Josh Goldman is the CEO of Australis Aquaculture, a company originally founded as a recirculating aquaculture system (RAS) barramundi farming firm in Turner Falls, Massachusetts, U.S.A., which pivoted in 2018 to grow its fish in sea cages in Vietnam.
Australis has been operating in Vietnam since 2006, with a growing presence over the years. In 2008, it received a 25-year lease of almost 500 acres in Khanh Hoa Province, Vietnam, where it developed a barramundi hatchery and offshore grow-out facilities. In 2016, Australis purchased Marine Farms, formerly a cobia farming firm with a hatchery, shore-based facility, and sea sites in Nha Trang, Vietnam. Australis is now the largest aquaculture sea leaseholder in Vietnam and has focused on building new farms and expanding processing operations. It recently invested in seaweed cultivation as an integrated part of its marine aquaculture operations. It sells its barramundi products via The Better Fish brand.
SeafoodSource: What is the current status of Australis Aquaculture?
Goldman: A bunch of really positive things happened for the company in the last year. Probably the most foundational of those was that … around half of our seed leases were up for renewal. That was tied into a broader economic plan and the long and short of that is that we renewed all of the leases for another 20 years. So that was a giant sigh of relief. And I think also symbolic of the Vietnamese government's understanding that we're bringing a strategic new industry. Vietnam is the number-four aquaculture producer globally. It’s got this long coast but almost everything that's done here is lower-value production in ponds on land. And so we've brought this much more high-tech, forward-looking approach to ocean farming. And slowly and steadily, we have built a sizable business here with approaching 1,000 employees and approaching 10,000 tons of production.
With the confidence that came from that renewal, we hired Jason Paine to help drive our U.S. sales. We also closed the [USD 15 million in] Asian Development Bank financing, giving us some additional growth capital. And we have been working hard to take the next step in the vision around our growth, and how we globalize barramundi as a species. Our vision has always been that this can be the tropical salmon – we see this as a species that, like salmon, can be successful everywhere, that it has the fundamentals of a flavor profile that consumers like everywhere. It has perfect oil content and size for portioning. All those things are the ingredients for success in lots of markets.
SeafoodSource: Australis received a call-out from The White House in advance of U.S. President Joe Biden’s 10 September meeting with Vietnam General Secretary Nguyen Phu Trong. What did that mean to the company?
Goldman: In 2001, Australia's received a significant acknowledgement from the U.S. State Department, which was that we, along with Patagonia, won its Award for Corporate Excellence, both for our work in developing climate solutions through seaweed cultivation, and for bringing better aquaculture operations to the tropics. Traditional aquaculture production is going to face a lot of challenges from sea level rise and seawater intrusion and so by farming a very heat-loving species in the tropics and then linking that to our project around growing asparagopsis as a methane mitigation tool, I think were the things that made that happen. More recently, when Biden was in Vietnam in September, announcing a strategic partnership, I think the administration was looking to highlight the economic ties, the U.S. technologies, and the work we're doing on climate resilience, and thematically what we're doing aligns very well with all of those, so it was a lovely pat on the back, but that's all it was.
SeafoodSource: The announcement revealed Australis has a USD 100 million (EUR 95 million) budget for expansion in Vietnam. What are your plans?
Goldman: Vietnam is a great place to be in the seafood business from a labor standpoint, from a natural environment standpoint, we have a lot of the fundamentals here. And I think because the labor costs are low, we can put a lot of attention to detail into our processing –really trim stuff beautifully and achieve great results. We’re also very technologically focused. We've got a data scientist on staff and I think we're up to three Ph.D.s on the team at this point. So we're focused on innovation and biological performance. Whether that's smarter ways to treat parasites or bioenergetics of feed, following a lot of great research governments and universities are doing in major species like salmon and shrimp, we've got to go walk that path ourselves. But the good news is that whatever we do is commercially relevant and we own the results. We've got 48 R&D cages where we're cranking out three trials a month, and there's a lot of commitment to innovation here to drive cost quality and sustainability.
