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BLUE ECONOMY: Venture proposes processing entire fish

Published Tuesday, August 18, 2015 10:20 pm
by Michael Pollick, Sarasota Herald Tribune


Commercial fisherman Kenny Jenkins prepares to throw a cast net on a school of mullet near a dock on Longboat Key.


If you are killing a fish mostly to get its valuable eggs and turn them into an expensive delicacy, what do you do with the leftovers?

Healthy Earth, a newly formed private venture in sustainable seafood, thinks it has the answer.

The company intends to prove its case in Southwest Florida, building on two fishy acquisitions started here: The Anna Maria Fish Co., which makes bottarga from mullet roe, and Mote Marine Laboratory's multi-year success story growing Russian sturgeon in tanks to create a sustainable source of caviar.

Some of the remains, before Healthy Earth's acquisitions, were literally buried, says CEO Christopher Cogan.

A more profitable and more ecologically sound solution, says Cogan and partner, Mote, is to make fish chow, fish oil and maybe some fertilizer out of what is left after taking the fish's roe and its fillets.

Healthy Earth, with an assist from Mote, is one of five finalists for a $375,000 grant from the Gulf Coast Community Foundation. The money will be awarded in November, rewarding an innovation that contributes to a sustainable marine-economy venture that will result in new jobs for the region. Finalist teams, picked from a field of two dozen applicants in July, were to receive $25,000 to help flesh out their proposals.

The Healthy Earth proposal is built around making left-over mullet into fish chow. But that effort is really part a more sweeping venture to establish a new Healthy Earth fish processing plant, Cogan said.

Healthy Earth is negotiating on a site, Cogan said, and construction will move ahead quickly. Cogan says the new $10-million-plus operation, which will initially employ 50 to 75 people, could be running 18 months after closing.

“We intend to process the entire fish,” Cogan said. “If we take this investment, and we turn it around quickly, and we show the potential return per invested dollar that we think we can, all eyes in the aquaculture segment are going to be upon us.”

Healthy Earth will continue to lease eight acres of Mote Marine's 200-acre aquaculture park in eastern Sarasota County, where the sturgeon are being grown.

“We've got plenty of room to expand,” Cogan said. But even without expanding, he said, Healthy Earth's managers feel they are on their way to gains in fish tonnage and revenue just by tweaking the system put in place by Mote to aim for higher commercial production.

For its part, Mote continues to grow fish, like the snook that it recently released into Sarasota Bay. Mote bred their parents, then grew the fish from eggs into 10-month-old juveniles capable of fending for themselves. Mote also is working to grow another Florida indigenous species, the sea trout, in its tanks.

Both to feed the fish in its tanks and to increase the sustainability of its operation, making fish chow has long been a goal, Mote CEO Michael Crosby said.

“We've got an experimental design,” Crosby said. “We've been dreaming of doing this for a while. This Gulf Coast Blue Economy initiative is a wonderful opportunity.”

Subhead: Big investments Operating under the Healthy Earth name, the venture capital firm Seven Holdings acquired Mote's sturgeon-growing operation and The Anna Maria Fish Co., a fledgling venture started by restaurateur Ed Chiles and wine merchant Seth Cripe.

Chiles and Cripe aimed to hold on to a bigger chunk of the profit made by turning mullet roe sacs into a cured delicacy similar to sturgeon caviar, known as bottarga.

Each of those acquisitions started off with “seven-figure investments,” Cogan said.

Besides the land it leases from Mote, Healthy Earth licenses Mote's approach to growing the fresh-water Russian sturgeon in tanks.

In the Anna Maria deal, Chiles and his partners became equity shareholders in Healthy Earth LP, Cogan said.

At present, Healthy Earth turns most of the sturgeon into what are called bullets — a frozen fish carcass with its head and tail cut off. Those unused parts are buried.

The problem is even less ecological when it comes to mullet, which are caught in the wild. They can be filleted and smoked. But without a solid smokehouse market in the Southwest Florida, the prevalent local pattern is to freeze the fish and send them north to a smokehouse. In some cases, there have been large numbers of dead male mullet simply taken into the Gulf of Mexico and dumped.

Before the creation of The Anna Maria Fish Co., the region was not getting as much as it could get out of the mullet roe sacs, either.

The region's fishing center at the Cortez community in Manatee County has traditionally sold the mullet roe in bulk at $10 to $12 per pound.

“It goes out in 40,000-pound containers, frozen,” Chiles said, with the biggest buyers curing operations in Italy and Taiwan.

“And then they ship it back to us as high as $100 to $200 a pound,” Chiles said. “The issue is: this is our roe. This is our natural heritage product, and we are selling our treasure for pennies on the dollar.”

Before even dealing with the leftover carcasses issue, Healthy Earth's vision is to make more bottarga in Southwest Florida, as well as the sturgeon caviar, and to do its own smokehouse filets, Cogan said.

Rather than shipping frozen mullet out, “we intend to process the entire fish. We will take the fillets off. We will make a market for those fillets, sell them or smoke them and garner a higher value,” Cogan said.

“There are several smoke houses in the United States, but none here,” he said. “We intend to change that.”

Healthy Earth has a good head start in the direction of getting more of the added value out of fish. One of its partners is National Fish and Seafood, a major U.S. distributor. The chairman of Whole Foods also is a board member.

“We have access to end-user customers and we know exactly what they want,” Cogan said.

The way the southeast United States has ignored its own seafood potential is what creates the larger opportunity, Cogan said.

“Florida imports $3 billion in seafood a year. How is that even possible when we are bordered by fish on every side?” Cogan asked rhetorically. “If all we did was capture 20 percent of Florida's import market, we've got a $600-million-a-year company.”


See more at:

Seven Funds, LLC
2277 2nd Street
Sarasota, FL 34237
(941) 952-8050