Northline Seafoods CEO Ben Blakey floats new business model for Alaska seafood processing
Ben Blakey is the CEO of Sitka, Alaska, U.S.A.-based Northline Seafoods, which announced on 30 November, 2022, it is planning to build a floating salmon-processing platform to operate in Alaska's Bristol Bay.
SeafoodSource: What is your background in the seafood industry and why did you pursue this project?
Blakey: I grew up working in Bristol Bay. My family had a processor, Snowpack Products, that operated from the early 1980s until it was sold to Icicle [Seafoods] in 2012. So basically, since I could walk, I've been involved in Alaska’s fishing industry. I grew up from mending nets to buying and operating fishing boats. I've worked in fleet management. Then I did some work in processing. My life’s work has been in Bristol Bay’s fishing industry.
SeafoodSource: How does Northine Seafoods’ new vessel, the Hannah, fit into Bristol Bay’s salmon supply chain?
Blakey: It's a floating fish-processing platform, primarily focused on quickly freezing the fish. We won’t do any value-added processing in Bristol Bay, we will just buy fish from fishermen and take fish from tenders and then we’ll freeze them immediately in whole, round form. We’re not heading or gutting them, we're just trying to stabilize them as quickly as possible, so that when they are thawed out that they’re in as fresh of a state as possible. What that means is we're going to have a smaller labor footprint. We will be able to do 750,000 to a million pounds of fish a day with 23 people working on the floor. So it will be extremely efficient from a labor perspective. In addition, we won't use standardized container transport. Currently, the vast majority of frozen salmon leaving Alaska end up in 40-foot frozen containers. We will instead just store them inside of our barge, which can carry north of 14 million pounds of frozen product. So those will be shipping costs that we don't have to pay. Instead, we will just haul the entire barge south back to the Pacific Northwest after the salmon season, meaning the barge will act as a consolidated or integrated shipping option. We will store the fish on the vessel until we plan to have them processed or they go to market. With the barge acting effectively as a cold storage facility, that will mean there's far less movement of the product – we won’t have to transport it on trucks through ports, forklift them around or tuck them into cold storage.
SeafoodSource: Are you going to be contracting with tenders or local fishermen?
Blakey: No, we will have our own dedicated fleet. And we will hire and utilize our own tenders to help serve the fleet and provide buying access.
SeafoodSource: With the uptick in fish being caught in Bristol Bay in recent years, is this additional storage and processing capacity necessary there?
Blakey: There is a need for it. Last year was an extremely large run, which saw an excess of capacity and an excess of what existing processors could freeze. But aside from the run size, there were issues with other parts of the supply chain, including a shortage of containers, and there's been a shortage of cold storage nationwide, and trucking fees have gone up substantially since the start of the [Covid-19] pandemic.
Beyond there being a need for it, we are simplifying and making the supply chain more efficient. One major part of that will be our use of integrated ultra-low temperature facilities, freezing and story all of our products at negative 25 degrees Fahrenheit, which allows it to be extremely fresh when it's thawed out and reprocessed in the lower 48 [U.S. states]
SeafoodSource: What types of products will you be buying, and where will you selling your products?
Blakey: We plan to buy all species in Bristol Bay and, you get a little bit of every species. The vast majority will be sockeye. We will be selling to other distributors who serve retail markets. We do work with some sashimi-grade sushi buyers up in British Columbia that serve the greater Vancouver, [Canada] area, and we have foreign buyers too, including in Thailand and the Philippines, but a large portion will end up in the fresh case in the U.S.
SeafoodSource: So secondary processing will take place on land in the lower U.S.?
Blakey: Yes. Once the vessel returns to Washington [after the season], we will perform some of the value-added steps ourselves on board, but things like heading and gutting, filleting, and other value-added steps that get the product closer to the consumer will be completed by existing reprocessors that we contract with, primarily in Seattle, and other parts of the Pacific Northwest – such as IPC and Quality Foods in Bellingham, Washington.
Our plan is to keep the pace of reprocessing more controlled, completing it throughout the course of the year, aiming for 50,000 pounds a day instead of trying to fillet a million pounds a day. That way, it’s far easier to control our costs and our timing and improve our yields, so we end up with a higher percentage of usable product that's better-created and easier to meet the specs the customer has asked for.
SeafoodSource: Where did you get the idea of the Hannah from?
Blakey: The idea actually originated from our chief technical officer, Drew Cohen. When we lost our previous barge [in 2020] after it wrecked on the beach in a storm, we sat down and started kicking around ideas and how we could improve what we operated before. And that's what led us to this current design.
SeafoodSource: Do you think this type of hybrid vessel is the future for Alaska’s salmon industry?
Blakey: I certainly think it has a strong place in the future of Alaska’s salmon fisheries and salmon fisheries worldwide. Floaters are expensive, but one of the ways that we were able to make this more economical is it's designed to operate at anchor so it doesn't operate under way, which kind of lowers the regulatory thresholds that we have to meet.
The idea is to cut a lot of costs and make it far more efficient to operate than the existing supply chain coming out of Alaska. But I don't necessarily think it would apply to all fisheries. This design is probably less applicable for pollock or groundfish in the Bering Sea, but there's a herring fishery out of Togiac that takes place in the spring, and we're looking at participating in that fishery and any other fisheries we could work in between mid-August and the start of our big season for refreshed sales, which doesn’t really kick off until October.
SeafoodSource: Can your business model survive any type of cycle of salmon runs, or is it based off of the bigger runs Bristol Bay has experienced lately?
Blakey: We fully designed the business model to accommodate variable runs, and with smaller runs, it actually operates better. Economically, it's more-efficient compared to kind of traditional platforms or traditional processing in years of lower volume, and that's primarily because our overhead is lower, and our sunk capital costs going into the season are far lower. Instead of having a few hundred people onboard that require managers and maintenance and mechanics for the various value-added lines, we don't have any of that. And by consolidating our shipping and cold storage, we're cutting costs, so it actually makes us a more-efficient platform.
SeafoodSource: How have you funded the project? Who are your investors? Are you still raising money?
Blakey: Thankfully we're done with fundraising and I can safely say we do not need more money. We spent about two years in the foxhole, designing, fundraising, and working hard to get to this step. We have a number of investors but I’m not currently prepared to disclose their names. With time and with their decision to go public, I would like to speak more about them. But again, it's up to them. I can say they’re all U.S.-based investors, because the Jones Act requires fishery endorsed vessels to be owned by U.S. citizens.
We’re just excited to get started moving through the construction process and into operations. We've got a great team of dedicated people who had to fight tooth and nail to get us here. We have this great opportunity to build something innovative and new, and we want the fleet to know that we’re coming back and buyers to know the platform will be operational in 2024.We're very excited to move forward and I think we've got the right people on board to get it done.
Photo courtesy of Northline Seafoods