Silicon Valley dives in to support sustainable seafood

GreenBiz | November 18, 2013

Blue Sea Labs fish distribution company screenshot

Blue Sea Labs, a San Francisco-based fish distribution company, is working to shorten the traditionally long supply chain between U.S. fishermen and the end consumer.

Traditionally, the seafood industry has not benefited either end of its supply chain. While overfishing has depleted fish stocks, fishermen have given up profit margins to large processors and distributors. And thanks to mislabeling, consumers haven’t always been too sure where their fish came from.

Now, though, access to sustainable seafood has become mainstream. Large grocery chains Safeway and Whole Foods are taking cues from the Monterey Bay Aquarium’s Seafood Watch recommendations, and conscientious consumers try to buy directly from fishermen as much as possible.

But through new developments in technology and emerging opportunities for impact investors in sustainable seafood ventures, the movement has evolved and expanded beyond its original scope. Nonprofits such as the Future of Fish, for instance, are driving sustainability in seafood by supporting entrepreneurs.

And in the true style of startups, what better way to help entrepreneurs than by matching them up with investors during a two-day pitch session in Silicon Valley?

Scaling up

Enter Fish 2.0. Although described as a competition by founder Monica Jain, it’s also a year-long development process complete with advice and mentoring from business advisors and impact investors. Eligible entrepreneurs (those focused on wild capture-based fisheries, closed-loop aquaculture or in-ocean aquaculture systems) get the chance to refine their business models through a series of four elimination rounds with advisors experienced in finance, marketing and investing.

“These entrepreneurs offer investors the opportunity to help build viable businesses that contribute to food security, ocean sustainability and thriving local communities,” said Jain, who herself possesses a hybrid marine biologist-Stanford MBA background.

The first Fish 2.0 competition took place this year. Jain started the event as a way to bridge the gap between the entrepreneurs and interested investors who just weren’t finding viable business models. Organizers aimed to create opportunities and build momentum for impact investors in the sustainable seafood industry — a sector that has yet to seal as many deals as those in sustainable agriculture.

Through offering advice and judging during the first three rounds held online (PDF), and from sitting in the audience during the finals, impact investors got a front-row opportunity to familiarize themselves with the competitors. They were also ready to invest — some up to $10 million, according to Fish 2.0.

More than 80 hopefuls entered. Judges used a scoring system that evaluated factors such as the competitors’ business models, market conditions, financial status/projections and social and environmental impact.

By April, 53 competitors made it to the second round; in June, 39 continued to the third round. In September, 10 finalists and 11 semifinalists were chosen for the final round that culminated in the two-day event Nov. 12-13 at Stanford University in Palo Alto, Calif. Finalists gave a 10-minute pitch to a judging panel made up of investors and investment experts.

And the winners

First place and a prize of $40,000 went to Blue Sea Labs, a San Francisco-based distribution business shortening the supply chain via an online system connecting U.S. fishermen to consumers. As with similar online marketplace Good Eggs, producers (the fishermen in this case) know exactly what they need to fulfill their orders and can save time and money when securing their supply.

We are really excited about the chance to grow our business and help fishermen reach more consumers,” said Blue Sea Labs founder Martin Reed. “It was great to have a room full of investors there who wanted to know more about seafood.”

Second place went to Cryoocyte, a Harvard Innovation Lab startup that is developing fish egg-freezing technology in order to preserve endangered species for aquatic biodiversity. Founder Dmitry Kozachenok believes that freezing fish eggs also would give entrepreneurs in the developing world greater access to start their own fish-hatching operations, by providing them with a year-round supply of eggs and a way to bypass the costs of breeding and transporting juvenile fish.

“We want people to have better access to healthy foods, and we want generations down the road to have the same biodiversity in the oceans that we see today,” said Kozachenok, adding that he hoped to use his company’s technology to help restore wild fisheries. Cryoocyte received a $25,000 prize.

Ho’oulu Pacific, a community-based aquaponic and distributed agriculture business, won third place. Based in Waimanalo, a Native Hawaiian community east of Honolulu, Ho’oulu Pacific hopes to give residents the tools to establish healthy food security by growing fish and vegetables in their backyards. The integrated closed-loop system directs water flow from the fish tank to the plants. Plants extract nutrients from the fish waste, and the water is purified by the plants.

The company will buy the surplus and sell it to surrounding communities. Co-founders Keith Sakuda, Ilima Ho-Lastimosa and David Walfish aim to expand the network across the Hawaiian Islands. They received $10,000 in prize money.

In the fast-pitch competition, semifinalists had just 90 seconds to make a winning impression and $2,500. SmartFish, which aims to improve fishermen’s livelihoods in developing countries through the development of local and regional markets for sustainable seafood, tied with Inland Shrimp Company for the honors. Based in the Midwest, the Inland Shrimp Company is focused on raising shrimp indoors using sustainable methods.

View the original story here.

Screenshot of Blue Sea Labs courtesy Blue Sea Labs; image of fishermen setting their nets courtesy Loki Fish Co./Blue Sea Labs

Can tech startups change the way we eat?

The Guardian US/UK | October 31, 2013

Good Eggs site produce

Good Eggs offers a range of produce from local producers that can be ordered online.

These days, even the most casual observers can’t go long without hearing about yet another potentially disruptive business model hoping to redefine an industry.

