Fish 2.0 brings together startups and investors that want to make seafood more sustainable. Founder Monica Jain says emerging technologies and market forces will push the industry to change – sooner rather than later.
WHEN 40 STARTUPS from all over the world gathered at Stanford University in November, it was not a typical Silicon Valley pitch day. The entrepreneurs competing in the Fish 2.0 Innovation Forum saw themselves more like the next Cargill than the next Google.
Monica Jain, Fish 2.0’s founder and executive director, believes the seafood industry is on the brink of dramatic change, driven by environmental concerns and market shifts such as a growing and more health-conscious global middle class and a boom in aquaculture.
If you’re a talented young data scientist scouting the next frontier, where do you go? If you’re a biotech pioneer hunting for new ways to apply cutting-edge concepts, where do you look? If you’re a global powerhouse that doesn’t want to miss the next big market opportunity, what’s on your radar?
Seriously. That answer may be an outlier now, but soon it will be on everyone’s lips. Change in the seafood industry has only been incremental for the past 50 years or so. Now the sector is on the cusp of thoroughly reimagining products, supply chains, and technologies, much like the communications sector did after the iPhone. Five accelerating global trends are driving market demand behind this transformation: the need to predict and understand climate change impacts; wild fish stocks nearing maximum sustainable yield; product globalization and the rise of online sales; the worldwide growth of a health-conscious middle class; and aquaculture’s rapid expansion.
Investment competition founder talks innovation, competition and the financing aquaculture seeks for the future
If you sell, you’ve probably practiced your elevator pitch, that condensed, to-the-point message that sums up the most essential information about you, your business or the product or service you offer.
Perhaps you’ve polished this pitch in front of family or friends – or only a mirror – but delivering a succinct speech on stage, before hundreds of fellow professionals, with your career potentially on the line, is another matter entirely.
That’s essentially the situation for finalists at Fish 2.0, the biannual investment contest. Emerging seafood companies around the world come to Stanford University hoping to hook into a source of capital to grow their businesses by impressing a panel of expert judges. The competition’s founder, Monica Jain, has a long history of working in venture capital, banking and other aspects of finance, and has worked on financial plans for marine protected areas.
Over the past five years, as I’ve built the Fish 2.0 business competition, I’ve seen an overwhelming number of creative ideas bubbling up—with highly qualified entrepreneurial teams behind them. Their innovations, combined with powerful social and environmental forces, are creating a new world both above and below the ocean’s surface.
I believe that by 2027, we won’t be gorging ourselves on shrimp. Or tuna. Or salmon. Not because they’ve disappeared from the oceans or we’re appalled by how they’re produced, but because we’re eating so many other delicious fish from land and sea — like porgy, dogfish, lionfish, barramundi, and others we’ve yet to meet.
They’re throwing their money into the ocean, for good reason. Here’s where it’s washing up.
Four seafood companies landed sizeable investments in the past few months. New funds are being formed. More than 100 investors are volunteering their time to help businesses in the Fish 2.0 competition leap forward. A movie star just took a seat on the board of a seafood startup.
It all makes sense. Investing in seafood is a bet on continued rising demand for a healthy, sustainable protein that a rapidly growing world population wants to eat.
And now a new generation of seafood entrepreneurs is breaking open the industry.
Well-connected industry insiders have long seen the strength in seafood (and invested accordingly), but doors have been closed to the broader investment community. Traditional businesses in the sector are family or privately owned, and public information about deals and business fundamentals has been scant. But today’s seafood innovators are seeking capital from a range of investors, and they offer ample exit options. Many will get snapped up by larger public or private food companies, and some have the potential go public themselves.
When you browse the fish counter or order off a seafood menu, can you be sure the species label is accurate and the fish was caught or farmed ethically? In many cases, the answer is no. A 2014 report in Marine Policy estimates that over 20 percent of wild-captured seafood imported into the U.S. comes from illegal fisheries, and a 2016 report from Oceana estimates that, on average, 20 percent of seafood worldwide is mislabeled. The opaque supply chain of many seafood products can hide a host of problems, including human rights abuses in the labor force, fishing in protected areas or of protected species and environmental degradation.
You know what there’s really plenty of in the sea? Algae. And I am in love with them. Most people envision algae as slimy, possibly toxic, green scum. But this diverse group of fast-growing aquatic plants is about to undergo an image makeover, and may soon seem flat-out glamorous.
Algae got a lot of excited press a few years ago as a potential biofuel, but they’re turning out to be a sustainable super-ingredient with transformative potential in several massive industries: fish and other animal feeds, pharmaceuticals, cosmetics, nutritional supplements, bioplastics and fertilizers.
They’re also gaining favor as a vegetarian seafood. In all, the market for algae products could reach nearly $45 billion by 2023, according to a 2016 Credence Research market analysis.
Consumers who would never buy something generically labeled meat or cheese are often stuck at almost that level of information when it comes to seafood. The opaque origins and processing of many seafood products can hide a host of problems, including species fraud, illegal fishing, human rights abuses in the labor force, and pollution—as well as the resource depletion that accompanies these issues. A 2014 report in Marine Policy estimates that over 20 percent of wild-captured seafood imported into the U.S. comes from illegal fisheries.
