Trends, February 2006

School lunch program a tough sell for seafood

But low-fat fried-fish products that appeal to kids are winning over budget-conscious school boards

By Lauren Kramer

Bill Stride was in a quandary just a few months ago. The president of Good Harbor Fillet Co. of Gloucester, Mass., was deeply frustrated with his efforts to bid for and supply seafood products to the National School Lunch Program.

Good Harbor was also experiencing financial strain and filed for Chapter 11 bankruptcy last summer, which Stride says was a reorganization strategy to deal with overruns and late delivery of the company’s new 67,500 square-foot processing facility. The company exited bankruptcy on Nov. 1, 2005 and is now “recapitalized and healthy” says Stride.

It also has a new tool to use in landing contracts with the NSLP, which provides federal assistance to more than 100,000 schools and residential childcare institutions, serving meals to more than 29 million school children daily.

Proteus Industries, also of Gloucester, has developed a protein-coating system that thwarts the absorption of oil when a fish portion is being fried but retains the meat’s moisture. The system has garnered a fair amount of attention since it was introduced last year.

In fact, the fat-busting technology was highlighted in the Oct. 24 issue of Time magazine in an article titled “5 new things that will blow your mind.”

“All our products contain zero trans fats, but this protein technology allows us to provide school lunch seafood portions that are significantly lower in fat than the standard products,” says Stride.

The process is used on the company’s Nautical Nibblers and Fun Shapes, formed as stars, fish and anchors.

The Proteus coating is a notable breakthrough for seafood in the school lunch market, says Stride.

“This isn’t a profitable market,” he notes, “and that’s one of the reasons there hasn’t been more innovation in the provision of seafood to school cafeterias. The competitive nature of the bidding process drives the margin down, which prevents product development.”

But Stride believes the new protein-coating technology “will give us an edge, as child obesity is a big issue and a significant concern in the National School Lunch Program today.”

Mike Kater, director of military and school sales at Trident Seafood, agrees.

“There’s a trend in the school industry where they’re looking at fat more intensely,” he says. “Trident cooks all their products in non-hydrogenated oil, which means that most of our portions have zero trans fat.

“Since the school industry is taking a hard look at fried foods and fat, we’ll be addressing these concerns in the future and trying to find out what we can do to further reduce the fat content in our process.”

The problem, says Kater, is that frying fish is what gives the product an appealing taste.

“One of our issues is, how do we make our product healthy, but still tasty and economical? Today, kids have so many choices for school lunches — pizza, hot dogs, chicken nuggets or fish. If our seafood products aren’t tasty and economical, you’ll see fish usage continue to be less and less in schools.”

It’s a problem Stride encountered when he first became involved with the school system eight years ago.

“We spent time in school cafeterias and noticed product being taken from the trays to the trash cans,” he recalls.

Questioning school foodservice directors about their kids’ favorite foods, he learned their most popular meals were pizza and French fries.

He wasted no time developing coating systems for his fried fish that smelled like French fries and pizza when cooked.

“The coating systems were more expensive, and we had to charge a premium for the product, but we got kids eating more fish,” he said. “We basically just flavored the coating systems to make the taste more familiar and set off the aroma in the cafeteria to get kids thinking about hunger and food.”

Good Harbor Fillet has made great inroads when it comes to kids and seafood. The company’s Potato Crunch and Parmesan Portion remain popular, as do the shaped fish products.

“We’ve had a positive response in retail and foodservice to these higher-end, fun-shaped products,” reports Stride. “So one thing we’re finding is that people are willing to spend more money for innovative, high-quality products — even in the National School Lunch Program, where costs are a significant factor.”

Meanwhile, Trident has seen little or no growth in the amount of seafood it supplies to the NSLP.

“In order to compete in the school industry, you have to be price sensitive, and it’s very competitive,” Kater says.

“For us to compete, we have to work on low margins or find more innovative types of products to sell to the school industry.

“But it’s a very price-sensitive industry, so even if you have a great product, if the school board can’t afford it, they won’t take it.”

The positive reception of the protein-coating technology means Good Harbor can charge a 15 percent premium for its reduced-fat product. The NSLP was so impressed that it found the funds to pay for it.

First to jump on the bandwagon was the South Carolina school system. Since then, Maryland, Georgia, Ohio and Texas have signed on.

“There’s nothing comparable to what we’re producing – basically, a superior-quality product with a substantially lower fat content,” Stride says. “It’s extremely encouraging, as we invested three years’ work and spent quite a bit of money creating this coating technology.

“The significant aspect of its having been adopted first into the school lunch program is that the value of this technology is being recognized, and even government agencies are willing to pay more for the innovation and health benefits,” he says.

“To me, that indicates a willingness to support truly innovative products in the marketplace, which will ultimately create that margin that has been missing in the past, allowing for reinvestment in the National School Lunch Program.

“The goal ultimately has to be to create a nation of seafood lovers, and that can all begin in the school lunch program.”

Contributing Editor Lauren Kramer lives in British Columbia