Oregon lawmakers have rejected funding for a program that supporters said would help the state’s fishing industry.
Initial drafts of HB 4086 allocated $640,000 to the Oregon Coast Visitors Association for the development of companies that turn fish processing scraps into usable products, but with state lawmakers intent on cutting spending to balance the budget, the allotment was removed from the legislation.
100% fish
Of the many restaurants on the central Oregon coast that fillet and serve fish, only one has a formalized program to convert fish processing waste into usable products. It’s the aptly-named Local Ocean Seafood in Newport.
The restaurant is across the street from the bulk of Newport’s fishing fleet, and a central part of the restaurant’s mission is to keep local fish local. A 2021 Oregon Coast Visitors Association study revealed 90% of the fish consumed and sold in coastal communities is not caught and landed there. That realization led to the formation of the Oregon Ocean Cluster, one of 17 such clusters worldwide that promote the upcycling of fish scraps - what’s known as a 100% fish program.
On a busy Saturday afternoon, every table in Local Ocean Seafood is occupied. In the bustling kitchen, chefs deftly prepare artful plates of seafood delicacies.
Beyond the kitchen, in the room where fish are filleted, whole, frozen tuna and salmon lay on trays, almost thawed enough to be stripped of their edible fillets. Once they’re processed, instead of sending the bones and skin to the landfill, a walk-in freezer holds plastic bags full of fish parts stored in cardboard boxes, all destined for Darlene Khalafi, director of Local Ocean’s 100% Fish program.
Three miles up the Yaquina river from the restaurant is the Central Coast Food Web facility. That’s where Khalafi keeps an office and manufactures and packages fish skin dog treats and gourmet bone broth from fish scraps. The Food Web facility provides critical, low financial risk capabilities like a commercial kitchen, along with storage and packaging equipment meant to enable local farmers and fishers to bring their wares directly to consumers.
Scaling up
Khalafi has had products in local stores since last summer, but has yet to turn a profit. More help is needed, she said, and 100% Fish advocates were looking to HB 4086, which would have helped fund the development of 100% Fish businesses.
Khalafi is grateful for the Food Web facility, but she said not everyone has that localized asset.
“The canyon for scaling out of a cottage level or bench-top product development to getting to market is hundreds of thousands of dollars worth of facility, equipment, certifications, food safety measures, and it's just not really a canyon that most small business owners are able to jump,” Khalafi said.
Pacific Seafood has a massive processing plant in Newport, not too far from Local Ocean. The company also operates a fish meal processing facility in Newport. Their Pacific Bioproducts division, based in Warrenton, has been making industrial volumes of fish meal from processing scraps for pet food, aquaculture diets, and animal feeds since 1946. One hundred percent utilization startups are rare, but there is an interest.
The Visitors Association recently convened a blue, or ocean industry, economy conference in Portland. At the gathering of some 200 entrepreneurs, Khalafi learned that many small, rural, blue food purveyors in Oregon have trouble getting their products to the people who want them without becoming their own logistics company, one of several growth-limiting factors.
“We are at the scale where we're successful enough that we've grown up outside of the farmers market and want to expand beyond that,” she said. “But we can't possibly fit any more product in the back of our Subarus. But we're also not at the place where we can afford to get an entire truckload from here to where it needs to go.”
That Local Ocean is the only such program in Newport, a city rich with seafood restaurants, reflects the many formidable challenges to monetizing an industrial waste stream.
“We, as Local Ocean Seafoods, being a legacy brand and having another revenue stream from our restaurant, we are able to start to explore this with the help of grants,” Khalafi said. “But if it were me, Darlene, just trying to do this on my own, it would be insurmountable.”
Despite this, Khalafi and others are encouraged by successful 100% Fish programs in Iceland. With help from the European Union, the Iceland Ocean Cluster is home to dozens of profitable companies that make products ranging from dietary supplements to leather and biopharmaceuticals. And there are successful 100% Fish and crab utilization companies in Washington and California too, but Oregon lags behind.
Marcus Hinz, the director of the Oregon Coast Visitors Association, said funding from HB 4086 would have meant help with distribution infrastructure and coordination, product and market development, and making profitable connections that would otherwise not be made. The collection and assessment of blue industry data is also lacking, which impedes strategic and tactical planning. Hinz said the export of Oregon’s ocean harvest is a loser for coastal communities and the state.
“If the most valuable piece of the fish is not even the food portion, and we're exporting most of the seafood we land, then we're not only missing the value from the food portion, but also we're giving away the most valuable part of the fish every year,” said Hinz. “And I think that is a huge economic loss for the state of Oregon and for local businesses.”
Even though funding for the 100% Fish program failed to make it out of the Oregon Legislature this session, the Oregon Ocean Cluster has vowed to develop and support 100% Fish programs regardless.
