Seafood Value Rescue
One-line solution summary:
SmartFish's Value Rescue Model uses markets to improve fisher livelihoods, conserve marine ecosystems & offer consumers responsible choices
Pitch your solution.
Small-scale fisheries employ over 100 million people, mostly in developing countries. Consumers increasingly demand for sustainably produced seafood, but most artisanal fishers aren't able to access this market segment. The SmartFish Group is a social enterprise based in Mexico that combines market incentives, traditional practices and new technologies to fix Mexico's artisanal seafood system. Our Value Rescue Model begins with the sustainable management of wild fish stocks and addresses every step of the production system, empowering small-scale fishers to access better-paying markets and offering consumers environmentally sustainable, socially responsible, and fully traceable premium-quality seafood. Our company partners with these cooperatives to sell their products in preferential markets. We harness growing consumer demand for sustainably caught seafood to create incentives for marine conservation, drive socioeconomic development in small-scale fisher communities and create more resilient, fair, and sustainable supply chains. Our Model is replicable in other emerging economies by local partners.
Film your elevator pitch.
What specific problem are you solving?
40% of the planet's fish stocks are over-fished or collapsed. According to the World Bank’s “Sunken Billions” report, as much as 83 billion dollars are lost annually in foregone economic benefits compared to what could be generated through more sustainable management of fisheries. Small-scale fisheries employ over 100 million people globally, and most are in developing countries. In Mexico, like much of the developing world, artisanal fishers are caught in a race to fish. They are driven to land as much fish as they can catch, without regard for quality or the future of their fish stocks. They transform valuable, high-quality protein into barely edible mush through their poor handling practices. Fishers are forced to sell their catch at the prices dictated by intermediaries. Mexico’s fishers lose out, investing greater effort for smaller catches and adding 80% less value to their fish than the global average. Consumers lose out, since they cannot be sure where their fish comes from, what species it is, or whether it has been safely handled and won't give them food poisoning. Large seafood buyers such as supermarkets and food-service companies cannot find reliable sources of quality, sustainable seafood demanded by their customers.
What is your solution?
SmartFish’s Value Rescue Model addresses the inefficiencies and misaligned incentives throughout the complex small-scale seafood system. We address the entire value chain, beginning with internationally recognized standards to assess and improve the management of wild fish stocks. We partner with small scale fisher co-ops to improve how seafood is caught, killed, handled and processed; how to implement cost-effective logistics solutions; and how to process and freeze seafood applying food safety standards, thereby creating jobs in coastal communities. We help the co-ops improve their internal management so they are better able to meet buyers’ demands, transforming them from price-takers to entrepreneurs. Our seafood company is transforming the supply chain dynamics. By buying directly from well-trained co-ops we are able to offer our customers, both within Mexico and in the USA, high-quality products at competitive prices with guaranteed traceability and food safety. Fishers earn 30 to 60% more. Our seafood company only buys seafood that this verified as sustainable by a third party. We practice open book negotiations with the cooperatives so that all parties understand the costs and profits of each step of the process. This radical transparency and shortened supply chain are disrupting in the traditionally opaque seafood sector.
Who does your solution serve, and in what ways will the solution impact their lives?
The direct beneficiaries of SmartFish’s work are a) the fishers who receive both training and a higher price for their catch (30 to 60%); b) the cooperatives that obtain specialized consulting services and tools to better manage their businesses; and c) local community members who gain employment in seafood processing. Coastal communities capture both the added value from processing and the increased long-term stability from improved fisheries management. Spoilage is reduced by 30%. SmartFish's collaboration with each cooperative is co-designed with local leaders. We have developed tools to comprehensively analyze the cooperatives’ business performance - from the technical (e.g. catching techniques) to the administrative (e.g. cost-based accounting) - and thereby uncovers ways to optimize quality, food safety, efficiency, profitability and other business facets. By improving quality and differentiating their products, fisher groups are able to gain access to market segments that offer better purchase conditions. Ongoing progress is measured in the adoption of new techniques and behaviors. The final goal is for the fishers to sell products to preferential markets without technical assistance. At the other end of the supply chain, consumers have the option to buy healthy, traceable seafood that supports fisher communities.
