Podcast Transcript: Species Spotlight: Abalone with Rob Jorden of Rare Foods Australia

Audio Transcript: Species Spotlight: Abalone with Rob Jorden of Rare Foods Australia

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Shaun: So we’re sitting down today with. Rob Jordan, who is the CEO of Rare Foods Australia. Rob, how’s it going? Thanks for joining us!

Rob: Thanks for having me. I don’t think we could actually be further away. Very pleased to be joining you all. Yeah.

Shaun: I guess it wasn’t really in the budget to get the three of us on a plane to fly down there and meet with you in person, so this works. We’re going to talk about Rare Foods Australia, and more specifically the market and the species of abalone, which is just a delicious seafood.

If anyone hasn’t tried it, you definitely need to give it a shot. Rare Foods is doing some great things with abalone, and I’m excited to talk about everything that you do. But before we get into that, I want to learn about you because our listeners have the right to know who they’re hearing from, and I’m sure everyone is interested in your story.

So, Rob, why don’t you give us a little intro of who you are and how you got here?

Rob: Look, I only tried abalone two and a half years ago when I joined the company, so I come from humble beginnings with abalone, but I’ll tell you what I know. I have a business background.

I was actually in agriculture products in southwest/western Australia back in the late eighties. Pioneering a dream in free-range poultry, and that didn’t go the way that was planned. I ended up in business improvement for the best part of 30 years.

Working up from the ground, from a processing perspective to a structure perspective, to a strategy perspective, I always thought I’d end up back in the mining industry and then through networks and connections this opportunity presented itself. And yeah, the rest is history.

I’m absolutely thrilled to be participating. I’m really thrilled to be back in agri products in Southwest Western Australia.

Shaun: So when your team reached out to us they were really excited about some of the stuff that you all have been doing with abalone, and abalone is a species that we have not touched on yet on Aquademia. I first tried abalone when I was in college. One of my professors had us over to his house for a big seafood dinner at the end of the semester and he made all different kinds of shellfish because it was a shellfish/molluscan aquaculture class. So we tried everything and this was definitely one of my favorites of all the things that we tried.

Abalone is a gastropod mollusk which means it crawls around on its belly. And, from what I understand, Rob, I know that you are not a biologist when it comes to abalone, but I’m sure you have an idea of how these are raised on the farms. These are fed molluscan species, correct? Because that’s different from a lot of the other species we’ve talked about with mollusks. A lot of times they’ll put out mussels on ropes and then they kind of just let them grow because they’re filter feeders. But abalone is different.

Rob: Yeah, look, I’ll stand back contextually. There are about 200,000 tons of abalone produced each year and I think 95-96% of that comes from farms in China and Korea. The rest come from the southern hemisphere, South Africa, Australia, New Zealand, and some around your own coastlines (US).

Those wild fisheries have quite literally been overfished so a lot of the cultivation has moved back to land. In Australia, I think we produce a significant amount of our species, the green lip, on the land.

But to put all of this into a bit of context around Rare Foods, if you used a wine analogy that 200,000 tons is like a Lindeman’s. It gives everybody a taste for what you described. It’s the most sensational dish I think I’ve ever tried. Trying to describe it to others is very difficult, but for me, it was a bit like pork belly, but it kind of gave you an “oomph.” The Asians say it’s very good for the man. I’ll leave your listeners to interpret what that actually means.

But to me it was akin to, not that I’ve taken steroids, but it was akin to something that really gave you a boost.

Shaun: I think the comparison to pork belly is actually spot on.

Rob: Well, I was having a discussion with a few Western chefs over here. They struggle with cooking abalone because it’s got a very short window for a chef. And what they mean by that is overcooking. It is very easy to do. So they generally don’t like to deal with it on the a la carte Western menus.

And again, that’s a bit like a learned behavior. I think we’ve got a fair bit of education around that in the Western world to do it. It’s a traditional Asian dish, they love it in dumplings.

So our abalone, the green lip, is akin to the grange of the range. There are only a thousand tons of green lip produced each year. Half of it comes out of the water. Half of it, as I said, comes from land-based farms. Our innovation was replicating the wild green lip abalone.

