How a Lead Firm Strategy increases sustainability and company profits
“After only two years, we’re seeing the progress. Already the blue-swimming crab fisheries in Indonesia are more sustainable and profitable. We decided to move into the Philippines, and are seeing early signs of similar success there.”— John Keeler, Executive Chairman & CSO, Blue Star Foods
Blue Star Foods is known as a quality source of blue swimming crab, much of which comes from Indonesia. But the as the resource started becoming scarce, Keeler recognized that if something didn’t change, he would have no crab product to sell.
He worked with Wilderness Markets to create a triple bottom line strategy and reverse the trend.
“We chose to work with Wilderness markets to develop our 3BL strategy because of their experience with impact investing AND expertise with wild-caught fisheries. That foundational work has made implementation a success,” said Keeler.
How We Help Companies Like Blue Star: The Lead Firm Strategy
Companies like Blue Star Foods are in a position to lead these sustainability efforts and see a positive financial return.
A lead firm strategy will move a fishery toward sustainability. Processors have the power and influence necessary to navigate the economic and political challenges in the countries and communities that supply the fish. In this case of Indonesian blue swimming crabs, U.S. based Blue Star Foods became the lead firm.
The lead firm strategy focused on creating financial and social incentives to enable fishermen to transition faster to sustainable fishing practices. Through its purchasing power and relationships, Blue Star is in strong position to influence the practices of a range of processors, who have commercial relationships with a network of mini-plants, collectors, and fishermen.
Lead Firm Design
Working with the lead firm and local harvesters, we develop an investment model based on a partnership between the lead firm and a fishing cooperative. The model brings together philanthropic and private capital and provides financial, social, and environmental returns. It includes:
- Purchase commitments based on price, quality and standards
- Investments in fishermen cooperatives to motivate gear improvements
- Improved fishery data collection and traceability
- Support for harvest control compliance
The goal is to attract private, return-seeking impact investment and complement ongoing work by NGOs to improve fishery management.
This approach enables local fishermen to adopt sustainable practices faster than waiting for the government to independently create and enforce management changes, and without the economic hardship for fishermen that often accompanies changes in fishery regulations.
It will also bolsters business advocacy for more effective fisheries management policies and enforcement through a local cooperative structure.
Goals and expected outcomes
Ultimately, as a result of better data collection and effective management, fisheries will produce higher yields. The programs also provide a traceable, sustainably harvested product with a competitive advantage in key U.S. and E.U. markets. This in turn allows the processor and supporting investors to recoup their investments in sustainable practices.
“We are thrilled to see that these sustainability practices are positively impacting the social well being of harvesters and workers, and that they are improving sales to large-scale foodservice, retail and institutional buyers.”—John Keeler
By embedding this lead firm work within existing value chain relationships and practices, we:
- See the financial viability of investments in fishery data collection and management.
- Create new norms that are sustained because of their business value and not ongoing philanthropic support or government subsidies.
- Provide clear and reliable financial benefits for small-scale fishermen to make gear changes; follow harvest control measures; and take on other sustainable fishing practices. Immediate economic well-being is thereby aligned with sustainable practices to improve compliance and reduce the localized short-term, negative impacts of fishery restrictions.
Blue Star Foods success is replicable across fisheries, geographies, and species of fish.