Posts

West Coast Pilot – Culinary Workshop

/in , , , /by

A previous post outlined our pilot project in California with Changing Tastes; this post provides a peek into a culinary workshop that is part of the planning phase.

Purpose

As part of our work to reintroduce local fish back into local markets in California, our foremost consideration is how to reintroduce them to our plates and palates. Without delicious dishes and high quality products, winning back a space on the plate will be impossible.

To discover how local fish can create a winning combination of flavor, presentation, and affordability for chefs in corporate dining, our partner Changing Tastes arranged a culinary workshop in California. More than a dozen chefs and several sustainability managers from the same or similar groups joined us in mid-November at a test kitchen in the Bay Area to develop the recipes and messaging needed to successfully bring back Californian West Coast Groundfish.

Palate and Pocket

To explore which fish could please both palates and pocketbooks, the chefs spent the morning preparing a sampling of locally-caught fish, including Dover and petrale sole, boccaccio, chilipepper and black gill rockfish, and sablefish (AKA black cod) provided by Real Good Fish. These fish represent the spectrum of species that are part of the West Coast Groundfish program, one of the most sustainably managed fisheries in the world, and one that has the fish to prove the stocks are  healthy. These are fairly common landings that span from very inexpensive Dover to higher-end sablefish. The variety of textures, thicknesses and tastes were highlighted in Latin and Asian-inspired themes, such as black gill fish tacos with mango slaw (Chef Ochoa), petrale-coconut ceviche (Chef Fogata), black and white coconut crusted black cod (Chef Thomas), and steamed Szechuan boccaccio (Chef Hernaez).

Heart and Mind

Equally important to taste and cost is persuading diners to try these new dishes. In a nearby space, restaurant industry marketing and communications executives as well as sustainability managers and representatives of groups that support sustainable seafood brainstormed marketing ideas for the dining spaces where the fish will be offered to diners next spring.

Common themes included emphasizing that the fish is locally-caught in California. They noted that “local” often implies fresh to diners. Including a map of the different ports where the fish originates from for the pilot, and identifying fishermen and women from each was another popular theme.

Marketing experts, chefs, sustainability managers and others agree on not using the word “groundfish” in marketing materials. This group and others realize that this collective term for these species isn’t one that necessarily appeals to diners, nor does it help them understand the diversity of species and flavors within the broad category.

Pilot Evaluation

Among potential evaluation methods and data points, our participants identified these as the most likely:

  • On-site, established food focus groups
  • Measurement of orders by volume
  • Gauging the relationship between price of dishes and purchases
  • Comparison to sales of other seafood dishes
  • Comment cards
  • Online commenting system
  • Surveys, potentially with incentives, and/or provided in a quick format via touchpad at the point of purchase
  • Querying the culinary team during and after the pilot

 

Post-workshop steps

Our next tasks are confirming which specific dining halls and cafes will participate from each of the corporate dining partners and confirming likely order volume by species or species group, e.g., petrale sole is a species and rockfish is a species group. Almost simultaneously, we will work with the corporate dining partner and their existing distributors to determine the likely sources, feasible start dates, and volumes. We look forward to sharing updates as this work progresses in 2018.

 

 

West Coast Groundfish Pilot: What’s Next for Developing Local Markets?

/in , , , /by

A previous post outlined the results of the recent market demand research for West Coast groundfish. This post follows-up with more detail on the proposed West Coast groundfish pilot.

Purpose and Intent

And now what? That was our first question after learning the results from the market demand research. Those results indicated that next efforts to improve demand and pricing for West Coast groundfish should focus on selling minimally processed products to suppliers and buyers in the grocery retail and full service restaurant sectors. The answer is a pilot project; one designed to test the findings which will help U.S. West Coast fishermen expand into regional market.

This project would aim to raise commercial buyers’ and suppliers’ awareness of U.S. West Coast Groundfish as a domestic, sustainable source of whitefish and prove that these fisheries can provide a reliable supply of local fish. As a result, it will establish new markets and demonstrate the benefits and availability of West Coast groundfish to other buyers and suppliers.

Rationale

A pilot project, with defined sales periods and goals, will provide room to experiment to build relationships and to understand the market dynamics. Without a pilot, it will be difficult, if not impossible, to rally collaborative action or justify further investments in the fishery. Harvesters and buyers envision a pilot as being a first step in creating an ongoing sales effort that expands beyond the West Coast within two to three years, possibly sooner.

A successful pilot is key to having larger, sophisticated customers purchase significant quantities for a substantial part of their operations; the pilot also develops the tools they need to successfully use and continue purchasing the fish. Assuming the pilot results in positive values, harvesters, trusts, buyers, NGO’s, and potential investors will have information necessary to make decisions about infrastructure, marketing and other investments. In addition, they can start sizing-up plans in the local, regional and national markets, all of which are important to increasing quota attainment.

Framework

To create organizational capacity that endures beyond the period of the pilot, it needs to be structured carefully. The fishermen and the buyers need to feel comfortable with their roles and build knowledge useful for future efforts. Because of this, the pilot project will endeavor to work within the existing supply chain to build the ability of the harvest groups and processors to provide reliable supply. Memorandums of understanding and contracts for the pilot have to be written so all the parties involved understand their roles and feel comfortable with their responsibilities. Of utmost importance, the pilot design must incorporate a way for the value chain to continue the work after the pilot concludes.

Target Outcomes

Some specific questions the pilot should be designed to answer revolve around the conditions and requirements for supply and pricing. At the outset, stakeholders will need to address legal restrictions on collaboration. The pilot should also define the incentives or conditions needed to gain cooperation between the processors and the groundfish harvesters. Also, the pilot should delineate the amount of fish, prices, and timing (flow of supply and seasons). Finally, the pilot will try to determine the level of transparency needed to build trust so that value chain actors can work together as a team to create value.

