Sustainable Seafood for a Sustainable Future

Samantha Ko hung up her desk phone carefully. She had just finished speaking to the CEO of Aurora
Sustainable Seafood about the possibility of franchising the Aurora business here in Hong Kong.
Samantha thought it was an idea with tremendous promise. Hong Kong was a city full of people who
loved seafood, and fish in particular. In fact, Samantha had recently read that the average person in
Hong Kong ate over 71 kg of seafood in a year, which is more than four times the global average (World
Wide Fund Hong Kong, 2014). However, Samantha also knew that much of the seafood that
Hongkongers loved to eat was fished in an unsustainable way or came from fish farms with potentially
irresponsible farming practices (Hong Kong Coconuts, 2015). Samantha was especially interested in
Aurora’s patented aquaculture system as it provided a way to farm Barramundi without needing to use
high-cost feed or polluting chemicals.

Though Samantha also loved seafood, she had always been passionate about saving the environment.
Opening up a franchise of Aurora Sustainable Seafood would enable her to provide sustainable, fresh
fish for a huge market in Hong Kong, while enabling her to potentially help the oceans and its marine
life. She thought this sounded like a perfect plan.

She got on the phone with her uncle Jim, and filled him in on her ideas. Uncle Jim had made his fortune
in real estate over the last few decades in Hong Kong, and he acted as an investor in Samantha’s current
organic farming business. Once Samantha had explained her plan, Uncle Jim was also cautiously
enthusiastic. Samantha and Uncle Jim arranged to set up a meeting with some of Uncle Jim’s other real
estate mogul friends who might also be interested in funding this project.

Samantha knew she had a week to come up with a persuasive proposal. She got to work.
Background on Aurora Sustainable Seafood

Aurora Sustainable Seafood focused on farming Barramundi fish in what it called ‘environmentally-
friendly’ fish farms. According to Aurora’s founder and CEO, Brian White, the fact that Barramundi do
not need to eat a purely carnivorous diet so they have less impact on food systems, and the way the fish
is farmed using land and ocean-based aquaculture facilities make this type of seafood a sustainable and
healthy product for both the consumer and the marine environment. White began farming fish himself
in university, and experimented with various aquaculture methods until he perfected the system the
company currently uses to farm their fish. The fish are hatched and nursed in land-based tanks, then
complete their growing in modern sea cages (ocean-based). The use of tanks like this enables Aurora to
grow large Barramundi without using chemicals that would pollute the water. In fact, Aurora Sustainable
Seafood is one of the only aquaculture facilities in the world to receive ‘Monterrey Bay Aquarium’s Best
Choice’ rating for sustainability.

Aurora Seafood has grown in size as their ability to farm sustainable and healthy Barramundi has been
acknowledged by chefs and restauranteurs around the US. Currently Aurora farms Barramundi for over
400 seafood restaurants and five major grocery-food chains in the US and Canada, providing both fresh
Barramundi and frozen packaged fillets to their clients. They are actively trying to expand their business
to Asia.

Breaking into the Market

Though Hongkongers love fish, and consume a great deal of it, most consumers got their seafood fix in
one of two ways: 1) by ordering from a menu in a local restaurant, where the chef and restaurant owner
made the decision of where to source the fish, or 2) by buying their fish from one of the two dominant
supermarket chains: ParknShop or Wellcome. Between the two retailers, they controlled approximately
80% of the local supermarket sector (The Economist Intelligence Unit, 2013). Samantha knew if that she
wanted to truly be successful in her new endeavor of opening a franchise of Aurora Sustainable Seafood,
she would need to have the Barramundi sold in one of these two supermarkets. If she did not manage to
convince the main ‘buyers’ for these supermarkets to stock her fish, Samantha would not be able to
access the large local Hong Kong appetite for seafood. She knew she would have to convince at least
one of the two supermarkets to stock her fish in their supermarkets across Hong Kong. She also knew
that there were currently less expensive, though unsustainable and potentially unhealthy seafood
offerings in both supermarkets.

Samantha felt she had a strong market if she could convince one of these relatively powerful buyers to
stock her fish in the fish tanks in these supermarkets, but she also knew if she did not manage to
persuade these buyers, it would be very difficult to make a successful business by simply selling fish to
restaurants in the city.

Costs of ‘Housing’ the Fish

Another worry Samantha had was the cost of housing the Barramundi in Hong Kong. Aurora had
patented a land and ocean-based aquaculture system, which meant that a potentially large number of
tanks would need to be permanently housed and maintained on land somewhere in Hong Kong, in
addition to the ocean-based tanks that would be used to grow the Barramundi to their marketable size.
Hong Kong has some of the most expensive property prices in the world. In fact, research has shown
that Hong Kong has the least affordable housing in the world (South China Morning Post, 2014). Though
Samantha already rented several plots of farmland for her organic farming business in the less-
expensive area of Hong Kong called the New Territories, she worried about renting space that would
allow her to house the land-based tanks for the Barramundi. In contrast to the farmland she currently
rented, she would need an indoor area of at least several thousand square feet for the fish tanks, which
would cost significantly more. Costs for renting old factory space in areas that were in less demand, such
as Fo Tan or Kwai Chung in the Eastern part of the New Territories were currently in the range of
$28,000 HKD ($3595 USD) for 2000 square feet of old factory space (One Day Industrial Properties,
2016). Samantha would also need to acquire permission from the Hong Kong government to operate an
ocean-based set of tanks, though she was more optimistic about the costs and approval of this as the
government had announced its support for a ‘Sustainable Fisheries Development Fund’ (Agriculture,
Fisheries and Conversation Department, 2014).

The vision: Fresh, healthy, sustainable fish for Hong Kong’s large seafood appetite

After brainstorming about the challenges her vision to bring Aurora’s model of fish farming to Hong
Kong, Samantha was still optimistic. Considering Hong Kong’s appetite for fish, and her own desire to
promote a healthier, less destructive way to meet this appetite, she believed her venture was more than
possible. In fact, she had visions of someday combining her currently successful organic farm together
with the fish farm of Barramundi to provide organic fertilizer for her farm from the fish waste in her
tanks. This was a model promoted by a few other green entrepreneurs in Hong Kong already (Time Out
Magazine, 2015).

After having succeeded in convincing the CEO of Aurora Sustainable Seafood to allow her to potentially
operate a franchise in Hong Kong, her next big step was to convince her uncle Jim and his real estate
mogul friends to invest in her vision. Turning back to her computer, she got down to work on her
proposal for their upcoming meeting.