But when that industry is food, it’s worth paying extra attention. Food, after all, affects everyone. And as the appetite for local food grows stronger than ever, a new crop of tech startups are moving to circumvent the industrial food system in favor of small, regional producers.

Innovative? Certainly. Disruptive? Maybe.

Founders from two promising examples, Good Eggs and Freight Farms, spoke at the Net Impact conference in Silicon Valley last week.

Farm-to-doorstep food, ordered online

Good Eggs, based in California, launched earlier this year after two years of research and testing to find unfilled needs in the food system. Co-founder Rob Spiro, an ex-Google employee, hung out with farmers, spent time on their ranches and tagged along on shoppers’ food-buying trips.

“There’s more demand than there is supply for local food … it’s very rare that you find a dynamic like that,” Spiro said at the Net Impact conference. The highly perishable nature of food, he added, causes the imbalance. Good Eggs’ solution is an online farmers’ market, complete with delivery. With more than 150 profiles of regional producers to pore through, San Francisco Bay Area residents can shop for food the way one might approach online dating.

First, find the type of product you’re interested in, whether it’s seasonal fruits and vegetables, dairy products, meats and seafood, baked goods or snacks. Then, see if the accompanying description and photos appeal to you. When you find something that meets your requirements, you can arrange to pick it up at a regional location or schedule a home delivery.

Good Eggs will aggregate orders from multiple vendors; delivery costs $3.99 per order. The idea is that shoppers have a better chance of finding what they want without having to visit multiple farmers’ markets while producers will only harvest what’s been ordered for the week, reducing food waste.

Aside from the Bay Area, Good Eggs is piloting test programs in Brooklyn, Los Angeles and New Orleans and plans to expand to hundreds of cities, Spiro said. He aims to take market share away from traditional grocers, including Walmart and Target, as well as from Amazon. “We would love to take them on,” he said.

But Good Eggs will have its work cut out to make sure it signs on enough producers to meet customer demand and vice versa. If it can’t meet most of shoppers’ grocery needs, they may not be willing to switch from bigger chains. The company also will need to keep a tight rein on quality control and – given the many different producers – make it easy for customers to choose between different products without being able to see, touch or smell them in advance.

In New Orleans, its fastest-growing market, the company already has signed on producers that weren’t previously selling at farmers’ markets, Spiro says. “We’ve got Vietnamese fishermen selling on the New Orleans [Good Eggs] market now that have not been hooked into the farmers’ markets or the local food scene,” he said.

Farm in a crate: year-round hydroponics

Two friends in Boston, Brad McNamara and Jon Friedman, were frustrated by the inefficiencies of growing plants in rooftop greenhouses. So they designed a hydroponics farm in a shipping crate that can be installed anywhere with electricity and water hookups.

That led to the founding of Freight Farms in 2010, then the raising of nearly $31,000 via Kickstarter for the company’s first unit in 2011.

The idea is a portable farm that users can use to grow local, fresh produce year round – instead of relying on food trucked or flown in from warmer climates. “Our main goal is to allow people to create small and medium-sized food businesses that can supply fresh and local foods to any environment,” McNamara, Freight Farms’ CEO, said at the Net Impact conference.

By doing that, the company hopes to ultimately change the way food is grown and distributed on a large scale. “The food system is linear, which creates inequality, access issues, price issues and spoilage,” McNamara said. “The system is ripe for disruption – and tech is a way to do that.”

Inside Freight Farms’ 40-foot-long shipping crates, users can grow their selection of more than 3,600 plants, including leafy greens, herbs and mushrooms. The system is climate-controlled, lit by LED lights and electronically monitored. Freight farmers can view the conditions in their farms via their smartphone and customize alerts, for instance, when the temperature or humidity exceeds a certain level.

The freight farms have the potential to be installed in a range of locations, such as underutilized land at schools or recreation centers, side lots or vacant lots. And, in order to use land more efficiently, the crates can be stacked four high and eight deep.

One developer in Massachusetts plans to install freight farms on three acres of an abandoned strip mall – farming a few crates himself and renting the rest to others – instead of putting in new stores. The system is designed to be accessible to those with little farming experience, McNamara claims. Inexperienced farmers have achieved crop yields of 60%, while experts have yielded 95%, he said. And the company also networks its farms so that users can support each other and share farming strategies and techniques.

Freight Farms has received a lot of interest from regional food distributors who haven’t been able to meet the demand for fresh local produce after the local growing season ends, McNamara said. “It’s cheaper for them to buy from a freight farm versus putting another truck on the road,” he added.

One distributor in Minnesota was so happy with the basil grown by a freight farmer that he offered $1.75 more per pound than the price he was initially willing to pay, he said.

With a price tag of $60,000 per shipping crate – and a threefold increase in price if the farm is solar-powered – McNamara acknowledges that a freight farm is not affordable for everyone.

In the past few weeks, though, he says he’s been exploring the ideas of regional food distributor sponsorship for crate farms in low-income communities. The distributor would pay for the farm with stipulations that a certain percentage of the vegetables would be grown for their inventory.

Freight Farms has also been tweaking its user instructions to make them more visual and to simplify the process. The hope is that this could make the farms more accessible to a broader swath of people, including those with little education or without strong English skills.

“We want to have these changes buttoned up by the middle of next year,” McNamara said.

View the original story here.