SPEAKER
Lourdes Gant, Bob Rheault
Lourdes Gant 00:05
As a business owner of an aquaculture company, how can you take the first step to be profitable and sustainable at the same time? That’s what we’re going to be talking about in this episode. Hello, and welcome to the Business of Aquaculture podcast. This is the podcast for the Sustainable Business movement in the aquafarming and oceanranching industries. This podcast aims to amplify the voices of entrepreneurs addressing the United Nations global goals, a.k.a. Sustainable Development Goals No. 14 – to conserve and sustainably use the oceans and the seas. Listen to fellow business agriculturists in their journey in this new model of food production of making their business sustainable and help the oceans’ ecology, while also making a profit all at the same time. Get inspired to learn how even small- to medium- businesses can make an impact to save the seas, leave a legacy and have a better quality of life. One of our goals is to take away a nugget of wisdom that will help your business move from the Industrial Revolution to Business 5.0. Our vision is that of collaboration in the aquaculture industry. I’m Lourdes Gant, your host.
Lourdes Gant 01:25
As an aquaculture business, what can we do to represent the needs of the aquaculture industry and the environment? This episode is dedicated to answering that question. So listen in and I hope you enjoy this episode. Today we have Bob Rhealt. Welcome to the show, Bob.
Bob Rhealt 01:42
Thanks. I’m looking forward to it.
Lourdes Gant 01:43
He started Moonstone Oysters in Narragansett, Rhode Island in 1986. He has a PhD in biological oceanography, and is an adjunct professor in the Department of Fisheries, Aquaculture and Veterinary Science at URI. He served as the East Coast Shellfish Growers Association president for five years before he sold his farm and took on the Executive Director position in 2008. Bob is a passionate industry advocate carrying the message of sustainable seafood and economic development to our elected representatives and agency leaders in Washington, DC. Welcome again to the show. Bob, thank you for being here today.
Bob Rhealt 02:25
I’m looking forward to it. Thank you.
Lourdes Gant 02:27
We were talking a little bit before we started recording, but maybe you can give our audience a background again of how you got into the industry.
Bob Rhealt 02:37
Well, it’s kind of a long story. When I was a very young kid at the age of about 13. I was taking clams and selling them door to door to make my movie money. And I was watching, you know, Jacques Cousteau on TV, and Lloyd Bridges – and you know, Sea Hunt. And I thought there must be a better way – Jacques Cousteau is talking about the blue revolution and we need to grow our food instead of just fishing all the time. I was working with my mom in the garden and I’m thinking, well, maybe we can grow clams. And I announced to my parents at the age of 13: I want to grow up to become a shellfish farmer. And miraculously, I followed that career path – got my first job out of college growing seaweed to rot it for biogas. And that was interesting, and then decided I needed to go to graduate school – if I wanted to get a better paying job and find a way to fund what I thought would be a way to fund my ambitions of starting a shellfish farm. It turns out that getting a grant to start a shellfish farm is a fantasy, but nonetheless, I powered through and did what no one should ever try to do – which is while you’re finishing your PhD, start a business, start a hatchery, start a family, build a house – and it took me 10 years to finish my PhD dissertation because it all seemed so irrelevant, because I had already started a business. I had a consulting gig in the Philippines, teaching them how to spawn the Asian Moon scallop and the Dean kicked me out because I was taking too long to finish. And then I reapplied, formed a new committee and powered through. And I’ve been able to utilize my biological training to help advance the industry and be sort of a liaison between the science and the industry. So it’s turned out to be helpful, but there’s a number of what I would call over-educated oyster farmers in the industry. I know of at least a dozen PhD oyster farmers and I always say: you don’t need a PhD to grow oysters – you just need a strong back and a weak mind. But it actually turns out that it is a knowledge-intensive form of employment. I mean, there’s a lot of little things to know. And as we’ve done in building up our website for the ECSGA, there is a wealth of knowledge that you can mine on our website that – you can get lost on there for weeks, because there’s just so much to share. It’s not only the great stories about how wonderful and sustainable the industry is, but how to succeed in growing, how not to make the dumb mistakes that almost everyone makes – they cost them 1000s of dollars – all of the tips and tricks and marketing and sales and all the various aspects of the business, it’s actually pretty complex.
Lourdes Gant 05:31
I really love the combination. When you mentioned about the word “liaison”, I always find that it’s always helpful to have a balance of both, wherein you know – you’re grounded in the business side of things, but you also know the theory behind specialties – the specie if you’re specializing on one – and so you have both and that always helps. In this 14 years that I’ve been in this industry, I still find that I will never probably have enough knowledge because there’s just so much to learn.
