The Sitka Salmon Shares plant on Smith Street was nondescript, but its business model was innovative — selling seafood direct to consumers by subscription. Co-founder Marsh Skeele says the company has already had interest in purchasing its Sitka processing equipment. The company’s own product will be packaged by other processors across the state. (KCAW/Woolsey)

A Sitka seafood processor abruptly shut down on June 6, laying off about 40 people.

Sitka Salmon Shares helped pioneer the direct-to-consumer seafood market in Alaska, but the surge in growth the company experienced during the pandemic could not be sustained in the recovery.

Sitka Salmon Shares is not going out of business, but the decision to close its flagship plant represents a retooling of the company’s original business model to survive in the recovery economy.

Nationwide brands like Peloton and Zoom experienced a similar problem: Growth during the pandemic doesn’t continue during the recovery. The demand for quality, home-delivered seafood rose dramatically at the start of the pandemic, and dropped off just as suddenly near its end.

“We were expecting to be able to continue to kind of hold the same level of sales as last year,” said company co-founder Marsh Skeele, “and that just never materialized.”

Commercial troller Marsh Skeele co-founded Sitka Salmon Shares in 2011, along with a professor of Food Systems from Knox College, Nic Mink. 

Mink left the company last year, leaving Skeele the largest shareholder.

Marsh Skeele (l.) and Nic Mink, from the company’s website. Their collaboration at the founding of Salmon Shares was part academic exercise, and part serendipity. Although Mink moved on last year, Skeele believes Salmon Shares can move ahead, even with the loss of its Sitka plant. “I still believe in the company and what we can be in the future,” said Skeele, “…but right now it doesn’t feel great.”

About 40 people worked at the Sitka plant. Although staff had very short notice about the closure – three days – Skeele says that most of the line crew were re-employed quickly at Sitka’s other major processors. Human resources personnel were retained to help managers find new work. Skeele said it wasn’t practical to relocate people to the company’s operations in the lower 48. He says he’s feeling the loss especially hard, because he hired many Salmon Shares staff himself.

“We understood that it sucks to lose your job,” said Skeele. “They (employees) went out on a limb to come work for us. And we just wanted to have them land as quickly and gracefully as possible. So we tried to do what we could there.”

KCAW reached out to several mid-level staff for their reaction to the plant closure, and heard mostly conciliatory feelings on the issue. Sitka fleet manager Lauren Mitchell wrote, saying “The suddenness of the plant closure hit everyone pretty hard but I am proud to have been part of the Salmon Shares team for the last 2 seasons. It was an honor to work with such a dedicated group of fishermen who really care about the quality of their fish…. Overall, It was great while it lasted!”

Director of operations, Jacob Finsen, wrote “I am very grateful for the time I spent working with my team of processors, managers, and fisherfolk and hope that we all land softly.”

For consumers, the closure of the Sitka plant won’t mean significant change. The company’s retail footprint in the lower 48 was growing, even before the pandemic. And as Alaskan processors go, the Sitka facility was not very large. Skeele says the company’s growth was possible through partnerships with other processors willing to package fish under the Salmon Shares brand. And that’s not going away.

“All of our fish didn’t come from our plant in Sitka,” Skeele said. “It came from all around Alaska. And we built really great relationships with people that we trust to deliver quality, and to take good care of their fleet. So we’re excited to continue to benefit them.”

The marketing model for Sitka Salmon Shares is borrowed from farm-to-table agriculture. The company website profiles 25 family-owned fishing vessels which have a stake in the company, and supply product which can be traced directly back to them. That’s precisely how Sitka Salmon Shares started eleven years ago with Nic Mink and a couple of his Food Systems students packaging up fish landed by Skeele and another troller and shipping it to a small base of subscribers around Galesburg, Illinois, about three hours from Chicago.

The Sitka plant was an important part of preserving traceability, and Skeele says the company’s Kodiak fleet members will continue to offer traceable product. But the abrupt closure of the Sitka operation means that Salmon Shares is going to have to rely on its partnerships with other processors to maintain traceability – when it’s possible to do so.

“We’re still focused on on traceability, and most of our partners really can deliver that,” Skeele said. “There’s only some instances –Bristol Bay sockeye — or certain regions where it’s really hard to get fish to be traceable based on how the supply chain set up. Alot of our processes work with you. In Southeast they’ve change their processes, or we chose them because of their ability to deliver a traceable fish.”

TV clip, WQAD — Fresher fish from Alaska, direct to your dinner plate, thanks to a new and growing Galesburg company… Near Sitka, Alaska, fishing salmon out of the water is very common…

Sitka Salmon Shares began as something of a Cinderella story, as this 2013 clip from a WQAD television news report in the Quad Cities shows. The direct-to-consumer model was innovative then; Marsh Skeele says the model now is about resiliency. Sitka Salmon Shares built a marketplace of loyal customers who are “really into fish with a story,” he says, “where they know where it comes from.” With the closure of its Sitka plant, Salmon Shares is trimming its fixed costs, and shifting more production out-of-house, but Skeele is still looking ahead to the next part of the story.

“I still believe in the company and what we can be in the future,” he said. “And I still believe this marketplace can be beneficial for for the sector fleet and sector processors and, and the region and the state, and the fisheries in general. I think this could be a positive but right now it doesn’t feel great.”