1. HOME
  2.  | 
  3. Industry
  4.  | 
  5. Alaska Native
  6.  | Sold on Retail: Customer-facing brands of Alaska Native corporations

Sold on Retail: Customer-facing brands of Alaska Native corporations

by | Aug 19, 2024 | Alaska Native, Magazine, Retail

Photo Credit: Camaralenta | iStock

As a result of the Alaska Native Claims Settlement Act (ANCSA) of 1971, the richest opportunities for Alaska Native corporations have typically come in the form of government contracting, construction, resource development, and other land-based industries. And those opportunities have been rich: regional and village corporations—such as Bering Straits Native Corporation (BSNC), Bristol Bay Native Corporation (BBNC), and Afognak Native Corporation—cumulatively account for almost 17 percent of Alaska’s annual gross domestic product, according to the ANCSA Regional Association’s 2017 Economic Report.

While major revenues have flowed from land-based opportunities both in Alaska and the Lower 48, some ANCSA corporations have invested in brands that everyday customers might recognize. With retail businesses like Alaska Industrial Hardware (AIH) and Brown Jug liquor, parent companies BSNC and Afognak have diversified their investments while also creating stronger ties to their communities.

The Benefits of Retail

Venturing into a new industry comes with its own risks. Especially in Alaska, supply chain issues and staffing availability can pose challenges to retail ventures. But for ANCSA corporations that choose to acquire or open retail stores, the benefits often outweigh the risks.

When BSNC acquired Alaska Industrial Hardware in 2015, it did so after a year-long evaluation of the opportunities and benefits of the acquisition. “BSNC determined Alaska Industrial Hardware was a solid, Alaskan-owned company that fit well with [our] growing portfolio of companies,” says Ana Grayson, BSNC associate communications director.

Prior to that acquisition, BSNC had launched a car rental service in Nome. Together with the Aurora Executive Inn and Suites, Stampede Vehicle Rentals served to diversify BSNC’s portfolio and now serves as Nome’s central car rental hub. The acquisition of AIH further enhanced the corporation’s financial stability, providing steady and predictable income and reducing the risks associated with market fluctuations in any one industry.

Photo Credit: Bering Straits Native Corporation

Similarly, Afognak’s decision in 2020 to purchase Brown Jug Liquor from Alcanna was made in part to increase the corporation’s profits and reduce its reliance on government and other contracts. At the time, representatives from the corporation told KTUU that adding Brown Jug’s twenty-one retail stores and warehouse to its holdings would increase its commercial operations income from 2 percent to 12 percent.

“Brown Jug is a financially low-risk investment because the business is highly resistant to recession,” Afognak’s then-Executive Vice President Alisha Drabek told Tribal Business News in 2020. “Moving beyond our heavy reliance on the federal contracting marketplace to diversify into the commercial sector has been an Afognak Native Corporation Board strategic goal that we’re proud to realize.”

Current Issue

Alaska Business October 2024 Cover

October 2024

Community Connections

While revenue is always at the forefront of the decision to invest in retail operations, some corporations see their customer-facing brands as opportunities to create deeper ties to their communities and regions.

In October 2019, when BBNC acquired controlling interests in a seafood company and a fishery, then merged them to create Bristol Wave Seafoods, one of the corporation’s goals was to return control and earnings of the Bering Sea freezer longline cod fishery to BBNC shareholders. Today, the seafood company provides high quality, sustainably harvested Alaska seafood to customers, while also reviving BBNC’s connection to the seafood industry, rooting the company more deeply in the culture and landscape of its region.

For BSNC, acquiring Alaska Industrial Hardware has been a way to stay at the forefront of the minds of its customers.

“A physical retail presence boosts brand visibility and community engagement, allowing direct customer connections,” says BSNC President Cindy Massie. “Retail and customer-facing businesses help to remind our customers about BSNC and our mission to provide to our shareholders. We as a corporation do what we can to bring the health and well-being of our people and communities into a bright future.”

Industry Sponsor

Become an Industry Sponsor

Reversing the Revenue Stream

When it was enacted, ANCSA completely transformed the Alaska economy. Prior to the act, the large oil and construction companies operating in Alaska were mostly headquartered out of state; revenue they generated flowed out of Alaska and benefitted economies in the Lower 48.