Bob Rhealt 06:01
It’s also quite exciting and invigorating because, well, aquaculture has been going on for hundreds of years. Truly, what I would call “intensive shellfish aquaculture” is a very young business. When I started out, we were painting chicken wire to get two years out of it before it rusted out. And then in the 80s, they invented vinyl-coated wire and plastic mesh bags, and it really made possible the evolution of this industry. And since then, there’s been this wonderful adaptive radiation of new growout techniques. And we’ve seen the oyster grow cage and the number of various similar inventions like that – the SEAPA baskets, the BST baskets. Now, we’re seeing FlipFarm, and the wonderful inventiveness – but it’s really, you know, 30 years of innovation – so we’re really ripe for further innovation. And I always said that it made it fun to go to work because you always had the chance to invent something new that would save your back and make it easier, because we really are ripe for innovation, and we’re learning more every day about how to make this work, and then, there’s plenty of challenges. So we welcome all kinds of innovators to the fight – whether it’s engineers or biologists or marketers or recently, we’ve teamed up with the Nature Conservancy and Pew to help people understand how sustainable and regenerative shellfish farming can be, and how it serves the environment by improving water quality and providing habitat. I mean, my job is wonderful. I love to say I have the best job in the world. Because I get to advocate for the best industry in the world. There’s really very few downsides to something that provides sustainable seafood, jobs and economic development, nutritious and delicious products that have ecosystem benefits. It’s like a win-win-win-win-win!
Lourdes Gant 08:00
Well, you’re talking to the converted. (laughs) And maybe one of the questions since you’ve been in the industry for quite some time would be: what are you seeing as a future trend in the fish farming business, or the industry as a whole?
Bob Rhealt 08:12
So fish farming is more challenging thing. But shellfish farming is really where I tried to be an advocate for the fin fish farmers. But we have a very challenging history in the US. Pew and Packard spent over $100 million trying to de-market Atlantic salmon, and have convinced a generation of Americans that fish farming is bad. And sometimes that has a negative spinoff even to shellfish. I had a woman throw down a plate of oysters in front of my face when she learned they were farmed, as if it was coated with Ebola. I was like – no, you know, 90% of the shellfish we eat on this planet is farmed. And I’m very proud of that. And we have learned how to sustainably farm fish as well. But the legacy of some mistakes that were made, or shall I say in the – you know, while we were perfecting finfish farming – nothing is perfect out of the gate, but we were expected to be perfect – and there was some challenges. Obviously there remain challenges. I’m still ashamed at the amount of antibiotics used by Chile and some of the practices and even in Canada. But I look at what we’ve been able to do in Maine, where we haven’t had an escaped salmon in 25 years, we haven’t used antibiotics in 25 years – that message is not getting out. We’ve learned how to farm fish sustainably as well. But I am basically a shellfish guy. I work very closely with the finfish people and I try not to have any malice for fishermen. I just wish they would stop beating me up. (laughs)
Lourdes Gant 09:50
I love what you were talking about the difference sometimes with even the species. We are a shellfish farmer as well. And so there’s this big difference with the way that things are being done in finfish and shellfish that not a lot of people know, when they hear the word aquaculture. I remember one of the guests from one of the seasons before – we’re saying it, aquaculture is equals to the letter F. “Farm” is a bad word, right? But we’ve been gone way past that. And the future of the industry, I believe, is really bright, but the word that you mentioned, I think, what’s the trick is how to do it sustainably.
Bob Rhealt 10:31
Well, you know, where would we be as a species of humans without farming – you know, we’d still be hunter gatherers, I don’t know that the population of the planet is sustainable as it stands. But certainly, if we want to feed the next 2 billion mouths, we’re gonna have to grow a lot more seafood. And it’s very rewarding to see how the impacts of shellfish farming, in particular, are actually helping to restore the habitat, the water quality, and bring back some of the species that the fishermen and the recreational fishermen treasure. So, you know, I’d never expected it when I started my farm, but suddenly, I put 500 cages in the water, and it was the best diving and the best fishing in the state – and I hired a graduate student to document it, and we had more productivity and more biodiversity than a nearby eelgrass bed. And eelgrass is protected as essential fish habitat because it’s believed to have all these wonderful attributes – it fixes nutrients, it stabilizes the bottom, provides wonderful nursery habitat. And guess what – we do all of that too; in many cases as well or better than eelgrass – so we should get the gold star!
Lourdes Gant 11:44
I love that. What’s one thing you can advise for leaders in the aquaculture industry?