So, for your listeners, those wild quotas have come down year on year for basically the last 20 years. I think even last year there was a 7% reduction in the wild quota. We now represent 25% of that wild quota. We got accredited as a wild fishery, and our comparative advantages are that we can scale up, we can produce more, and we’re not curtailed by quotas.

So, for our marketplace, if they get in our forward order book, They can be assured of two things, the quality of the abalone and also their orders being fulfilled.

Justin: I know you mentioned this as a fishery, but also a land-based process, but can you, because you’re doing the fisheries part of it, can you tell our listeners about that process and some of the innovations that you are doing that’s probably different than other regions around the world?

Rob: Yeah. So in the wild fisheries of course, you know, they basically go and count the numbers that they have and elaborate on those numbers to determine how much they will allow the fishing industry to take out.

So those wild quotas have been going down and down year on, as I said before, to the point that the total allowable catch in some areas in Australia now is zero. Ironically, they call that a sustainable fishery. Last I looked, sustainable was both sides of the equation, both being able to fish and being able to grow.

So, in the wild, the abalone, when it spawns, produces millions of these little spats. And you know, for them to actually land and cultivate, I’ve heard quotes of one in a million. When they’re very small, they’re literally specks of sand that are almost impossible to count.

So the fisheries guys are only counting them at say, kind of like your quarter piece or your dime piece. And that’s when it’s physically able to count. So, watching that process actually unfold in the wild is nearly impossible. On land that process is artificially done.

25-30% of what’s spawned we can catch. They’re put onto two-foot by one-foot sheets, and the spats are settled against there. And when they’re about a dime in size, we move that small one and put them onto big concrete slabs where they grow out over a period of two years.

So that whole process is about three years. At about 15 months we take what we call the juvenile abalone and we put it out onto an artificial reef and let it grow in its natural environment in terms of the swell and what Shaun alluded to before, what it feeds on, which is literally the seaweed as it’s passing.

The little guy pops up, its shell grabs the stuff that’s going past and then pops it shell down. Clamping down is its whole protection. The biggest challenge we have is when we move the juvenile and we bring it about 500 kilometers up the coast. We put them into fishing boxes and attach them to the artificial reef.

That process is pretty threatening to our juvenile abalone. As it moves out onto the artificial reef, that’s when it’s least protected and when it gets snapped off by predators like octopuses, turtles, and little sharks. So, we’re looking at ways to improve that process, but it lives out on our artificial reef for about another two to three years, about a year longer than the farms.

We grow a replica wild green lip. We have divers who go down there and put them down and pick them up. And then we built a processing facility, literally five minutes away from that reef on the pristine Augusta harbor which is about 300 kilometers south of Perth.

We either send it live, shuck the meat, or we freeze the whole thing in-shell and package that up. So, we send one of three products literally throughout the world with 75% still going to our primary customer in Hong Kong.

But we are looking for what we call “master distributors” throughout the world. We’re well down our pathway of securing one in the United States, one in Canada one in the UK. And for a couple of other species we’re looking in alternative Asian companies, Taiwan and Japan and Vietnam.

So, that’s a bit of a summary of the process. Can I help you any further on that?

Maddie: I’m amazed at how long the process is. Of course that makes sense because abalone is, from my limited knowledge of it, a pretty large species and it seems like it needs to be fairly mature in order to harvest it.

But I have to say, I’m shocked that it takes years and years in order to get the abalone to be at fullest maturity.

Rob: Yeah, and we’ve been looking at the growth cycle of our species. The green lip we believe that two to three years underwater is its fastest-growing cycle.

What we’ve noticed in the last 18 months is our abalone are getting larger and larger. And this is because of a couple of things. We’re giving them more space. So, it’s a factor of density and of course food source. We know our reef a lot better than when we originally placed the artificial reef down there some eight years ago.

We are in the process of moving 20% of that reef into faster-growing areas, which have a greater food source with the seaweeds coming through. So, we’re starting to understand a lot more about it. We know, on the farm, density and, and space are akin to growth rates.