SeafoodSource: You said you have the possibility of expansion. What is the timeline or potential for that in Vietnam or elsewhere?
Goldman: We're pretty focused on Vietnam, at least over the next five-plus years. In the core region that we focus on Van Phong Bay, in central Vietnam, we have 20,000 tons of permitted capacity. So we're about 50 percent built out, and that's still with lots of sites that are followed and good distance between the sites, so we're not pushing the environment in doing that. We're still following the farming model that we've built and that we've got confidence in. And then in this region, there's a series of additional sites that we're working on. That could take us to 30,000 tons here. And then in parallel, we're probably three years into a permitting a second region in southern Vietnam. And we're about a year post stocking in that region – it’s not really commercially ready, but we’re getting good data about biological performance and disease issues. So that when we do go commercial, we will understand a lot about that environment. And that second region is permitted for 30,000 metric tons. So we've got a pathway to 50,000 metric tons, with more under development at kind of a slow pace. We've got a great runway to keep growing.
SeafoodSource: What's it like operating in Vietnam?
Goldman: From a human resource standpoint, it's fantastic. You have hard-working people, they have a good feel for the animal. They're very good at following protocols. Where you need help is, you may not have the level of experience or innovation. So we've got a Norwegian director of marine aquaculture on the cage side. We've got a guy coming out of Greece who was in charge of all the hatcheries at Selonda, which is great because barramundi is sort of a marine fish on the juvenile side and kind of a salmon in the sea. From a government policy standpoint, there's a lot of support for the industry, but it's still an emerging regulatory environment. And it's complex, because there are a lot of both regional and national regulations that are on the books, but people haven't necessarily implemented them and so it's very time-consuming to secure permits.
SeafoodSource: Relations between the U.S. and China are tense at the moment, and it seems like Vietnam is playing an increasingly important role geopolitically in the Asia-Pacific region. Does your company care about that at all? How does that affect Australis Aquaculture?
Goldman: Well, we’ve kind of just found ourselves in this position. Vietnam has this very big neighbor to the north that, historically, it hasn’t always been on the best terms with. And a really exciting emerging relationship with the U.S. but I think Vietnam has to be a good partner to everybody in a sense, because of where it is in the world. I think for our part, we want to reflect U.S. values here, especially regarding the importance of sustainability, and the importance of social good in what we do as a company – Fair Trade certification being a big piece of that. At the same time, China is an amazing seafood market, and if we can excite the Chinese consumer with barramundi, that would be wonderful.
SeafoodSource: Where's your distribution now, and how do you approach and target those markets?
Goldman: We're about 75 to 80 percent in the U.S. right now, all frozen. In the U.S., we’ve recently found success with a classic line extension play with coated products [Tuscan Herb Butter, Lemon Herb Butter, and Garlic Teriyaki]. One of the really exciting things is that we found that when people try barramundi, they reorder it at extremely high rates, above 90 percent. And so it's natural to want to offer them additional choices. The breaded market is so crowded and so, really, what we're trying to do is create more use cases for the consumer. Our naked product still is our best-seller because it ultimately has the broadest set of uses – you can make a taco, you can grill it, you can braise it, and I don't think you'll ever top that. But from a use-extension standpoint, and for brand and species awareness, those coated products are important.
We're quite active in Australia. We're very active in Singapore and we’re working to build a presence in the Philippines and Korea and some of that is with fresh products. The home market environment is interesting in some ways, but our emphasis over the next couple of years is going to be probably most heavily focused on China and Japan.
How we target those markets is a big, interesting question. In Japan, they have a species called akame. It's a very well-loved, legendary fish, but most people have never tried it because it's been so the supply has been so challenged and the prices are high. Barramundi is legally able to be sold as Southern akame. So we can sort of leverage that historical knowledge. But the challenges are not unlike what we faced in the U.S., where there's some residual knowledge but not enough to make it successful. So we've got to do all of the kinds of things that we did in the U.S., which is line up chefs and different kinds of influencer groups to communicate what makes this fish special.
SeafoodSource: Is there any domestic market in Vietnam for barramundi?
