicken,” says Keith Toy, purchasing manager of Triple J Five Star Wholesale Foods. Guam imported around $1.4 million per month in poultry between 2013–2015, according to calculations from available Guam Import Data from the Bureau of Statistics and Plans.
Chicken thighs and spare ribs are the most popular products for local barbecues, Metra says.
“Pork belly is also popular, but it’s very expensive these days,” says Hermie S. Queja, general manager of Micronesian Brokers Inc. “In fact, one of our suppliers was saying … they won’t be able to go out and buy more because the price would be too high and they’re afraid they won’t be able to sell it.”
According to the Guam Consumer Price Index published on Jan. 5 by the Bureau of Statistics and Plans, prices for beef decreased 4.2% in the fourth quarter of 2016 compared to fourth quarter 2015. Pork prices increased by 1.4%, while other meats decreased by 3.7%. Poultry prices dropped 1.6% compared to 4Q 2015, and fish and seafood decreased by 1.2% in 4Q 2016.
“Pork prices have dropped considerably this last year, compared to the year before [when supply was limited]because of the disease where the piglets were dying from diarrhea,” Toy says.
The Porcine Epidemic Diarrhea Virus was identified in the United States in April 2013 and significantly raised pork prices through 2014 and 2015. The virus killed more than seven million piglets in the year following discovery, and consumers paid nearly 13% more for pork at the supermarket in 2014 than in 2013, according to a report by the U.S. Department of Agriculture.
Although pork imports in total dollars are less than half that of beef or chicken, the volume imported is not small.
“It’s cheaper. For example, it could be like $1.50 per pound for pork compared to $5 per pound for beef,” Metra says.
However, chicken and ribs will remain the most popular in meat categories, Queja says.
“The only problem is that [the price of] chicken is now on the rise because of the avian flu. The recent worldwide outbreak is affecting the pricing, so we’re going to continue to see a price rise in chicken,” Queja says.
The price for shrimp has also risen due to production decrease by disease. The Early Mortality Syndrome affected giant tiger prawns and whiteleg shrimps in Asia, including China, Malaysia, Thailand and Vietnam, where a majority of Guam’s shrimp supply originate.
“That’s why shrimp is very expensive. You see some here but it’s expensive,” Queja says.
MBI primarily sources from mainland U.S. suppliers, though much of the seafood originates from Asia. Unless the company buys container loads, MBI does not buy directly from Asian suppliers.
Trends in demand
Because Guam is temperate year-round, food demands stay consistent for the most part, wholesalers say. Seasonality can be seen with increases in all categories from November through March during the holiday season, and a slight increase in seafood during the lent season from March to April.
“We’re bringing in more seafood right now with the lent season,” George Lai says.
Popular seafood items for Quality Distributors include fresh Atlantic salmon, live lobsters from Nova Scotia, sashimi-quality tuna, warm-water fish such as parrot fish, mahi mahi, basa, tilapia, milkfish, shrimp and prawns, oysters, clams, mussels and squid from New Zealand.
“I would like to see a wider variety of fish here on Guam, but we have to have the consumers to sell it to,” Herbert says. “It’s probably mainly pricing. Certain fish are more expensive. If you don’t have the volume to bring it by sea, you have to airfreight it, which adds additional costs. Most of what you see around here is mahi mahi, wahoo, basa.”
Quality Distributors is starting to bring in an increased variety of live seafood by air. The company has been supplying live lobsters for more than 20 years, Lai says, but has recently added live clams, oysters, crabs and mussels flown in from Asia, New Zealand and Australia.
“We’re testing the market right now. We’re bringing in some trial samples. That’s part of our goal this year, to start our live seafood program,” Lai says. He says he sees an increase in demand for higher quality products, especially from the tourist market.
“There’s a niche market for higher end. People are asking for better stuff, they’re willing to pay more,” Lai says. Although flying live seafood by air is much costlier than shipping, he says there is enough demand.
Quality Distributors is also focused on higher end beef products.
“Our number one now is our dry-aged Black Mountain angus beef, and we recently started doing the Japanese wagyu beef too,” Lai says. Quality Distributors has been distributing the Black Mountain brand for around two years but it has continued to grow.
“As [a seller], one of our challenges was to get chefs to put $100 steaks on their menu, but now that they have it on their menu, it turns out to be their best sellers,” Edson C. Lai, sales and marketing manager of Quality Distributors, says.