Which dimension of the Challenge does your solution most closely address?
Improve supply chain practices to reduce food loss, scale new business models for producer-market connections, and create low-carbon cold chains
Explain how the problem, your solution, and your solution’s target population relate to the Challenge and your selected dimension.
Our Value Rescue Model increases the quality and market price of wild-caught seafood, creates shorter, more transparent and equitable producer-market connections and create incentives for marine conservation. The carbon footprint of artisanally-harvested, wild-caught seafood is lower than that of any land-based protein. Our model significantly reduces spoilage, and by freezing and consolidating production, we reduce the carbon footprint of transportation since the products can be shipped by land instead of by air as is the case for fresh seafood. Rather than focusing on exporting Mexico's high-quality seafood, we target Mexico's growing urban population to foster national market demand.
In what city, town, or region is your solution team headquartered?La Paz, Baja California Sur, Mexico
What is your solution’s stage of development?
Growth: An organization with an established product, service, or business model rolled out in one or, ideally, several communities, which is poised for further growth
Who is the primary delegate for your solution?
Which of the following categories best describes your solution?
A new business model or process
Describe what makes your solution innovative.
SmartFish’s innovation has been to draw on experiences from diverse disciplines to develop a proven, triple-bottom-line intervention model for artisanal fisheries. We use market incentives to change fishers’ behavior regarding sustainability. SmartFish’s expertise in, and focus on business analysis and development for artisanal cooperatives, as well as a deep understanding of the seafood market is unusual in the artisanal fisheries and marine conservation sectors, which tend to focus primarily on the harvest or fishery management problems rather than the entire supply chain. We have incorporated tools and lessons from the small-scale agriculture extensionists, but because we work in a sector that harvests highly-stressed, wild resources, cannot increase production. We have to find efficiencies and creative approaches to enable fishers to earn more while catching less. Another important innovation of the Value Rescue Model is installing freezing and vacupacking capacities. Freezing significantly reduces spoilage and enables the cooperatives to consolidate product and reduce shipping costs. It also gives the cooperatives negotiation leverage by removing the pressure to sell their highly perishable product at the price dictated by the buyer. Although it has been challenging to cultivate acceptance for frozen fish in the gourmet market segment in Mexico, buyers and final consumers are increasingly understanding that well-handled, frozen fish can be of equal or better quality than fresh fish. SmartFish's direct to consumer sales increased by 100% since the beginning of the COVID-19 pandemic.
Describe the core technology that powers your solution.
Our Value Rescue Model draws on a suite of technologies and practices to empower small-scale fishers to reach consumers with high-quality, sustainably produced, and fully traceable products. We train fishers in the use of traditional Japanese fish-killing and bleeding methods which improve taste and extend shelf-life. Since the vast majority of artisanal fisher co-ops in Mexico the use rudimentary, paper-based systems for recording landings and managing their inventories, we work with a Mexican software start-up to develop and continuously improve a digital traceability/business management system for artisanal fisher co-ops. In addition to offering final consumers information about the seafood by scanning a QR code on the seafood package, the system provides the cooperatives tools to streamline their operations, including payroll, sales and real-time records of their inventory. This is especially important given the perishable nature of seafood. The system also generates the official landing reporting data that the cooperatives must submit to the government, drastically improving the accuracy of these reports. Much of the work of SmartFish’s field staff focuses on changing habits so that these new technologies are adopted and consistently applied. We are constantly looking to incorporate new technologies in our process. Our wish-list includes affordable biodegradable packing materials, solar energy freezers and technology to utilize fish-processing waste products in small-scale facilities.
Provide evidence that this technology works.
Seafood companies, NGOs and governments view full traceability of seafood products as a key tool to fish illegal, unregulated and undocumented (IUU) fishing and to improve food safety. The Global Dialogue on Seafood Traceability (GDST) was launched in April
2017 as a seafood industry forum dedicated to drafting the first-ever global standards for seafood traceability SmartFish and our traceability software partner, Plenumsoft Marina are member of the Dialogue Advisory Group and are following the GDST guidelines in the co-development of a system that is adapted to the requirements and particular challenges of small-scale fisher organizations. All the fisher groups that collaborate with SmartFish are implementing the traceability system to record their landings and trace their products through the processing facilities and delivery to their buyers. Products packaged for final consumers have a QR code that consumers can scan using the Nadir Traceability application to trace their seafood back to the fisher. The software makes traceability possible, but for it to work fishers and processing plant staff also have to develop new habits to consistently register key data points in the system.
