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Small Fish, Big-Box Stores

Ohana Seafoods reaches the big-box market through hands-on product refinement.

DEEP ROOTS: Julie Percell (left) teaches an entrepreneurship class at Kapiolani Community College. Ninety percent of the students in "Start Your Dream" are part-Hawaiian.
 - Photos by Karin Kovalsky

On almost any weekend, you can find Jeffrey Yee, owner of Ohana Seafoods, at a farmers market. Stationed behind a folding table, dressed in a T-shirt and shorts, the gregarious Yee warmly greets each customer and runs down his selection of ready-to-cook fish, like his miso butterfish, Korean-style saba and black-bean-sauce salmon. Yee might look like he is angling for his first big break. He’s not.

Yee’s marinated, ready-to-cook fish products line shelves at big-box stores such as Costco and large stores such as Japanese retailers Marukai and Don Quijote. So why is he spending his weekends behind a folding table at a farmers’ market? The markets give Yee direct contact with his customers. They’re his focus groups. “I can get feedback quickly, about what they like and don’t like,” he says. A returned product from a larger account might come with little information.

And that kind of product refinement, from portion size to fine-tuning the tastes, is exactly why the big-box stores discovered him in the first place and is likely what’s keeping him there in a very fickle industry.

By maintaining face-to-face contact with customers, he is also keeping in touch with his humble beginnings. In 1996, Yee began selling packages of miso butterfish out of ice chests at craft fairs while his wife, Debby, sold her line of hand-painted clothing. It was a family affair as the Yees promoted their vastly different products side-by-side at craft fairs such as those at Manoa Elementary School and McKinley High School.

After getting a good initial response on its miso butterfish, Yee continued to promote Ohana Seafoods at fairs and shows like the Food & New Products Show. Yee, a commercial fisherman since 1975 and a former supplier of fish for wholesale and retail markets, says he was also lucky that his boss at the time, Diamond Head Seafood owner Mike Irish, allowed him to use Diamond Head’s facility to prepare the butterfish after hours and store it. “That was one of the big breaks in the business,” Yee says.
In 1997, through contacts at Diamond Head Seafood, Ohana Seafoods landed its first big account: Marukai wasn’t happy with its miso butterfish supplier. So Marukai asked Ohana Seafoods to fill the spot and soon after Yee was a staple in Marukai’s bentos.

Yee’s other accounts also found him, not the other way around. About five years ago, Costco discovered Ohana Seafoods’ products at the Made in Hawaii Festival. Meanwhile, Star Market heard about Ohana and tracked him down, too. “You do need some luck,” Yee says with a smile.

Or perhaps a research-refined, high-quality product makes luck.

In 1997, Ohana Seafoods saw gross revenues of $300,000. Business grew gradually and by 2003, gross revenues had reached $650,000. Yee declined to give current figures, but says he aims for 15 percent to 20 percent growth next year. He also declined to give his production numbers.

But Yee is clearly thriving, though he is taking nothing for granted. “Buyers for the stores can always change,” he says. “Or their friend may have moved and begun distributing something else - or a store could decide, ‘We don’t want to carry that type of product anymore.’” He speaks from experience, having lost one large account for a time before winning it back for similar reasons.

When asked about growing his business, Yee pauses, and his answer is more philosophical than gung-ho. “We would like to grow a little more,” he says. He would like to take on more accounts, provided they are large enough to make the effort worthwhile.

Ohana Seafoods’ sauces are slowly gaining popularity, but Yee can’t imagine the sauces ever accounting for the majority of sales. Currently, sales of the 12-ounce bottles of Korean Style, Teriyaki Miso, which are $5 each, and Miso & Black Bean, $6, account for less than 20 percent of the business. Fish ranges in price from $10 to $13 for a container between 1.25 to 1.5 pounds, depending on the fish and type of seasoning. Fish contributes more to gross sales, but the profit margin is greater on the sauce, Yee says.

The farmers markets give Yee direct contact with his customers. They're his focus groups.
The company’s facility on Sand Island Access Road is only about 1,100 square feet and consists primarily of a preparation room and an adjoining cold-storage room (the sauces are prepared at a kitchen off-site). Yee says the facility can accommodate more business, but he would have to hire more people with longer shifts.

Currently - and surprisingly - he has only three part-time workers and a driver. Yee does the rest of the work, and his schedule reflects that. During the week, on average, he works 12 hours a day, starting at 5:30 a.m. Saturdays start even earlier, at 4:30 a.m., to load for the Kapiolani Community College farmers’ market and the work lasts well into the afternoon. Sundays are taken up by the farmers’ market at Manoa Marketplace and preparing orders for Costco.

Initially, Yee started Ohana Seafoods because it gave him more flexibility than the wholesale market. But now that the business has grown, he’s much busier. Much of his time is spent preparing for or selling at the farmers’ markets. Yee even travels to the Big Island and Kauai twice a year to participate in markets there.

Yee also still does the Made in Hawaii Festival, with the help of family members. Sometimes even his kids’ friends pitch in for the amiable Yee, who can rattle off the names of several more fairs where he sets up a booth. Fairs, though, account for only about 10 percent of his sales, he says. The fairs are more for research and marketing and for Yee to really enjoy the business he has built.

One of five sons of the former state legislator Wadsworth Yee, he’s a people person. The markets let the usually shy Yee show a more outgoing side of his personality.

“The markets and fairs bring it out,” he says.

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