Everett Omstead
Max Robertson
Eugenio Lauria
Brendan Lisogurski
Sarah Stuart
University of Guelph
Ruben Burga
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John O Foods' innovation is to use aquaculture and help to address the worldwide shortage of seafood. The company's state of the art processing facility had been operating at only about 30% capacity, driving up costs substantially, as the supply of whole fish that needed value added procedures could not meet their processing capacity. John O Foods partnered with a First Nation reserve 10 hours north of their plant on Manitoulin Island to provide a supply of fish using aquaculture techniques. In the process, the Sheshegwaning community contracted with the company to obtain 5500 Metric Tonnes of feed to grow about 10 millions pounds of rainbow trout by 2022 in off-shore low density pens that were then supplied back to John O Foods for processing.
Identifying a shortage in supply for their state of the art fish processing facility, John O Foods realized they had to be innovative to increase their throughput. This realization took them to Manitoulin Island in Ontario, Canada where rainbow trout farmers have prospered. Despite the Island's success in farming rainbow trout, many of its practices were stuck in the past, and if John O Foods was going to be a part of the industry, they wanted to bring new practices being developed around the world for cost-efficiency and a sustainable and traceable protein source for consumers. The idea proposed by their aquaculturist was to use off-shore submersible cages that can avoid ice, heavy storms, and possible poachers. Being off-shore, a pen in deeper water with stronger currents also replicates an environment these fish are more accustomed to, never seeing the same water twice. A totally off-shore fish farming operation such as this would be the first of its kind in a fresh water ecosystem.
To do this John O Foods needed to either receive a costly permit through the Ministry of Natural Resources, which would consume as much time as it did money, or partner with a First Nation reserve on the Island. They elected to have a meeting with the Sheshegwaning First Nation who were very excited for the opportunity of economic growth on their reserve and quickly shared with John O Foods that they wanted to participate. This was a huge step forward for John O Foods, as a First Nation reserve has sovereignty over their land and resources. They were granted 5500 metric tonnes of feed, which resulted in a capacity of almost 9,500,000 pounds of Rainbow Trout, even more than they had hoped for!
Presently, John O Foods harvested their first load of about 24,000 pounds out the new cage and have about 56,000lbs left to harvest before winter. The current plan is to gradually ramp up the operation to the maximum feed quota of 5500 metric tonnes by 2022. When the operation meets its scale, it is projected to produce over 9,000,000 pounds of whole rainbow trout and over $22 million in revenue.
The initial inspiration for this innovation came from a shortage in fish supply for John O Foods. This had owner John Omstead looking for a reliable supply source, and introduced him to aquaculture on Manitoulin Island, Ontario Canada. Since then, it has become much more than just a vertically integrated source of supply. John O Foods hopes to be pioneers in the fresh water aquaculture industry. They want to provide consumers with food that has a sustainable story and build an industry that the world will rely upon to save the depleted oceans and lakes, providing the worlds' growing population a sustainable source of protein in the process and indigenous (First Nation) communities a sustainable source of income.
Fish farming was the route that John O Foods decided to take to control the uncertainty of their supply chain. Their family tradition of giving back had an impact on the local First Nations community and a positive impact on their own manufacturing processes. One of many things that intrigued owner, John, about aquaculture was the feed to protein ratio. "The amount of feed to grow 1lb of rainbow trout is only 1.3lbs, compare that to beef which needs 10lbs of feed to 1lb of beef, or chicken and pork which need 3-4lbs of feed. I believe this is a great example of how sustainable seafood is." This is a tremendous movement towards innovating the freshwater aquaculture business with submersible off-shore cages that will likely promote more efficient and cost-effective practices around the island.
At maximum scale, John Omstead says the project could ''double the sales of John O Foods". Vertical integration also provides the company a more controlled source of supply, allowing them to give seafood buyers a harvest schedule to plan sales around. Vertical integration also absorbs margins and gives the company more flexibility to control costs.
There is a distinct benefit to society globally and locally. John O Foods is tackling the global shortage of healthy food supply for a growing population. John O Foods is also tackling social inequalities through their partnership with Sheshegwaning First Nation, a community that in need of jobs and economic growth. In the partnership, Sheshegwaning receives first right of refusal to provide the fish farming labour, and owns a 25% stake in project and receives 25% of operating income. Consumers also get a product from a sustainable and local source that through their operational transparency aims to farm fish in a responsible manner.
From the environmental viewpoint, growing healthy fish in a controlled way in Lake Huron which had been previously depleted of biomass because of the contamination of Zebra mussels is a positive development for the health of the lake.
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