Please select the technologies currently used in your solution:
What is your theory of change?
Our Theory of Change is based on unlocking market incentives to drive more sustainable fishing practices. Access to better markets increases fishers’ income in the short-term and improved fisheries management can ensure the viability of their business in the long term. In Mexico, like much of the developing world, artisanal fishermen have little incentive to adopt sustainable fishing practices. Fishers are caught in a race to fish and rewarded for landing volume, without regard for quality or the future of their fishery. The resulting low quality of fish drives consumers and suppliers, ironically, to imported seafood, most of which is domestically available. On the other end of the seafood supply chain, Mexico’s growing middle class, with growing purchasing power and awareness of sustainability, is demanding more responsible seafood. To generate supply of sustainable products from small-scale fisheries and to help fishers overcome the vicious cycle of overfishing, SmartFish empowers them to analyze and then improve their social, environmental and business performance.
Through this triple impact approach, fishers, with SmartFish’s help, can rescue the value of their catch and produce premium quality seafood that is independently verified as socially and environmentally responsible. By comprehensively analyzing a cooperatives’ business performance from the technical (eg. catching techniques) to the administrative (eg. cost-based accounting), SmartFish discovers ways to optimize quality, food safety, efficiency, profitability and other business facets. In order to generate demand for sustainably produced seafood and create pressure to improve fishing practices. Demand for high quality, sustainably produced seafood in Mexico currently exceeds supply.
SmartFish offers advice and technical support to large seafood buyers, namely retailers, for the elaboration and implementation measurable, time bound, sustainable seafood sourcing policies. Using tools developed by other civil society organizations, SmartFish helps retailers analyze the sustainability and potential reputational risks of the products in their seafood portfolio and identify strategies to improve the fisheries they source from. SmartFish’s buyer engagement model is based on the experience of the members of the Conservation Alliance for Seafood Solutions.
Select the key characteristics of your target population.
Which of the UN Sustainable Development Goals does your solution address?
In which countries do you currently operate?
In which countries will you be operating within the next year?
How many people does your solution currently serve? How many will it serve in one year? In five years?
We currently directly serve 350 fishers in six artisanal cooperatives in four states in Mexico. In one year, we plan to serve 500 fishers and in five years we plan to serve 5,000 fishers both through direct intervention and by transferring our know-how to other organizations.
What are your goals within the next year and within the next five years?
Over the next three years SmartFish Inc plans to expand from one retail store to 10 stores in Mexico City and other major cities. We plan to increase sales from 30 ton to 130 tons of processed seafood from 15 cooperatives.
Over the next year SmartFish NGO will continue to document and improve our tools so that over the course of the next five years, we plan to expand to serve 5,000 fishers. Our scaling plans include training local NGOs in different parts of Mexico to apply our tools and support them to implement the Value Rescue Model with ongoing technical assistance from our staff. We collaborate with NGOs working on sustainable seafood in other parts of the world. We would like to share our model so it can be applied in other emerging economies by local partners that have a better understanding of local conditions and challenges.
What barriers currently exist for you to accomplish your goals in the next year and in the next five years?
SmartFish's Value Rescue model seeks to fundamentally change fishers' habits, supply-chain dynamics and seafood buyer decisions. These changes take time and require significant presence in coastal communities. At this time, travel restrictions represent the biggest barrier to growing our impact. Our field staff has not been able to visit the fisher communities we serve since mid-March 2020 to prevent introducing the COVID-19 virus to isolated communities with limited access to medical services. Although we have been able to continue supporting the groups with whom we already work, it is more difficult to establish rapport with new groups via digital means, which is slowing the on-boarding of new groups.
Technical barriers we have encountered in our model include: 1) affordable biodegradable plastic bags for vacu-packing fish; 2) mobile, small-scale processing plants with solar freezing capacities that can be moved to remote fishing communities with intermittent or electric power grid, to process catches during the fishing season; 3) technology to utilize processing waste (skin, bones) in a cost-effective manner in small-scale processing plants.
