Sea Change

Seafood company goes from dockside to international with N.C. State’s help.

When asked how N.C. State University has made a difference to his family business over the years, Wanchese Fish Co.’s Sam Daniels answers quickly and definitively:  “N.C. State has put us on the map globally,” he says. “It’s pretty much changed our company, to get away from the fresh fish business our father started in the 1930s to become an international, value-added company.”

The company headquarters where he works is evidence of the transformation that has taken place since Wanchese began selling what it calls Scallop Medallions – a product that College of Agriculture and Life Sciences’ food scientists helped perfect in the late 1990s.

With a towering lobby and brick façade, the 240,000-square-foot state-of-the-art processing plant and cold storage facility in Suffolk, Va., stands in contrast to the company’s roots in a one-room fish house in the tiny Roanoke Island fishing village of Wanchese.

When Daniels’ father, Malcolm, started the company more than 70 years ago, there were probably fewer than 10 employees, Daniels says. But today, around 225 people work in the Suffolk facility and in plants in Hampton, Va., and Wanchese and Hatteras, N.C. The company is one of the nation’s largest suppliers of raw and prepared fish and shellfish, and it has international operations and sales.

All of Malcolm and Maude’s 15 children worked in the business from an early age. Sam, the youngest boy, and Mikey, the fifth born, both remember getting up at 4 a.m. – well before school started – to pack fish in Wanchese, then returning to the fish house after school to work until 10 at night.

In the company’s early years, the packaged fish went to a distribution company in Hampton. But in the 1950s and ’60s – as soon as some of the sons got old enough to drive the used trucks that Malcolm bought at auctions – the family began distributing their fish themselves to markets in New York, Philadelphia, Baltimore and Boston.
Fresh Atlantic flounder, by and large, was their niche.

“This is what our company was,” Sam says, “from day one until we started with the medallions.”
As Mikey puts it, the medallions “were our salvation.”

To tell the medallion story, Sam backs up to the early 1990s, when the federal government began setting quotas for fish.

“We used to fish 365 days a year for flounder. Well, all of a sudden they came in and said, ‘You are only going to fish but 90 days for flounder this year.’ It was 1993, I think,” Sam recalls. “We said, ‘Gosh, what are we doing to do?’ All we know is fishing. My whole family, it’s all we’ve ever done.”

Fortunately, a couple of Sam’s older brothers had seen the changes coming. Just as their father had bought used trucks and boats before, the Danielses bought an old boat, put a freezer on it and took it through the Panama Canal and up to Alaska, where the fishing season was longer.

“Then the same thing happened there with fishing regulations,” Sam adds. “They ran us out of there with only 30 or 40 days of fishing a year.”

As they considered ways to keep the company alive, the Danielses learned from the Virginia Institute of Marine Science that there were scallops off the coast of Uruguay. They retooled the boat, adding a shucking machine to separate the meat from the scallop shells, and sent it to Uruguay.

“The closer we got to Argentina, the bigger the scallops got and the more scallops we caught,” Sam says.

The Argentine government granted Wanchese a permit to fish in the shallow waters of the vast continental shelf off the country’s coast. Soon, the Danielses found themselves overwhelmed with more small sea scallops than they could sell.

One of the Daniels’ long-time employees, James Fletcher, called Dr. David Green, with N.C. State University’s Seafood Lab, for help. “We set up a taste test at the Duke Marine Lab with 100 people,” Green says, “and the flavor profile of the Argentine sea scallop was better than the mid-Atlantic sea scallop or the North Carolina bay scallop.”

Still, the company had a hard time selling the scallops because they were so small. It was around this time — in the mid-1990s — that Sam visited customers in Japan and decided to take in a seafood trade show. There, he found a vendor selling what he called a scallop patty — small scallops that had been formed into a single piece of meat, the way chicken pieces are made into nuggets.

Bingo, Sam thought: This kind of product could give the company a market for the small but tasty scallops it was harvesting off Argentina.

Sam brought home a sample and called upon Dr. Tyre Lanier, a CALS professor in what’s now known as the Department of Food, Bioprocessing and Nutrition Sciences. How, Sam asked, was the product made? And would it work with his scallops?

Lanier told him what he thought was binding the meat pieces together and pointed them toward a source. But, Sam says, Wanchese couldn’t get the binder to work.

So with a grant from the National Oceanic and Atmospheric Administration, Lanier and CALS graduate student Kim Baker compared ways to bind quarter- to half-inch wide scallops into larger, more marketable patties using two methods: One used a meat-derived binder; and the other, a microbial-derived enzyme, transglutaminase. The company now uses both methods, depending on consumer preference.

Most consumers couldn’t distinguish a formed scallop from a natural one, Lanier says.The binding process is one that other companies have tried but without the success of the Danielses. They attribute the difference and thus their dominance in the formed scallop industry to the superior taste of the Argentine scallop.

The product has proven so popular that Wanchese is able to sell 2.5 million pounds of medallions each year, some of them plain and others breaded or wrapped in hickory-smoked bacon. And by building the facilities to produce, package and store the medallions, the company has also been able to expand into new products from other types of fish and shellfish – croaker, tuna, sea robins, bluefish, shrimp and mackerel, among them.

As Sam put it, “We used to be a flounder king. We could catch them only 90 days a year then, and when the market gets saturated with them, we would take $.50 a pound for them — or whatever we had to take — whereas now we have opened another line of business. So now we can fillet that fish, freeze it and sell it along with our medallions. And our sea scallops that we catch off the mid-Atlantic coast — we freeze them and sell them.

“So we basically went from a fresh fish company, selling 90 percent fresh, to now today in 2010, we are doing probably 80 percent frozen sales and only 20 percent fresh. We can pick and choose our customers now,” he adds. “Up until the 1990s, we had only maybe 25 different items. Today we probably have 150 to 200 items we sell with different species of fish in all parts of the world.”

Given such success, it’s not surprising that Wanchese’s owners continue to look to N.C. State. In November, Green delivered Hazard Analysis and Critical Control Points food safety training to company employees, including third-generation family member Kristopher Daniels. And Lanier has continued to provide advice on food products ranging from surimi to tuna barbecue. As the company continues to explore diversification opportunities, such as basket crabs and shell oysters, Sam says, “Anytime that we don’t know what we are doing, or we need more technical information, we turn to these guys.”

–Dee Shore