Lead Firm Strategy Implementation – Indonesian Blue Swimming Crab


In 2015, Wilderness Markets completed a value chain summary of the blue swimming crab (BSC) fishery in Indonesia in which we analyzed the current state of fishery data systems, resource management, infrastructure, and enterprise capacity. Based on these findings, we recommend a lead firm strategy to move the fishery toward sustainability. Like many fisheries in emerging markets, the Indonesian BSC fishery lacks reliable data and, despite new national policies, functions largely without effective management. The value chain has strong, established commercial and social relationships, indicative of the power and influence of a small group of 16 processors buying from 400 mini-plants that, in turn, purchase crab from more than 65,000 fishermen.

In this case, the lead firm is a U.S. based company, Blue Star Foods. Blue Star is working to create financial and social incentives to enable fishermen to transition faster to sustainable fishing practices. Through its purchasing power and relationships, Blue Star is therefore 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.

BSC traps

Sumatran vessel with collapsible traps

Lead Firm Pilot Design

With Blue Star and local harvesters, we are developing an investment model based on a pilot partnership between the lead firm and a fishing cooperative (in development). 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

This pilot is designed to attract private, return-seeking impact investment and complement ongoing work by NGOs to improve fishery management. We expect this approach will enable 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 bolster business advocacy for more effective fisheries management policies and enforcement through a local cooperative structure.

lead firm crab

BSC fisherman with new vessel tracking device

Goals and expected outcomes

Ultimately, as a result of better data collection and effective management, the fishery will produce higher yields of BSC. It will also provide a traceable, sustainably harvested product with a competitive advantage in key U.S. and E.U. markets. This will then allow Blue Star and supporting investors to recoup their investments in sustainable practices.

By embedding this lead firm work within existing value chain relationships and practices, we aim to:

  • Demonstrate the financial viability of investments in fishery data collection and management, thus attracting additional private investment in these practices.
  • 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.
  • Finally, test a new, “parallel” investment model for combining philanthropic, government, and private sector funding to address fishery management. If successful, other emerging market fisheries can tailor the model.

We are currently seeking additional partners to join us in this lead firm pilot project. Please get in touch with us if you would like more information and/or would like to get involved.

What lessons can be learned from the Icelandic cod value chain?

Iceland - Siglufirði Siglufjörður By Hansueli Krapf This file was uploaded with Commonist. [CC BY-SA 3.0 (], via Wikimedia Commons

Iceland – Siglufirði Siglufjörður By Hansueli Krapf This file was uploaded with Commonist. [CC BY-SA 3.0 (], via Wikimedia Commons

Icelandic cod first came to our attention at Wilderness Markets when we were collaborating with Future of Fish on research into financing needs in the US Northeast Multispecies Sector Program. How can cod from, Iceland, over 2000 miles away be not only cheaper but of equal or better quality than cod caught from just outside your proverbial front door?

A series of papers highlights important developments and key factors in the success of the Icelandic cod value chain since the ‘90s. The series include:

  1. The Effects of Fisheries Management on the Icelandic Demersal Fish Value Chain, 2016[1]
  2. A Comparison of the Icelandic Cod Value Chain and the Yellow Fin Tuna Value Chain of Sri Lanka, 2010[2]
  3. The Role of Fish Markets in the Icelandic Value Chain of Cod, 2010[3]
  4. The Importance of SMEs in the Icelandic Fisheries Global Value Chain, July 2009[4]
  5. Structural Changes in the Icelandic Fisheries Sector – A Value Chain Analysis, 2008[5]

Before digging in too far, two aspects of the Icelandic versus the New England value chains can’t be overlooked—the relatively small population of Iceland and the relatively high landings of cod.  For disputed reasons (climate change, better management, etc.) Iceland has a much healthier, i.e. more abundant stock, and hundred-fold greater landings than New England. Along with much higher landings, a far lower population means a robust export market.



Key factors and developments:

  • Increased efficiency at multiple levels of the value chain has helped improve value
  • Domestic value creation, specifically in the form of fresh fillets, has added significant value
  • Information flow (availability of information) and knowledge drive value
  • Use of marketing information to govern the value chain through vertical integrated companies and fish auction markets
  • Fish markets (auctions) improve efficiency and improve the consistency of supply for the value chain by acting as clearinghouses and support speculation
  • Consolidation of vessels, fishermen, processors, processing workers, and quota ownership have occurred in significant number
  • Increased specializations in fishing and processing

An interesting aspect that warranted a whole paper is the role of the fish markets, effectively online auctions, wherein all bidding is done through one computerized system owned by 15 independent markets since 2000. These private markets only handle 20% of the landings by volume but have a high value in terms of value chain efficiency because they allow for specialization (buyers can sell or swap species not needed for production), provide stability (buyers can ‘top-up’ if they are short on supply) and creates market-driven value for species. The rise in general groundfish prices by 20% from 1999 to 2008 is thought to be partially attributed to the fish market system.