Bob Rhealt 11:51
Leaders? Well, we certainly need more of them. We are growing so fast as an industry – as I say, oyster aquaculture on the East Coast doubled in just the last five years pre-COVID, and we were on pace to do that again. And I imagine that you know, soon we’ll be back on that trend line to double again. Certainly over that timeframe, there has been a steady increase in prices – which tells me that demand more than doubled in the last five years for oysters, which is – thank God, because otherwise the price would collapse. So, I do believe we have lots of room to grow. And advice for leaders? Well, I don’t know that I’m the best person to ask because I’m still figuring this job out. You know, I spend half of my time working in DC, trying to advocate for more dollars for research. We’ve got a wonderful genetics program funded, I wouldn’t say that I’m anti-regulation – because we actually need strong regulations – but they need to be workable. So I spend half of my time working with the FDA and the Interstate Shellfish Sanitation Conference, to make sure that the regulatory manual which we work under – which is 560 pages long – is actually workable for growers and dealers and harvesters. It’s very important, you know – the placement of a comma can determine whether that regulation is going to put you out of business or not. So, we’re wrestling with issues of birds and how some agencies want us to have more birds because we provide forage and habitat. And then the FDA saying, Well, you can’t have birds on your farm, because the guano is going to get somebody sick. So at some point, we’ve got two agencies with very opposing priorities, and somebody’s got to sit down with them, get these two people in a room and decide: are we going to be habitat for birds, or are we going to have to repel them – and these are protected resources in many cases that we’re not allowed to disturb. So, now, we are caught between a rock and a hard place. So you know, these are some of the challenges – but in terms of being a better leader? Well, I wish I had the answer to that, because I’m still learning how all trade associations get about 15% of the members to join and 85% seem happy to freeload. I know that if I had more members, I would be able to achieve more – but I don’t have the resources to have an office or fully staffed or do the proper work that I think we need to do to advance this industry properly. So we’re growing rapidly, but still, my industry is dominated by mom and pops. 85% of my members have less than five employees. And so until we get more, I would say, mature industry members – more professional finfish farmers who are actually making a living instead of just doing it part time – it’ll be challenging for us to have the advocacy that we need to really push this forward. Right now, we’re still dominated by a lot of mom and pops and – hey, I started out as a small farm myself, and it took me 15 years before I reached profitability, really. To achieve- there, there is a level of scale that you have to achieve to really make money at this: if you’re not producing about three quarters of a million oysters a year, you’re probably losing a little bit of money every year – and that’s a lifestyle choice, but you’re not a professional farmer yet. I used to be able to say not long ago that I could count the number of farms on the East Coast with more than 10 employees without taking my shoes off. That’s no longer true, we have had significant growth, and there’s a number of larger farms. And these professional farms – some people say, well, we want to have small farms, you know, and everybody should have a right to farm. Well, that’s great, then the big farms don’t squelch the ability of a small farm to get established. In fact, they actually are able to provide the infrastructure that nurses the small farmers along – because we have many state associations that really couldn’t exist without the help of the big farms, the professional farmers, so- And the state associations, I rely on them very heavily, I try and organize them. And we’re able to get a lot done by working together – to working together with the National Aquaculture Association, the state associations – we’ve partnered with the catfish farmers, because the shellfish farming industry is relatively small. So if you want to get anything done, you need to leverage powerful groups that have a political pole.
Lourdes Gant 16:29
Well, I believe that’s a very good advice, leveraging powerful groups. It’s I believe that in this industry, that has always been what works is working together, as you mentioned, and also, you were talking about most are mom and pops at the beginning, and it takes 15 years to go before you become profitable, and you need somebody to cover your back to be able to, I guess, stay long term in this industry, and the legacy that it will leave. I always say that, because I have a 12 year old, this industry has allowed me to have this estate plan because it can be a generational business if the new generation choose to be caretakers of the ocean. Well, thank you so much for your time today. Bob – I learned a lot from our interview today. My biggest takeaway was when you were talking about how the industry is very much ripe for further innovation – I believe that this new world, Web3, and post pandemic – this is where everybody is going to be going, and I’m happy that our industry is on its way there. Thank you again, how they can get in touch with you?
Bob Rhealt 17:38
So our website is ecsga.org , and as I said, you can get lost on there for a long time. I highly advise probably the two most hit ones are my marketing video – I always said I was better at selling oysters and growing them – and the other one is don’t repeat the same rookie mistakes that everyone else makes: save a few thousand dollars and watch those two videos, and best of luck to you! And I wish everyone who wants to get into this business, well, but I also point out this is not for everyone. If you’re not happy being dirty, muddy, wet, cold, hungry, and smelly, then, you know, maybe you don’t want to get into shellfish farming. (laughs)
Lourdes Gant 18:22
Thanks, Bob – very astute advice. To our subscribers, do leave a review of the podcast so we can get more people to be aware of the value our guests are providing in these conversations. If you’re new to the podcast, I’d like to hear from you. Remember that every time someone listens to the episode, you help build a home in the Philippines via B1G1.com Initiative. Thanks, everyone. Thanks, Bob.
Bob Rhealt 18:44
Thank you.
Lourdes Gant 18:48
Thank you for listening, and I hope you are inspired from this episode. Do take a moment and share this with your friends and colleagues and rate and review the podcast wherever you get your podcasts. I’d love to know what your biggest takeaway from this conversation has been. What are you going to do differently? Please share thoughts across social media and tag us. For links and shownotes for this episode, visit our website: www.sustainableaquaculture.ca/podcast . Thank you again – I hope you will join me on the next episode, and together, we can help create a better business in aquaculture.