As a result of Phillips’ initial exploration of overseas sources in 1989, the corporation now imports 99 percent of its crabmeat from Asia.

As the global sustainability movement continues to gain momentum, a Maryland manufacturer has a compelling story to tell. Phillips Foods and Seafood Restaurants is a company steeped in tradition. Four generations after AE Phillips started his crab production facility on Hoopers Island, Md., in 1914, the privately held, family owned Phillips Foods has grown to be a global enterprise.

Phillips Foods has grown immensely from its humble beginnings, and today has restaurants throughout the mid-Atlantic region and sells pasteurized crabmeat, crab cakes and crab chowder in restaurants, supermarkets and through food distributors across the United States and more recently to global markets. For more than half a century, Phillips Foods depended on Maryland’s Chesapeake Bay for its crabmeat – until the blue crab population began to seriously dwindle in the 1980s.

The unreliability of the Chesapeake Bay’s crab harvest and seasonality was having an impact on Phillips Foods’ ability to supply its product year-round. Its livelihood depended on blue crab meat, so CEO Steve Phillips began to look abroad for new markets.

As a result of Phillips’ initial exploration of overseas sources in 1989, the corporation now imports 99 percent of its crabmeat from Asia. The company has established seafood processing and pasteurizing plants overseas, manned by 10,000 employees in places like Thailand, Indonesia, Malaysia, India, the Philippines, Mexico and Ecuador. Phillips Foods has also diversified its sourcing of fish products to include not just crab but also tuna, grouper, snapper, shrimp and mahi-mahi. By diversifying its product line and ramping up its retail efforts, it has seen revenues increase more than 1,000 percent since 1996.

Although Phillips Foods’ success is now intertwined with global fisheries, it has not turned its back on its historic relationship with the Chesapeake Bay. Once teeming with oysters, crab and fin fish, the Chesapeake Bay was the center of life for many creatures.

It was its depletion that drove Phillips to seek worldwide resources for blue swimming crab, as well as to commit to bring back the resource in Chesapeake Bay and prevent depletion of blue crab populations around the world. Phillips Foods has donated several hundred thousand dollars and thousands of hours of scientific experts’ time to the University of Maryland Biotechnology Institute for its crab hatchery and restocking program. The company also provided seed money to start the program, and continues to support it with funds and personnel to ensure continued research on the blue crab, with a focus on Chesapeake Bay.

Although the fish have been plentiful in Southeast Asia, it is no small feat to get crabmeat picked, transported to the processing plants and pasteurized for export to the United States, Europe and other parts of Asia. Crab products are steamed in the plants and the meat is  extracted, pasteurized and canned before being shipped to the company’s sales regions around the globe. Phillips Foods has a well-mapped-out cold-chain logistics system, which enables it to control quality throughout the entire process.

The United States is Phillips Foods’ strongest base of business, but the company has spent the last five years focusing on growing sales on a global basis, as well. With sales offices in the United States, Europe and Asia, Phillips Foods has developed a sales strategy that, for example, targets large hotel chains in Asia that focus on a safe, dependable supply of quality products. Additionally, many of those chefs are American- and EU-trained, and therefore they have a familiarity with crab.

There are always external factors that can disrupt the business, as the company painfully witnessed with the 2004 tsunami, which devastated some its “mini-plants” in Indonesia, Thailand and India. These small facilities employ 20 to 40 people close to the ocean where crab meat is initially cooked and extracted before being shipped on ice to the larger processing plants. Many of the fishermen that supply the fish lost everything, including their fishing boats, in the tsunami.