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From boat to pouch: The Oregon Seafoods story

4lb Pouches

Many people have ideas about starting a business around mom’s home cooking.

For Mike Babcock, Founder of Sea Fare Pacific and an avid sport fisherman, the food he wanted to bring to market was fresh home canned pacific albacore tuna from the Oregon coast. Mike and his family have canned their own tuna for years, and thus, he was very aware of the taste and quality difference.

Mike had the realization that if fresh tuna could be canned like his mom used to do, there would be many people wanting to enjoy the taste.

“Oregon Seafood started in 2010 as a small canning operation to process fish products that did not get sold fresh in the fish market I had helped fund to get started,” he said. “It was a way to utilize product that may go to waste. It seemed like a good idea at the time — but I really didn’t know what that entailed — much more involved than I anticipated (not as simple as putting a few jars into a steam cooker on the stove top). The business naturally grew as we had to generate enough revenue to support the growing complexity of the business.“

Mike’s business background was not in fish or seafood, but rather, wood. It’s a business journey that touches on two keystone industries in Oregon.Funnel & Seal Check

From wood to fish

Mike founded Northwest Fir Products in Creswell Oregon in 1993. The company was primarily a small log operation specializing in producing stud logs for Willamette Industries and fence posts for retailers.

“When I started, I’m almost embarrassed to say that I didn’t know the difference between a doug fir and an alder log (he says with a smile). I had no previous experience in wood products and purchased my first mill while it was buried in snow over in Bend, Oregon.“

In 2004, Mike founded Goshen Forest Products as a larger small log operation specializing in cutting stud length lumber out of logs up to 12″ in diameter, and also producing fence posts and poles. Both operations have done well with a strong and consistent customer base, many of whom have been with Northwest Fir Products and Goshen Forest Products from the start.

“Growing the operation from a handful to 75 employees certainly had its challenges and I believe that this growth, which has had an impact on all phases of the business, prepared us to accomplish the same thing in seafood manufacturing.”

With the processes in place at Goshen Forest Products, Mike looked for a new challenge and became a partner in a retail fish market in Coos Bay. While analyzing ways to help the retail fish shop, an opportunity arose around seafood processing and manufacturing.

“Initially as I looked beyond processing fish for the market, Albacore was an underutilized species. Most of the catch was being sent outside of the US for processing, and fishermen were getting less for their catch than they did 20 years ago. It was hard to believe that the fish were being sent overseas to process and then shipped back into the US for sale. Being naive to cheap container movement and extremely low labor costs, I thought we could put together a business model that could compete with more expensive American labor.”

Charleston, OR Processing Plant

Charleston, OR Processing Plant

So Mike made the leap and went all in on developing a processing plant on the Oregon coast, which included putting $1 Million of his own money into the project. But as with any new venture, he analyzed potential locations for the processing plant, many of which were not in Coos Bay.

“Being new to the Coos Bay area I really didn’t have many ties here, other than a few tree farms I had relationships with. As we looked to build a new facility, I looked as far North as Newport and even considered the I-5 corridor. The longer I’m here, the more important this community becomes. I do have a strong desire to build a business here on the South Coast that will support many family wage jobs and help people grow to their fullest potential. “

Freezer Space

Freezer Space

Finding the needed rigging

With a focus on building the business in the Coos Bay community, Mike worked with the local SBDC center to help get the facility up and running in an efficient timeframe.

“SBDC was not involved in the beginning, but they are instrumental in allowing us to take the next step in getting the new facility built. Without their help we would be stuck building out the new facility at a much slower pace (as available cash came in the door). Not only did they help with the business plan, they worked with lenders to help put the financing together. On top of all that, they are great cheerleaders and continue to support us with a positive ‘can do’ attitude. Theresa Haga has been the point person and I can’t say enough good things about her. She really got it done.”

Processing Room

Processing Room

Mike will be the first one to tell you that the original business model, one that can compete with more expensive American labor, is currently still a work in progress. Oregon Seafoods has not been able to get their pricing down to match offshore produced Albacore tuna, but the team is learning more about the many variables associated with the seafood processing and distribution equation, and refining the model.

“Not all fish are sourced in the Pacific Northwest even if they are marketed that way. The majority of Albacore are caught in other oceans, including older adult breeding fish with potential mercury issues. These fish are a lot less expensive than the younger (2-4 year old) juvenile fish (clean and healthy) we catch and process here. Therefore we are focusing on marketing a higher end product in higher end stores. We are building a trusted brand that over time will add more value to the fish and to the guys who catch these fish.“

But a trusted brand is more than just a name and tasting good. It’s about the full product cycle; from the relationships with the fishermen/women to how the fish is processed and ultimately delivered to the customer.

This focus on the full cycle is helping to position the brand for retail and community success.

phone 8-23-14 031

Innovative packaging and sustainable fishing

As Mike ramped up the processing, he spoke to several local fishing veterans about Albacore and their markets. What he found was support for the vision he had for Oregon Seafoods, as they felt they were getting taken advantage of in regards to pricing. The fishermen seemed excited to have another potential market.

But the fishermen also provided some valuable feedback on how best to package the fresh caught Albacore. Fishing veterans, Rick Goche , F/V Peso II, and Mark and Cynthia Schneider, F/V Sea Princess (members of the albacore commission) steered him towards an earth-friendly pouch.

“The Albacore commission had already funded testing of the retort pouch at Oregon Sea Grant (OSU test retort facility in Astoria). Mark Whitham did the work and was a big factor that led us to pursue the opportunity. It seems like the US lags the rest of the world on adopting newer technologies, including understanding and accepting pouches as they have been widely accepted in Asia as well as Europe. So I decided to take a calculated gamble and invested in a Toyo Jidoki pouch machine.”

Pouch Packaging Process

Pouch Packaging Process

The pouches not only preserve the fresh caught taste, but are also free of chemicals like BPA and are less environmentally taxing to make, which is part of an overall emphasis on sustainability.

All of the Albacore that Oregon Seafoods uses in their Sea Fare Pacific branded products is troll caught, which prevents overfishing and by-catch (catching sea animals like turtles and dolphins). These fish are also caught in Oregon and support Oregon based fishing families.

Something that Mike will continue to support even as the Sea Fare Pacific product line grows.

“We have settled into Charleston, OR for the near future. As we continue to evolve into a food company (soup production for instance) the business would be better suited closer to I-5, which is a hurdle we’ll jump when we come to it. As we grow our seafood processing, there may be an opportunity to build another plant somewhere on the Coast; probably focus to the North as that seems to be where the Albacore are concentrated.”

They are looking to grow the private label business, and look to opportunities to also private label for other seafood companies. Oregon Seafoods has also begun exporting with some going to China, and with all of this momentum comes more challenges and opportunities.

“The biggest challenge is finishing up our new facility project with the right equipment so we can continue to meet our growth goals. The biggest opportunities will come with the added production capability and the new certifications we will have; we have lots of interest and it is very likely the new plant will be to capacity in a very short period of time.”

And for all of us who love fresh caught seafood, the Sea Fare Pacific products are scattered across the US, from small independent stores to a few big retailers like WalMart and Amazon.

Harvester (4)

For more information visit www.oregonseafoods.com & www.seafarepacific.com , like them on facebook and follow them on twitter