Goldman: I recently spent the day with a Vietnamese group that's the largest salmon importer to Vietnam, and they are excited about building a market for our fish. It seems like Southeast Asia is just a huge growth area right now. It certainly has that potential. I think the challenge is you still have a lot of really cheap fish so you've got to find a way to get the consumer to understand that this is a better version. That one of the challenges of the barramundi story is when you buy an Atlantic salmon whether it's from Norway, Chile, or Scotland it's fundamentally the same thing. You can argue around the edges, but it's always grown in a sea cage in the ocean. Whereas with barramundi, it could be grown in a little pond in muddy river water, or a more brackish environment, or at sea, and that makes such a huge difference in the end quality, and a lot of times people don't understand that. We’ve gotten a lot of phone calls over the years from distributors that say, “We brought in a container of this from Taiwan. Do you want to buy it? Because we can't sell it.”
SeafoodSource: What is your main message when you're speaking with retailers or distributors? What is your pitch to them? Have you seen the knowledge or appreciation of barramundi grow over the years you’ve been selling it?
Goldman: Yeah, sure. In the beginning, it was a little bit of a leap of faith for them. And then, of course, we got to go prove it and bring the consumer in, but now the consumers are there. The message is if you put this on the shelf and we collaborate on promotion, this will be a successful product for you. Because that reorder rate is what it is, and it's not very high-priced in the context of seafood today. And so you can be successful with it. I think the other part of the message is we have we've been doing longitudinal data to look at brand and species awareness, and one of the cool things is this: barramundi plays strongest with younger adults. The epicenter of who wants to buy this are the millennial consumers, because they're very health- and sustainability-oriented. That answers a big question and seafood about how we bring new consumers to the category.
SeafoodSource: Across aquaculture right now, it seems like it’s tough times for a lot of companies. Rising interest rates have something to do with that, and lower consumption rates. But it seems like you’ve avoided those troubles. How have you done that?
Goldman: We are in the boat with everybody else in the U.S. retail market. It's been really hard and we've had to do a lot of promotional expenditures. Like a lot of [others], we’ve had to pull volumes, and it's not hard, but I think the good news is that your retail partners realize the bigger picture and hopefully that promotion yields some longer-term benefit. But I think more broadly, the story in aquaculture for the last few years has been utterly dominated by the [recirculating aquaculture system] mania. I built the first 20 years of my career as a RAS guy and then went the other way. I think the problem that we're all trying to solve is, how we grow more fish sustainably because climate change and site limitations are at play. The dominant answer to that has been well, let's grow salmon on land, but with that, there are increases in cost, and risks, and unknown amounts of learning time. Our answer to that is let's take the package that salmon farming has proven – big cages and feeding barges and the mooring hardware and all that stuff that’s very cost-effective and we know works great – and bring it to locations where we're not paying USD 20 million (EUR 19 million) per 1,000 tons for the lease. And we have a big scope to expand here in Vietnam. There is the problem that we've got to deal with a fish that people haven't heard of, but that's also a great opportunity to become a market leader in an uncontested blue space. And it helps that it’s a good-tasting fish Once people, once people taste it, they love it.
SeafoodSource: And are you happy with where Australis is at right now?
Goldman: We are really happy. It's still always harder than we can ever imagine, but we've got a great team, and I think we've built a unique position in the aquaculture industry of taking a species from unknown to pretty well-known and owning that whole journey. I think we still have approaching a 90 percent market share in the U.S., which is one thing when you're in three stores, but when you're in 6,000 or something like that, it’s pretty cool.
SeafoodSource: What’s the biggest challenge you’re facing right now?
Goldman: The level of success that we're having in retail is not mirrored in food service. At a chain level, we're having lots of success with lots of independents. But when you get to the SKU-limited environment and you've got to sell seafood items through a 100-plus unit chain, people don't want to take the risk with borrowed money. And they're wrong; they should do it because we all have to find ways to be distinctive and reach new consumers. We can prove it works, but we need more people to take that leap.
Photo courtesy of Australis Aquaculture