Final Thoughts

Regardless of who carries out the work, a pilot is the best next step for the West Coast groundfish stakeholders. The ultimate goals are easy – improve profits for those paying for management – but the route has to be carefully plotted. Building trust and knowledge and demonstrating improved values are key. We can get there, but we have to keep the focus on the end goal of a sustainable fishery, which means ensuring profitability for the harvesters.

Sustainable Fisheries Investments: Lessons from the Field

/0 Comments/in /by

Three years ago, we set out to to explore a perceived anomaly in the impact investment market. While sectors such as carbon and agriculture were attracting a range of capital investment in sustainable fisheries appeared to be neglected. Given the geographic scope, industry scale and potential impact, we wanted to understand the reasons behind the lack of capital.

Our conclusion, following three years of field based research and due diligence in three countries, five fisheries, and over 220 interviews with financial, corporate, government, community and NGO representatives, identified the following key constraints:

  • Data
  • Management
  • Market differentiation
  • Infrastructure
  • Finance
  • Lack of investable entities

The first two, data and management, are the most pressing constraints to the effective deployment of capital at scale in developing country fisheries (DCFs), as discussed in our recently released report, “Connecting the Dots”. Each need to be addressed simultaneously if  equitable participation of the harvester is important to investors.

Concerning specific investments, there’s a fundamental need to distinguish between who and what benefits from value chain investments and investments in the drivers of stock health. While a healthy value chain benefits from a healthy stock, the benefits do not cut both ways, that is, a healthy value chain does not necessarily make stocks healthier; the drivers of stock health must be addressed.

Another general assumption holds that by changing the practices of one or two players in the value chain, we can secure stock health – this was found to be exceedingly unlikely in the open access system of fisheries which suffer from the tragedy of the commons. Addressing artisanal tuna harvester needs is socially and potentially economically positive, but it is difficult to prove environmental benefits if the next village over has unrestricted access – along with the purse seine factory fishing boat from the country next door!

The drivers of stock health are all external to the value chain, and, unfortunately, most financial interventions are reliant on the value chain in order to secure repayment. This disconnect is seldom recognized by practitioners, and it is often assumed that by changing the practices of one or two players in the value chain, we can secure stock health. At the other end of the spectrum are improvements aimed at stock health and improved socio-economics for fishing communities that rely on the “build it and they will come” theory, failing to integrate harvesters and buyers into improvements.

Our findings are that value chain based investments in open access systems are unlikely to improve environmental outcomes, and, in practices, are likely to accelerate resource extraction, in some cases, of already pressured stocks and resources.

Our research also identified significant investments in fisheries are an ongoing reality in many DCFs. Whether from the private sector (DDI and DFI data), and from national governments, fisheries are well capitalized.

The inequality experienced by artisanal harvesters is not, in our view, an issue of capital. It is a systemic failure, requiring multiple components be addressed simultaneously

There is an urgent need to focus efforts on improving the drivers of stock health in DCFs, over and above deploying yet more capital into the value chain without investment in stock health.

Markets for Groundfish in California, Part 4 of 4

/0 Comments/in , , , /by

This is part 4 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.

Waste and discards

The opaquest parts of the value chain are the discard and waste streams; we don’t have volume figures to distinguish between discards and processing trimmings and how much of each goes to secondary processors or to landfills. We believe this to be important given the high level of biomass discarded – in some cases as much as 70% of the landed fish (e.g. Dover sole, which has one of the higher quotas).

We identified one secondary processor and were told that disposing of processing byproducts is not a moneymaker; indeed, disposing of trimmings is a cost for processors which may be passed to harvesters. Just how much of a cost is unknown. Also unknown is what proportion is sent to the secondary processor and how much may be destined for landfill. In addition, we don’t know what volume of fish or fish waste enter this stream since the final end-market forms for domestic consumption is unknown (and thus how much fish is processed or sold whole is unknown).

A potential local solution to unvalued fishery byproducts was initiated in Morro Bay in which local farmers picked up bins of fish parts and turned them into soil amendment. However, discovery of state regulations that limit processing of the fish parts prohibited the continuation or expansion of the program.[1]

Questions: Would improving the value of discards and trimmings improve the value realized by harvesters? Is this a viable alternative market?

Final Thoughts

The West Coast Groundfish fishery could be a case study for successful fisheries management for hundreds of other fisheries around the world if it weren’t for the fact that so many harvesters still seem to be struggling economically. Until the harvesters are profitable enough to cover management costs, the most important part of the puzzle isn’t in place. Figuring out where the different pieces fit—value drivers, product flows and the like—will be a boon not only to these harvesters and their communities, but also to parties interested in investing in this, and other, fisheries.

[1] Kathy Johnston, “Hook, Line, and Sinker,” New Times, December 7, 2011, Volume 26, Issue 19 edition, http://www.newtimesslo.com/news/7042/hook-line-and-sinker/.

Markets for Groundfish in California, Part 2 of 4

/0 Comments/in , , , , /by

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?

Fig1[1][2]

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?

Fig2

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.

Fig3

[1] NMFS, “Commercial Landings,” page, Commercial Fishery Statistics, (2015), http://www.st.nmfs.noaa.gov/commercial-fisheries/commercial-landings/index
[2] NMFS, “Trade by Country,” page, Commercial Fishery Statistics, accessed February 18, 2015, http://www.st.nmfs.noaa.gov/commercial-fisheries/foreign-trade/applications/trade-by-country