A financial barrier is access to low-cost capital for the cooperatives to invest in processing infrastructure and repairs to meet food safety standards.
Another barrier is the limited action on stock assessments, fisheries ordinance and enforcement of fishing regulations by the federal agency responsible for fisheries management in Mexico. These are necessary for third-party validation of sustainability.
How do you plan to overcome these barriers?
To overcome the travel restriction barrier, we have continued to advise fishers and their cooperatives in existing partnerships remotely using Whatsapp and Zoom. Despite the connectivity challenges in some regions, fishers, cooperative leaders, and processing plant staff have quickly adopted these digital technologies and continue to make progress despite the in-person absence of our technical staff. One cooperative has even finished the construction of its processing plant with remote support. We are seeking advice to develop safety protocols for visiting communities once national travel restrictions are lifted. Small-scale fishers have been severely affected by the pandemic and many have no sources of income since their buyers suspended purchasing. In the case of the cooperatives that already sell to SmartFish, we are currently their only buyer and we have maintained pre-pandemic price premiums. Many groups are looking for new market channels and have approached SmartFish to explore potential collaborations. We are also actively collaborating with local NGOs to further our field work.
We are looking for partners to address the technical barriers. We can offer access to fisher communities and logistics support for field pilots.
By supporting the cooperatives to improve their internal administration, we help them improve their credit worthiness.
To address the public policy barrier, SmartFish is an active participant in a collective impact initiative that is driving change for sustainable fisheries in Mexico.
What type of organization is your solution team?
Hybrid of for-profit and nonprofit
If you selected Other, please explain here.
The founders of SmartFish NGO realized early on that in order to reach the final buyer, the fishers needed a commercial partner. They tried to work through existing seafood distributors but sadly, discovered that the distributors were using the relationship with SmartFish to “greenwash” other seafood that did not come from sustainable sources. This is why in 2015, we launched SmartFish Inc., a seafood trading company that serves as a “good intermediary and created the SmartFish Group hybrid.
How many people work on your solution team?
SmartFish NGO has 10 full-time staff and SmartFish Inc, the seafood trading company has 3 full time staff and 1 contractor.
How many years have you worked on your solution?
The organization was founded six years ago.
Why are you and your team well-positioned to deliver this solution?
Dr. Hoyt Peckham founded SmartFish in 2013. His understanding of the challenges faced by artisanal fisheries stems from over 20 years of experience of working and playing the ocean as scientist, diver, fisherman, surfer, photographer, and entrepreneur. We realized early on that in order to reach the final buyer, the fishers needed a commercial partner. In 2015, we launched SmartFish Inc., a seafood trading company that serves as a “good intermediary”. Hoyt continues to serve as President of SmartFish’s Board of Directors. Our experienced, committed and diverse team provide our fisher partners with the technical know-how to reach preferential markets: Alex (fishery technician) and Enrique (oceanographer) and Ivan (aquaculture engineer) help fishers optimize the quality of their catch, implement traceability systems, design small-sale processing facilities, process seafood and obtain food safety certifications. Carlos and Octavio (economists) provide specialized business consulting services to artisanal fisher cooperatives and help the obtain funding for infrastructure development. Rocío (marine biologists) and Ashely (social scientist) systematize our work and monitor our impact. Andrea (biologist) engages with large buyers, namely supermarkets and food service companies to develop sustainable sourcing policies. NGO director Cecilia (geographer) ensures the team can operate at its full potential with administrative support from Rosa María (accountant). Javier (aerospace engineer) is CEO of SmartFish Inc, the company that buys sustainable seafood from artisanal fisher at a price premium and designs cost effective solutions for their products to reach preferential markets. He is supported by Ana and Fernanda in sales.
What organizations do you currently partner with, if any? How are you working with them?
