High salmon prices, soaring inflation and the fallout from the Covid pandemic have battered businesses throughout the fisheries sector. Staal Smokehouse is no different.
However, while most people would think that the rising salmon prices, post-Covid fallout or rising inflation are the biggest challenges facing the industry but, for Staal Smokehouse, in Hull, England, one of the largest hurdles is staffing levels.
“Its incredibly hard to find the right people, the right reliable people to fit into this family and that’s being mirrored across the hospitality industry,” Justin Staal said.
“It’s up there as a major hurdle that we somehow have to overcome but it is incredibly hard, as we’re in the middle of a rural community,” Staal added, warning it will limit growth until it can be addressed.
“You need a special type of person but it’s really hard and it’s mirrored everywhere. That is probably my biggest headache. The biggest choke point on the business,” he explained.
e-commerce is the key to surviving the storm
Which Staal having started the smokehouse over a decade ago, he has guided his business through a number of challenges.
When the Covid pandemic hit, it was initially a shock to the system for Staal, as he feared that it would be the “biggest hurdle” they have faced so far and could “break us.” The restaurants closed overnight putting 50% of their business at risk.
While traditional revenue streams ran into trouble, Staal turned his focus to growing the smokehouse’s e-commerce side. The company took advantage of its “quite modern” and “fairly slick” website, offering free delivery within 30 miles and sparking a “massive surge” in sales from people who were stuck at home in lockdown.
“We survived and we survived really well,” Staal highlighted, finding that the cash flow from direct e-commerce sales was “absolutely phenomenal” with “people paying upfront.” “We were getting the best margins we could for products…our overheads were slashed,” citing the key benefits of running an online business.
Whole new set of hurdles
“You spend your life thinking you’re onto a winner and then another hurdle comes,” Staal stated, referencing the latest string of issues hitting the smokehouse and others in the industry.
The salmon price spiked early this year, soaring to extraordinary levels and putting pressure on suppliers throughout the sector, including smokehouses.
“We saw the first price hike in February,” Staal revealed, as their fish supplier started to feel the squeeze and other costs began to rise. His business was forced to pass on the “massive hike” in production costs on to customers putting pressure on their “incredibly tight” margins.
Despite being forced to raise their prices, Staal found customers stayed loyal to his business, recognising that it wasn’t a choice and everybody was hiking their prices. “Because it was a collective thing across the board for so many producers, I don’t think people felt like they were having their leg lifted.”
Salmon remains popular despite price rise
“That raw product price is brutal,” Justin Staal, who started the business in 2011 revealed. Across every part of the business, whether it’s the fish, packaging, raw materials or fuel that fills delivery vehicles, “margins are being very heavily pinched.”
Staal Smokehouse produces multiple types of fish, including salmon, trout, haddock, kippers and mackerel, witnessing fluctuations in demand for different products. However, despite the pressure on prices, salmon sales continue to make up 80 percent of the smokehouse’s business.
“We are certainly seeing people going ‘right, we’re going to change our menus to perhaps make mackrel’ and we’ve seen a big increase in demand for that…but people are still persisting with salmon,” Staal said.
“What was a commodity is now an expensive commodity but I think it comes down to the quality of the product…ultimately that is what they want on the menu,” Staal added.