And space, basically get those three things right. You’ll get the best possible growth rates. But yeah. Maddy from spat to the grow out on the farm, you’re looking at three years for the grow out that we are dealing with. You’re looking at four, four and a half, five years. So

Justin: There are a lot of topics that I want to go a little bit further into, but one of them, and I think you’ll be able to answer this one, is why the green lip abalone? Is that the species most commonly eaten by us? Or does that one just yield a higher meat content? What’s the reasoning?

Rob: Without a shadow of a doubt, as I said using a wine analogy, it’s the grange of the range. So out of that 200,000 tons that are consumed each year, only 1000 tons is green lip. Only half of that 1000 comes out of the ocean. It is the best of the best, mate. You’re talking about a taste that is hard to compare.

And it is akin to when you pick up one of those boutique wines, you know you are drinking something special. You know you’re eating something special. As I said, my favorite is when it’s shucked, tenderized, thinly sliced and sauteed. I don’t think you’ll eat anything better in your life.

Justin: So, you kind of answered this, but it sounds like a lot of your product is being exported into China and Hong Kong, but what other regions are you seeing this kind of, I don’t know if I would use the word taking off, but where is this mostly going to be consumed? Where is your market?

Rob: It’s traditionally an Asian dish. We don’t sell anything to China, but, our largest customer is in Hong Kong. We are targeting large Asian communities in the Western world. And we’re doing it through what we call “master distributors.”

A master distributor, to us, is somebody who’s going to forward order tonnage over the next 12, 18 months. To put that into context, we would get two or three wholesale inquiries every day. You know, “Can I have 150 kilos of this or 200 kilos of that?” If I had to pack the 120 tons like that, I’d create a whole new organization, which quite frankly is destined for disaster.

So basically, what we are doing is funneling those wholesale inquiries back to the chosen master distributor who will have the cheapest product in the region. Purely and simply, from a freight perspective and they can take the opportunity to put their margins on directly in their regions.

So, as I said, 70-odd percent’s going to Hong Kong. We’ve set up our master distributor in the USA and we’re starting with one in Canada as well. We’ve had a master distributor in the UK and for a couple of other species that we also do through the wild court, we’re pushing Vietnam, Taiwan, and Japan.

So that’s our whole modus operandi. Again, to put that into context for our wild green lip, that comes off our innovation. We’ve basically, presold this financial year and we’ve presold 75% of the next financial year. So, yeah, we’ve got forward demand for it. We don’t set prices until the actual order goes out.

Because, again, from a demand perspective we are highly sought after and the more that we’ve created that master distributor strategy, the more we’ve seen that demand tension force prices up, quite frankly.

Shaun: Forgive me if I’m bringing back some stuff that we already talked about, but would you consider your production of this species ranching in a way?

Rob: That’s what we’ve called it, yeah. We had to differentiate the naming from the on-land farms. The whole genesis of this innovation was basically: How are we going to replicate the real quotas? Because, you know, as it stands right now if they continued on the pathway, you just wouldn’t be able to touch the wild side of the equation.

You wouldn’t be able to touch that wild quota for 5, 6, 7 years, which is hardly a sustainable fishery. But like most human behavior, there was a lot of threat from this innovation. What this innovation has actually proved is that you can do this sustainably, you can now scale it up and, for a planet that’s destined for 9 billion people in the next 10 years, you know, this innovation has indicated a different way of talking about a sustainable wild fishery than has been spoken about before in this context.

So we’re pretty excited about that. What we are looking for is how to grow the largest abalone the quickest. Is it on land? Is it on the ranch or is it back in the wild quota space? If we get into the third aspect of this, we’re dealing with public policy.

But they’ve all put up their hands to come along on the ride, because of course, if they don’t, you don’t have to tell them what the impact is. They’re already living it. They’ve literally closed down so-called sustainable fisheries.

Shaun: So, besides that, what are some of the biggest challenges that Rare Foods faces in production?

Rob: To a certain extent in the Western world, especially in Australia, we’re incentivized to innovate. But the greatest challenge was actually getting the capital from the capital markets to start this business.