But this is quickly changing, as an increasing number of innovators in the seafood industry create new ways of making the system more transparent and seafood products and processes more traceable.
The East Coast was literally built on oysters. At the peak of their production as a food source, these shellfish were so plentiful from the Gulf Coast to New England that discarded shells were crushed and used to pave roads. Oysters kept bays and waterways clean—Chesapeake Bay residents didn’t need to treat or filter their water. A 1913 National Geographic article proclaimed them “the world’s most valuable water crop,” cultivated as a year-round, dependable and inexpensive protein source. About 150,000 people in 35 countries worked to produce “the most popular and most extensively eaten of all shellfish.”
The situation more than a century later is quite different. Oysters remain desirable, but populations have been decimated. The Gulf of Mexico has just 10 percent of its peak oyster population, and Chesapeake Bay is down to a mere 1 percent. The situation has been described as dire by many locals, who’ve seen dredging, overharvesting and disease destroy oyster habitats.
A wave of change is upending the seafood business as we know it. Here’s what it means for everyone from investors to fish stick aficionados.
It’s 2027, and we’re no longer gorging ourselves on shrimp. Or tuna. Or salmon. Not because they’ve disappeared from the oceans or we’re appalled by how they’re produced, but because we’re eating so many other delicious fish from land and sea — like porgy, dogfish, lionfish, barramundi, and others we’ve yet to meet.
Our old favorites are still around. We've stopped loving them to death and have figured out how to both scale up fish farms and produce fish-free feeds for aquaculture so that we can grow low-impact, high-quality seafood.
We also know exactly what fish we’re eating and where it comes from — sometimes we even know the fishers by name — so we can make confident choices based on nutrition and sustainability factors. Fishing communities are healthier too: they serve local as well as export markets, and new seafood products boost their economic base. Unsustainable seafood just doesn’t sell: consumers walk away from it the way they avoid foods with transfats today.
There’s a global divide at the heart of the seafood industry: the businesses that most need new technologies are often continents away from the businesses creating them
Small-scale seafood operations in Asia, Latin America, and Africa catch and farm most of the seafood we eat. Startups in the U.S., Canada, and Europe are developing most of the technologies that promise to improve logistics, traceability, fish feeds, and aquaculture production. But distance and limited resources mean these businesses rarely meet. Bridging this divide is an essential step toward both healthy oceans and a healthy, equitable food supply
“If you had the opportunity to generate income for a whole island, what would you do?”
That’s how Lili Kawaguchi opened her pitch during the closing session of Fish 2.0’s Pacific Islands business development workshop. The question grabbed the audience’s attention, as did the rest of the Tongan entrepreneur’s pitch for her seaweed products startup. But it’s a pitch she wouldn’t have made two days earlier, at the start of the workshop.
Getting Investors Excited About Sustainable Seafood
November 9, 2016
Anyone who’s spent time in the sustainable seafood sector will tell you it’s a growing industry, full of creativity and innovation – one ripe for investments that will pay out in stronger economies and healthier oceans.
Alfred Kalontas, the founder of ALFA Fishing in Vanuatu, bootstrapped his business from nothing to become the preferred seafood supplier to over 70 percent of the hotels and restaurants in the island nation’s capital, Port Vila. He is now starting to export his high-quality, sustainably caught products to New Zealand and is seeing demand from Australia and beyond.
Wild fisheries are stable at best and declining at worst. That means we need aquaculture to meet the world’s growing demand for protein. And to feed the world sustainably, the industry has to figure out how to feed farmed fish without using wild fish stocks.
“Fish 2.0 accelerated our business to a fundamentally different level.” “It’s boosted the confidence and pride of board and staff in our business model, in addition to validating our model with current and potential funders.” “Winning Fish 2.0 was a huge event for our young company.”
The seafood industry's supply chain is notably opaque, complex and, in some areas, technologically deprived, experts say. But that doesn't mean it's stuck in the past. Dedicated efforts over the past two decades have improved the seafood supply chain's sustainability -- and we have an opportunity to do much more over the next several years.
Businesses, NGOs and governments have been collaborating to improve seafood supply chain transparency and sustainability since the 1990s, as Meredith Lopuch of the Gordon and Betty Moore Foundation noted during a panel discussion at the Fish 2.0 Competition Finals & Seafood Innovation Forum in November.
The seafood industry’s supply chain is notably opaque, complex and, in some areas, technologically deprived, experts say. But that doesn’t mean it’s stuck in the past. Dedicated efforts over the past two decades have improved the seafood supply chain’s sustainability — and we have an opportunity to do much more over the next several years.
Our oceans and the people who depend on them are in trouble. According to the United Nations Food and Agriculture Organization, about 70 percent of the world’s fisheries are fully exploited, overexploited or collapsing under the pressure of a $390 billion global seafood market. Yet analysts expect seafood demand to double by 2050, and island and coastal communities around the world depend on seafood for both sustenance and economic health.
As most TriplePundit readers know, our oceans and the people who depend on them are in trouble. According to the United Nations Food and Agriculture Organization, about 70 percent of the world’s fisheries are fully exploited, overexploited or collapsing under the pressure of a $390 billion global seafood market. Yet analysts expect seafood demand to double by 2050, and island and coastal communities around the world depend on seafood for both sustenance and economic health.