Founded in 1959 by James Thompson to sell surplus nuts and bolts, Alaska Industrial Hardware grew into a statewide chain by 2015, when the venerable brand became part of BSNC.

Photo Credit: Bering Straits Native Corporation

ANCSA flipped that paradigm. State labor economist Neil Fried called it a “reverse colonial model” in a 2022 Indian Country Today article; ANCSA corporations established many of their subsidiaries in the Lower 48, and profits from those companies funneled back to Alaska. The model established significant revenues for the corporations, which are distributed to its Alaska Native shareholders through dividend payments.

Retail enterprises have the potential to generate flows of revenue back into Alaska too. The most extreme example of this model demonstrated by an ANCSA corporation-owned retailer might be Clear Alaskan Glacial water. Bottled by Alaska Glacier Products in Chugiak, the company is owned by Minto Development Corporation (a subsidiary of the Interior village’s Seth De Ya Ah Corporation) in addition to several other Native corporation investors. Clear Alaskan Glacial entered a partnership in 2013 with CHIC of Shanghai to sell its products throughout China. This development built on Clear Alaskan Glacial’s existing strong sales in Japan, South Korea, and Taiwan. Alaskans visiting the Far East might be surprised to see thirsty locals quaffing bottles bearing the label of their home state, thanks to Minto’s marketing hustle.

Among Bering Straits Native Corporation’s customer-facing enterprises is the Aurora Executive Inn and Suites, a hotel in Nome which offers discount rates to shareholders in addition to employment opportunities for locals.

Photo Credit: Bering Straits Native Corporation

BBNC, meanwhile, delivers fish sustainably harvested from the Bering Sea to customers throughout the world. Fish are processed and flash frozen at sea, ensuring a high-quality product; the revenues from sales of the product are distributed to employees through “crew shares,” portions of the total profit decided upon by each vessel’s captain.

Additional Advantages

Dividends aren’t the only perk that shareholders enjoy through regional and village corporations. The missions of each ANCSA corporation include directives to improve the quality of life of shareholders through economic development. This is done in part through providing employment opportunities, as well as relieving economic hardship, especially for shareholders who live in rural communities.

“In addition to shareholder employment opportunities and returns to help grow shareholder dividends, each of [our] three retail businesses provide exceptional discounts to BSNC shareholders,” Grayson says. “In Nome, the Aurora Inn offers a shareholder discount above and beyond any other discount provided by other hotels. These discounts can really make a difference, especially for people coming from the surrounding communities in the Bering Strait region, where oftentimes travel is significantly higher in cost.”

Meanwhile, BSNC shareholders also enjoy lower prices at BSNC car rental; however, shareholder discounts at AIH vary by item.

BSNC’s companies also create jobs. The corporation’s shareholders and their descendants currently make up 12 percent of AIH’s 200 Alaskan employees, “reflecting our commitment to creating employment opportunities for our community,” says Grayson.

With twenty-four stores throughout Alaska, Afognak-owned Brown Jug employs more than 200 Alaskans; like many retailers owned by ANCSA corporations, Brown Jug emphasizes shareholder hire on its career opportunities website, encourages Afognak shareholders to apply, and links them to career development resources at their corporation. Other ANCSA corporations highlight a preference for shareholder hire at their subsidiaries, including their retailers.

Though retail operations create exciting new possibilities for ANCSA corporations, operating retailers is not without its challenges, says AIH President and CEO Terry Shurtleff. But every challenge, he emphasizes, can be viewed as a possibility, too.

Staffing, supply chain issues, and competition pressures, Shurtleff says, “are also the same challenges our competitors have. We reframe our challenges as opportunities to distinguish ourselves from our competitors and provide the superior customer experience Alaskans expect.”

Alaska Business Magazine October 2024
In This Issue
2024 Alaska Business Top 49ers
October 2024
Congratulations to this year's Top 49ers! Earning a spot in this prestigious group has never been easy, and the threshold for making the list year is higher than ever, with Everts Air Cargo | Everts Air Alaska reporting $74.9 million in gross revenue to close the ranks. At the top of the ranks, Arctic Slope Regional Corporation also set a new record, reporting $5.5 billion in gross revenue.
Share This