And making this business cash flow positive and profitable is without a shadow of a doubt, the greatest challenge. There’s only so much patience with the capital markets to sustain innovation. And yes, we get tax credits and refunds for indicating what we’re innovating in, but still, you know, the market wants us to be cash flow positive and profitable.

So that’s, without a shadow of a doubt, the number one challenge. The second one was when I picked the business up two and a half years ago, it was called Ocean Grown Abalone. We changed our name to diversify and grow. We’re not going to be reliant on one source of revenue, because inevitably we’ll have a bad hair day.

It’s got to be leveraging what we are good at. And in summary, we’ve got the only two aquaculture leases in the state where you can put aquaculture products on the ocean floor. So, that’s a strength. We’ve got a pristine state-of-the-art processing facility on a beautiful marina. I’d say that was a strength.

We can put sales strategies together and move product all around the world. I’d say that was a strength. So, we’re looking at how to leverage those. The most obvious one to begin with was bringing in the actual wild quota products. So, there are two other types of abalone species in our region that are, I wouldn’t use the word inferior, they’re just the second tier. They’re the brown lip and the Roe’s. We’ve been developing products for the marketplace in both of those and we use our processing facility and sales and marketing channels to leverage those.

So, when we go to the marketplace now to our master distributors, we are Rare Products, Rare Foods from the premium Southwest selling a tier-based quality abalone product that starts with the greens, then the Browns, the Roe’s, and the farmed products as well. That has been our initial move and now we are looking at products from the year premium Southwest that will blend with us, and we’re on the cusp of trialing a few others.

Shaun: And if you even just go to the product page on your website, you can kind of see the different tiers and stuff here as well. And something that I find interesting on here is you’re not just selling the meat, you are also using the shells.

And I think this might be something that people who maybe weren’t familiar with abalone as a seafood may be actually more familiar with the use of their shells. I know as a musician I’ve seen guitars with abalone shell inlays in the fretboard. So I think some people may, if they didn’t know what abalone was, they may have recognized the name because it’s known for its gorgeous shell. What are some of the things that you are doing with the shells as well?

Rob: Well, it’s the modus operandi of our business. You, you know, we want to be able to use every aspect of what is that we’re doing.

Well, there’s a great species for that. The whole abalone can be used including the shell. We’re also exploring different routes for the guts. The oil out of the guts is a very sought-after product, capturing it and storing it is our challenge at the moment. The gut can be used for anything from a pet food product to a stock seafood product.

So we’re experimenting with how to do that. We capture an incredible amount of it. We’re up to about one, one and a half tons a month of the gut. So we want to be able to find a home for it. As for the shells, the analogy I’d use for the shells is a bit like gold.

You know, this small percentage that everybody refers to used in jewelry is, very small. There are many uses for it though. They crush it up and they use it in a concrete mix. It looks like a marble. There’s a manufacturing company in Japan that crushes it up and uses it with resin to make hard hats.

So there’s a plethora of uses for the shells. How we collect the shells and let’s call it grade the shells in terms of sizes and state really depends on the customer and the value that the customer sees in it. So, we’re going through that process a bit at the moment.

And the more we explore the more we find. Some left field uses for it, but literally every aspect of every gram of this product can be used.

Shaun: That’s fantastic. And that’s something that we’re seeing hearing more and more about, especially, you know, the last couple episodes that I’ve done with the editor of our magazine, Jamie Wright, he’s talked about companies participating in circular economies and trying to like, as, as much usage of a product as possible, whether you send the heads and frames or the guts out to be ground up and used as fertilizer, but as much as you can use to keep every piece of that animal being used somehow within the economics of the industry is definitely a hot topic right now. And as I said, I think this species is great for that because it is a simple species and every part of it is actually useful.

Like you said you don’t really need to explore too many ideas to come up with ways to use every part of this animal, which is pretty fantastic. And I think that’s something that can be said for a lot of molluscan species. Same with oysters and clams and mussels. I think they’re really good candidates for that circular economy type of thing.

Maddie. Justin, what do you got? What else is going on in your head about abalone?

Justin: I think we’ve almost touched on everything that I wanted to make sure that we covered with this episode. I’m trying to think if there are some areas that I’d want a little bit more detail.