There’s a big misconception about angus, Toy says.
“Angus is not an indication of quality; it’s a breed. People are using the angus [name] — coat tailing it on Certified Angus Beef — they’re the ones owned by the American Angus Association,” he says.
Triple J has carried Certified Angus Beef for a while, and it remains a top seller, Herbert says. The Certified Angus Beef brand requires 10 specifications to qualify, including areas in marbling, maturity, size and appearance.
“I would say that the majority of people that claim to have an angus product have no specifications or don’t meet the same type of specifications as Certified Angus Beef,” Toy says.
Triple J ships its Certified Angus Beef chilled during its 14-day voyage at sea to age.
“The optimal beef aging is 28 days. You can keep it in chill as long as you keep it at the right temperature for 30 or 60 days,” Toy says.
Despite the growth in higher end meats, canned meats remain high volume sellers on Guam.
“Sales of canned meats is high. All you have to do is look at the space allocated to canned meats at the stores,” Queja says.
A survey for a particular customer for MBI showed the most demand for Ox and Palm corned beef, followed by Tulip, then Spam for the canned meat sector. Metra says the demand for canned meat has stayed consistent through many years.
George Lai says the Tulip brand has performed consistently well for Quality Distributors.
“The pork in Denmark is higher quality because of their environment than U.S. pork,” he says.
The most popular pork product is ribs, but Metra says the demand for whole pigs has grown, which are popular for local celebrations and at hotel buffets.
“We used to only bring in five or six and now we’re bringing in 60,” Metra says.
Queja says he thinks the reason may be because local pigs could be more expensive.
A surprising area of recent growth for MBI was with Eisenberg Sausage Co. hot dogs. When Market Wholesale closed its business, MBI picked up several of its brands, including the Eisenberg brand.
“Honestly I was never really into hot dogs, but when I tasted it, I was like, this is a really good tasting hot dog,” Queja says. He says he didn’t expect that brand to bring in so much business at first but was pleasantly surprised with the growth.
“It’s the official brand hot dog with the Chicago Cubs baseball team,” Queja says. “When we started, we didn’t think it was going to be that big, but boy, when we started marketing the product out there, before you know it there’s a lot of demand.”
The hot dogs were selling well but have grown further since MBI picked up the brand, he says. The Eisenberg hot dogs are available at convenience stores like Foody’s, movie theaters and schools such as the University of Guam and St. John’s School, but not in supermarkets.
Another potential area of growth in meats and seafood is the health-oriented and responsibly-sourced sectors.
“That’s already grown from 10 years ago, even five years ago,” Herbert says.
Quality Distributors plans on starting organic meats, as well as moving to increase buying from MSC certified and sustainable vendors.
“We do recognize it’s more expensive but there’s a niche market,” he says. He plans on attending an organic food convention held at Anaheim, Calif., in March.
Make way for more meats
“One of the things we started to do was provide storage space to some of the franchise restaurants like Beachin’ Shrimp and [California Pizza Kitchen]. It was Market Wholesale’s business before, but now our owners have made a conscious decision to open that up so we can store for more customers,” Queja says.
MBI moved its warehouse to a larger facility in September, taking over the former Pay-Less Supermarkets warehouse in Maite.
“Now we’re able to move from five different warehouses and we can work from one. We’ve been able to maximize the height of the building,” he says.
The company has remodeled the warehouse and rebuilt a larger loading dock.
“That has made the difference for us. Moving into a bigger freezer facility has allowed us to go out and do more business. We’re positioning ourselves to grow in that area. We just have to buy smarter,” Queja says.
MBI has also extended operation hours from 8 a.m. – 5 p.m. to 5 a.m. – midnight. with the facility move.
Quality Distributors is also increasing its chill space, by adding 10,000 square feet to its existing 20,000 square feet. George Lai, who has an engineering background, designed the facility, which is contracted with Z&P Builders and is scheduled to be completed by June.
The company has 50,000 square feet of dry warehouse space additionally. Lai says he thinks in terms of warehouse space, Quality Distributors is the largest.
Triple J also plans to expand warehouse space within the next year, Herbert says.
“We’re thinking of possibly moving to another space,” he says. “Basically our outlook for Guam is positive. There’s probably going to be some more chain restaurants coming in within the next year or two. As the number of restaurants grow, our business grows.”