Some key aspects of the Icelandic cod value chain, like low human population in Iceland and abundance of target species in their waters, don’t readily translate to Wilderness Markets’ recent focus on the Indonesian and U.S. West Coast fisheries. Others do. For instance, in the paper on the importance of small and medium enterprises (SMEs), the increase in vertically integrated companies means those companies have better control of the reliability, quality and delivery of fisheries products. Their competitive advantages are related to quality assurance knowledge, good logistics and dedicated export and sales management. On an almost reverse timeline for the U.S. West Coast groundfish fishery in California, fish handling in Iceland improved in the ‘90s and ‘00s by investments in better onboard cooling systems, shorter fishing trips and logistics improvements.

In the 2016 paper, they also describe the structure of the value chain before the export licensing system was abolished in the 1980s—importantly, and with implications for other value chains – the three large marketing and sales organizations that controlled most of the fish failed to send market signals back to producers. The new, vertically integrated companies that replaced these organizations heeded signals from foreign customers and improved product quality and successfully added value domestically by switching processing to Iceland instead of overseas.

We have witnessed this same disconnect in many other fisheries; fishermen don’t seem to have any idea about the needs and demands of the end markets and have no incentive to meet these demands. In one of the most telling statements in the series, an interviewee states, “They [the Norwegians] are still mostly thinking about catching while we have reached the point where we think about serving the market.” Most fishermen have not yet been able to reach this stage, hindering their ability to realize improved value for their work.

We’re hopeful that the end-market research currently underway in California will provide market data that can be turned into increased value for the harvesters working diligently to promote sustainability.

[1] Knútsson, Ö., Kristófersson, D. M., & Gestsson, H. (2016). The effects of fisheries management on the Icelandic demersal fish value chain. Marine Policy63, 172-179..

[2] Knútsson, Ö., Gestsson, H., Klemensson, O., Thordarson, G., & Amaralal, L. (2010). A Comparison of the Icelandic Cod Value Chain and the Yellow Fin Tuna Value Chain in Sri Lanka.

[3] Knútsson, Ö., Klemensson, Ó., & Gestsson, H. (2010). The Role of Fish-Markets in the Icelandic Value Chain of Cod.

[4] Knútsson, Ö., Gestsson, H., & Klemensson, Ó. (2009, July). The importance of SMEs in the Icelandic fisheries global value chain. In IXX EAFE Conference Proceedings (pp. 6-9).

[5] Knútsson, Ö., Klemensson, Ó., & Gestsson, H. (2008). Structural changes in the Icelandic fisheries sector-a value chain analysis.

[6] New England Population:
Iceland Population:

US landings:
Icelandic landings:


Markets for Groundfish in California, Part 3 of 4

This is part 3 of a 4-part series intended to invite conversations in advance of our planned end market demand analysis for groundfish in California. The larger goal is to provide quantified end market data to inform profitable value chain investments that will positively impact harvesters, local communities and the ocean.

Can local demand be met with local fish AND will it increase prices paid to harvesters?

Determining the consumption of seafood products in California with any precision, much less the product characteristics or species composition, is difficult. Considering average per capita seafood consumption in the U.S. is 14.6 pounds per person and 2014 California population is an estimated 38.8 million people, expected seafood consumption in California is about 257,000 metric tons. This is about 38 times the groundfish landings in 2014.  

Estimates from 1993 through 2004 show that estimated consumption of flatfish, a subcategory of groundfish that includes fish like Dover and petrale sole, should be 5,300 metric tons in California. [1] Compare this to the 2,845 metric tons of flatfish landed in California in 2014 and you realize it’s far less than estimated consumption and even lower when processing is considered. Again, this indicates a substantial market that would be interested in purchasing groundfish.

Another strong indication comes from recent work by Changing Tastes.[2] “Whitefish” and “other” currently compose 20% and 15% of U.S. consumer purchases from all sources. Whitefish is a generic and nebulous category, but groundfish species should fall somewhere in either “Whitefish” or the “other” category. The math again indicates a substantial market–about 90,000 metric tons of “Whitefish” and “other” are expected to be consumed in California each year.

All the data indicate there should be a local market for California groundfish, at least based on estimated consumption volumes. However, the characteristics of demand are largely unknown, so we’re unsure whether this is true once product characteristics like flavor and texture are accounted for.

What affect are imported groundfish having on prices?

Despite the data indicating a fairly substantial market for seafood in California, prices in real dollars have remained flat or even declined at some California ports. If there were local market demand, we would expect to see prices at least hold steady, if not increase.

Figure 4 California price comparisons adjusted for inflation, sablefish, Dover and petrale sole, 2008-2014


Figures 5 and 6 Price comparisons at major California groundfish trawl ports, adjusted for inflation, petrale and sablefish, 2008-2014

Price graphs

When the unit values of flatfish and other groundfish imported into California are compared to groundfish exported from California, as in Figure 5, the imported unit values are higher. Perhaps the fish being exported is of too low a quality to have a local market, or maybe it isn’t a fish that Californians like to eat. It may be that the imported fish has characteristics that local groundfish don’t have. But just what these characteristics are that are deciding values are largely unknown.