You talked about what you’re currently doing and you also talked about what the future holds and the things that you’re really starting to learn as you, as you grow. And looking at new, innovative ideas. I’m trying to think, Shaun, what else?

Shaun: Well, I just want to speculate a little bit about the future of the marketplace, the global marketplace for abalone, particularly green lip abalone, because it’s a little more specified, a little more niche. You know, we don’t see a lot of it here in the US, at least where we are. As you said, in a lot of the Asian countries, it’s much more popular.

Where do you see the marketplace? Do you see it growing more globally? Do you see it kind of niching down a little bit in certain places? What is, if you were to speculate for the future in the next 10, 20, however many years, what do you think this marketplace is going to look like as it develops and evolves?

Rob: Speculation comes from well thought out strategies well implemented, but  I think I’ve got a few more gray hairs the most around the table, but I lived through that you know, the Chinese restaurants coming into the western world in the seventies.

Then the Taiwanese came in the eighties and the Vietnamese in the nineties. You know, that Asian cuisine came to the Western world and, you know, to a certain extent it’s been Westernized. It’s not the same as you get in the Asian countries. As such, I think abalone needs that same education. As I said, you know, some of the Western chefs I’ve talked to, they struggle with it because the cooking time’s so short. And how they build it into, say, an a la carte menu. But you talk to Asian chefs here, they know how to do it. I think it’s that we are focused on two things with our sales and marketing:

One, as I said, is the master distributor strategy, which is how to get the bulk to the current demand. But we have a retail strategy. We’ve just opened our own retail space down on the Pristine Augusta Marina. If your viewers don’t know, the southwest of Western Australia. It is the most underdeveloped part of the Western world left. In the world you can walk on the most sensational white sand beaches for miles and see no one, you will not get cleaner water in the world. We’ve set up we oversee the Augusta marina, looking at what’s known as the two oceans where the Indian ocean meets the Southern Ocean, you can actually see that swell.

You won’t get an environment quite like it in the rest of the world. So, we’re inviting people down to understand about our innovations through tours. We also offer product and soon-to-be product tastings and of course the traditional cafe service, but we’re on a quest to do that with the master distributor strategy.

Within the next year, we’ll be doing a regional strategy with the local chefs. We live in the Margaret River region, which is one of the most sought-after wine regions on the planet as well. And so retail, wholesale outlets to die for and, and there’s a lot of eateries. So we’re going to help chefs understand how best to take this and use it in cuisine.

So I would hazard a guess, Shaun, if we continue to do this over the next three to five years, we’ll be Australian-wide. You know, abalone will be on the menu. That’s our goal. And once it’s on the Western menu here, it will infiltrate the Western menu in North America and Europe.

And once that takes hold there’ll be a whole new demand for abalone. And we’ve got the best of the best. There’ll always be a demand for the best of the best. That’s true.

Shaun: What wine should we be pairing with our abalone?

Rob: Well, that’s our next innovation.

So about three years ago we did a trial on ocean-cellared wine. As I said to you, we’ve got the only two ocean leases in the Western world in Western Australia that can put Aquaculture products on the ocean floor. So, we took a couple of boutique wineries and put their bottles on the ocean floor to replicate the maturation process using the ocean swell and the constant temperature.

And it was a great success. Why do I say that? It is super. Besides the fact that it tasted good, it was hugely alcoholic. It sold at very good prices. So we’re in the process now of scaling up our ocean-cellared product. And the greatest constraint we see with that is how to tell the story in a 34 billion bottle marketplace.

So that’s what we are very focused on now, but it, excuse the pun, blends very well with our core product, from a tasting perspective, by the way, is the answer to your original question. What’s the best to pair it? In my experience. But yeah, we’re going to the second Rare Food we’re bringing to bear is ocean-cellared wine.

So we’re going to take the premium wines from the Margaret River region and sell them on the ocean floor.

Maddie: I feel like that could be its own podcast episode.

Rob: It is really interesting. We’re in the midst of partnering with a group in France and they use 500-liter vats which is an innovation all of its own, but what they’ve been looking for, we’ve got everything they want.