SmartFish’s culture is one of collaboration and complementarity with fisher organizations, national and international civil society organizations, the private sector and government agencies. Our goal is to enhance the impact of other institutions and take advantage of existing capacities to avoid duplicating efforts. We work with federal, state and municipal agencies and collaborate closely with Mexican and international NGOs that have considerable experience in marine conservation, fisheries management and developing policy proposals. In Mexico we collaborate with Pronatura Noroeste, Comunidad y Biodiversidad, Niparjá, The Nature Conservancy Mexico, Conservation International Mexico, Environmental Defense Fund Mexico, Fondo Oaxaqueño para la Conservatión de la Naturaleza. We also collaborate with the international organizations Ocean Outcomes, Sustainable Fisheries Partnership and Fish Wise. SmartFish's role in these collaborations is to help the fishers that work with these organizations on conservation projects, gain access to better paying markets in order to incentivize conservation efforts. SmartFish NGO is a member of the Conservation Alliance for Seafood Solutions. We intend to strengthen these collaborative efforts by offering our know-how and experience in the design and implementation of market incentives and synergies with the private sector.
What is your business model?
SmartFish Inc. is self-sustaining through seafood sales and as the company’s net income increases, it will increase its investment in fishery improvements projects. SmartFish Inc. has a retail store in Mexico City and sells seafood to high-end and restaurants and hotels in Mexico City and the Cancun area, in other small-scale retail outlets throughout Mexico and exports seafood to the United States. Sales to restaurants and hotels have been suspended during the COVID-19 crisis but the company was able to focus on direct consumer sales. We have had a sustained 30% monthly growth at the store since March and there has been a significant increase in home deliveries.
SmartFish NGO’s key customers are the fisher cooperatives on the supply-side and large seafood buyers on the demand side. Our technical assistance to the fisher cooperatives and companies is currently supported by donations from foundations in the United States and Mexico.
Although the company and the NGO operate independently, our alliance enables us to advance projects in fisher communities much faster since the cooperatives have a potential commercial partner and clear goals to work towards.
Do you primarily provide products or services directly to individuals, or to other organizations?
Why are you applying to Solve?
We are applying to Solve for the prestige and visibility the prize would bring our venture and to replicate the model in new fisher cooperatives in low-income communities in the states of Nayarit, Oaxaca, and Veracruz. It is also an opportunity to publicize our work so others may learn from it as well as to meet and learn from other innovative Solvers across the planet.
In which of the following areas do you most need partners or support?
Please explain in more detail here.
We are looking for partners to help us address the technical barriers we
have identified, including environmentally friend and affordable
packaging materials, mobile processing plants with solar-powered
freezing capacity, and cost-effective technologies to re-purpose fish
processing waste (skin, bones, etc.) in small scale processing
facilities. We can offer support with logistics and access to fisher
communities for pilot testing.
We are also looking for expertise in social marketing for rural communities and business development.
Do you qualify for and would you like to be considered for The Andan Prize for Innovation in Refugee Inclusion?
Do you qualify for and would you like to be considered for the Innovation for Women Prize?
Do you qualify for and would you like to be considered for the AI for Humanity Prize?
Do you qualify for and would you like to be considered for the Future Planet Capital Prize?
Explain how you are qualified for this prize. How will your team use the the Future Planet Capital Prize to advance your solution?
SmartFish Inc empowers artisanal fishing co-ops to produce verifiably sustainable seafood, and sell their catch through the channels we opened in the Mexican market and to discriminating retailers in the US sustainable seafood markets. We achieve rapid growth by converting our co-op partners' existing catch to more responsible production.
From 2016 to 2018 we determined the best sales channels to be our store and exports.
We opened our first store in August 2018. Sales increased 315% from opening to July 2020, with 100% growth during COVID (March 2020 to May 2020).
The second store opened in August 2020.
In September 2020 we will receive funding from Multiplier Sustainable Seafood Impact Fund to open 4 more stores between 2020 and 2021.
Expansion 2020 to 2024:
12 stores in Mexico City and major cities in Mexico
Co-ops participating increase from 4 to 16
Number of fishermen impacted will grow from 475 to 1,600
Sustainable seafood will reach 650 tons or more sold annually.
Mexican sales will increase from ($USD) 181,000 to 1,980,000 and Exports sales from ($USD) 43,200 to 720,000
We will use the prize to open more stores, increase online sales and working capital, as well as presence in US market.