Figure 7 Unit value ($/mt) comparisons of foreign imports and foreign exports of groundfish from California


Why are prices flat and why aren’t more groundfish being caught?

The data we have indicates there should be a large enough market within California to absorb all landings and that prices at the dock seem to be flat or declining in real dollars at some California ports. We also know that the quota for many species is not being used, i.e., the scientifically-informed regulations allow harvesters to catch more fish, but they are not. Altogether, this data indicates a disconnect or a mismatch between the end market and harvester level—if there is indeed market demand for groundfish, it is not extending to the harvesters in the form of better prices. If it were, we would expect to see all of the quota being used.

Questions: Why is this? Are the species they land not marketable? Is the quality not good enough? Is the catch volume not steady enough? And if catch volume isn’t steady enough, what level does it need to be and would freezing be a way to overcome this hurdle?

[1] Malden C. Nesheim, Ann L. Yaktine, and Institute of Medicine (U.S.), eds., Seafood Choices: Balancing Benefits and Risks (Washington, D.C: National Academies Press, 2007).
[2] “US Seafood Market Segmentation Study: An Assessment of Relative Purchasing Power and Risks in the U.S. Fish and Seafood Marketplace,” December 1, 2015.

Markets for Groundfish in California, Part 2 of 4

This is part 2 of a 4-part series intended to invite conversations in advance of our planned end market demand analysis for groundfish in California. The larger goal is to provide quantified end market data to inform profitable value chain investments that will positively impact harvesters, local communities and the ocean.

Export markets

How much California groundfish is exported and how much stays?


Although we have data from NMFS for exports from California ports, it’s not an apple-to-apples comparison to NMFS landings data, making it difficult to understand how much fish likely stays in California and how much fish exported from California actually was caught in California. The export data doesn’t divide export volumes and values by species, like the landings data does, but instead lumps it into broad categories for most species. For example, Dover sole and petrale sole, which are each reported in California landings, are lumped in the export category “flatfish”. This makes it hard to characterize demand for groundfish by end market preferences—we don’t know how much Dover stays in California or in the U.S., and how much is exported.

Another comparison conundrum is that the exports from California ports appear to include fish landed outside California waters. We did not include exports of pollock, haddock and cod since these are not recorded in the California landings data for the time period we compared. After filtering these out, there are relatively small volumes of groundfish (8-19%) exported as compared to landings in Figure 1.

Are there more money-makers like sablefish?

One bright point, in terms of value to the groundfish fishery, is sablefish. Sablefish seems to be driving not only value but volumes of exports from California. The average unit value (simply the landings value divided by the volume) for sablefish landings in California were usually twice as much as other groundfish from 2008 to 2014.For the same time period, the ratio of sablefish landed to sablefish exported averaged 24%, compared to 1 to 10% for most groundfish. Of course, this isn’t a wholly accurate comparison: since the sablefish exported from California may not have been landed there.

More than 90% of all exported sablefish over the time period assessed go to Japan, most of the sablefish going to Japan is frozen. Sablefish is doubly interesting because of this—not only are high value exports a rarity in this fishery, but so are high value frozen products.

Remaining questions include: Are there other species that can capitalize on the export market to Japan? Are there other species or markets that would have similar characteristics—a high value fish, exported in frozen form—where this success could be replicated?

Why does it seem that extremely low value groundfish is being exported?


Another interesting comparison is the unit values of landings and exports in California, based on the same data provided by NMFS. We expect that export unit values would be higher than landing unit values, since they are likely processed and value-added. But for groundfish other than flatfish and sablefish, this expectation isn’t met. From 2008 through 2011, groundfish other than flatfish and sablefish had a higher unit value for landings than for exports.

There are a number of potential causes for this disparity:

  • We’re comparing different species. The “other groundfish” category that’s being exported is comprised of different species than the ones in the landings data. Perhaps these are low value species landed outside California and brought to California and exported.
  • Groundfish exports are lumped into a category other than “groundfish” for these years. Perhaps they’ve been exported in a product form that does not identify the type of fish.
  • Low value groundfish can’t be sold domestically. The groundfish being exported doesn’t match the domestic market demands and so the only market is a very low paying international market. Figure 3 compares the top five destinations for California groundfish.(Note that the Netherlands (NLD) appears to accept many low value imports in 2014.) Other than Japan, potential high value markets to explore include Vietnam and Canada. However, both these countries imported small amounts, albeit at high value, in 2014.


[1] NMFS, “Commercial Landings,” page, Commercial Fishery Statistics, (2015),
[2] NMFS, “Trade by Country,” page, Commercial Fishery Statistics, accessed February 18, 2015,