We’ve got the divers, we’ve got the lease at the right depth, but what we’ve got that they don’t have is a constant temperature. So up in the Mediterranean, they deal with 5 degrees to 25 degrees. And I’m using my metrics, not yours here. So you’re going to have to convert that for your part of the world.

We deal with about 14 to 16 degrees and they are absolutely anxious to get hold of and trial with us what this will do to the ocean-cellared wine. But yeah, we intend to scale this business up.

In September/October this year, we’ve got about two and a half thousand boutique bottles down there at the moment. They’re not hard to sell. It’s really how are we going to cultivate the story and market the production. That’s what we’re working on right now.

Actually, the production process isn’t the complex side of this, but it’s also an exciting part of it.

Shaun: Yeah. What a cool and unique way to diversify. I mean, so interesting. Maddie and Justin, if you don’t have anything else, we can kind of wrap it up.

Maddie: I have one final question, we’ve probably touched on it at some point in this episode, but I would love to hear about what your specific, favorite thing about working with Abalone is.

Rob: My, my discipline’s business, first and foremost. I can’t believe that I’m back in agri products in Western Australia, so you know, I’m pretty much product agnostic. The fact that I love this, that this product is neither here nor there. I hadn’t even tasted it before I got involved in the business.

What really fascinated me, Maddy, was the fact that they sold this concept to the marketplace and listed it. And that in anybody’s imagination is the hardest thing in business to do. And they did it. And now they’ve got something that, without getting on a bandwagon here, the world wants, it’s sustainable, it’s scalable, and it’s environmentally friendly. And even when you look at the way we’re thinking about the wine, the very least the wine’s gonna do is take the emissions, the on-land emissions that it costs to mature a wine away because we’re doing it in the ocean.

And it’s that whole thinking about agri products that we’ve got a real opportunity here to take advantage. You know, the other aspect for me, Maddie, was having been here 30 years ago, Western Australia produces the best agri products in the world, in my humble opinion, along with some of the best mining minerals and commodities.

But she’s always been a price taker. They’ve never really gone and told the world the story about. What it’s all about. And one of the reasons that I really wanted to sit down with you guys is we have to tell the world how good we are. Because we are, you know, the amount of Rare products we have in the premium Southwest are to die for.

So abalone, besides the fact that every one of them is very tasty and they’re all good for you, right? This is, all, this stuff is all good for you. You, you can live on this stuff and you’ll be very fit and healthy. So that’s a long way of answering a very simple question.

I mean, I love the product itself. I actually like, what they call the second-tier product called the Roe’s. I prefer that one. It’s probably a stronger kind of Fishy taste, but I particularly like that one. They’re all good. And the product differentiation in some of the sources and counting the second-tier products. You know, they’re very good in the soups and whatnot, but I particularly like the sauteed or sashimi where you’re actually eating that almost raw product. It’s beautiful.

Did I make you hungry?

Shaun: I was hungry going in.

Maddie: I just had dinner and I’m already hungry again.

Shaun: So, sounds so good. It happens almost every episode. So before we close out and we get your contact information and all that kind of stuff, is there anything else that you want to get out there? A message you want to send to our listeners before we say goodbye?

Rob: Not really. Just to reiterate, Rare Foods from the premium Southwest. Literally as it’s said, RareFoods.com. You’ll find our website we are going through the whole iteration of ESG credentials at the moment to tell that story a little more effectively.

Because as I said, we know that everything we do is sustainable and environmentally friendly, but it’s underpinned by scalable for a 9 billion people marketplace. So, to a certain extent that’s our quest to innovate that opportunity for others.

Shaun: Fantastic. And if any of our listeners want to get in contact with you or have questions or want to learn more what’s the best way for them to do that?

Rob: If they go to our website my contact details are there. Feel free I take phone calls and emails from people all the time. We do respond all the time. So feel free we’ll get back to you. Fantastic.

Shaun: Well, Rob, thank you so much for joining us. We really appreciate you taking the time and I hope you have a great rest of your day.

Thank you so much for reading this episode’s transcript. For more Aquademia and responsible seafood resources, go to www.globalseafood.org.