The profitability of processing protein foods is easily disrupted—margins can be attractive, but dramatic swings in commodity costs and fierce competition can cripple even segment-leading organizations.
One category that dramatizes this is aquaculture. A one-step forward, two-steps back pattern characterizes domestic aquaculture, most of which focuses on breeding fingerlings for later release in the wild or into ocean pens. One of the more promising developments for inland operations in recent years involved Bell Aquaculture, a vertically integrated Indiana practitioner of intensive recirculating aquaculture systems (RAS).
Seven years ago, Bell opened a processing plant to fillet the yellow perch it was growing to better serve restaurants. The Midwestern tradition of the Friday fish fry depended on yellow perch from Lakes Michigan and Erie. When the populations crashed, Bell founder Michael Miller saw a value-added opportunity in supplying this mainstay.
Bell boasted of being the country’s largest aquaculture operator, and few would argue. Inputs of 1.2 lbs. of feed produced 1 lb. weight gains in the perch, and technical improvements cut growout time almost in half. Advanced filtration slashed water use to 5 percent of original levels and reduced electric consumption by a factor of three. Business viability was strong enough to attract almost $100 million in capital investments.
A new feed mill that would enable Bell to boost annual production to 6 million lbs. was in the works when lawsuits over unpaid bills started to fly. After several unfavorable judgments, the company went dark. Today, calls to Bell’s Redkey, Ind., headquarters go unanswered and its 10-year-old website is “under construction.”
Bell’s problems notwithstanding, forecasts for North American aquaculture remain upbeat, with groups like Tides Canada and the Conservation Fund’s Fresh Water Institute nurturing technical advancements in closed-loop RAS. The fish themselves have been modified to thrive on plant protein rather than fish meal. The sustainability of aquaculture using fish meal has been challenged as unsustainable. Thanks to genetic modifications, Bell’s perch were able to digest soybean meal.
RAS is the best bet for industrial-scale operations. They used to be plagued by what Phil Shambach, owner of Romney, Ind.’s Tippco Fish Inc., calls “aqua shysters,” but operating conditions are improving. Biofilters developed for the municipal wastewater industry now can be purchased directly by operators like Shambach and integrated into their RAS as components, providing an alternative to pricey turnkey systems that made financing difficult.
“Aqua shysters were a big black eye for the industry,” says Shambach, “but that era has pretty much ended.” Today, the biggest hurdle to commercial success is the vertical integration needed to deliver processed fish to retailers and foodservice operators.
Tippco raises tilapia, a species that requires only 0.9 lb. of feed to produce 1 lb. of meat. “We can compete with anyone on quality and safety,” Shambach says, “but to get into supermarket chains, we need much higher volume to offer processed tilapia.” Until then, Tippco distributes live fish through Asian grocery stores, where shoppers select the fish of their choice and either take whole or have it filleted while they wait. Retail prices range from $3.10-$3.50 per pound, or the equivalent of $9 a pound for the fillets.
Frozen tilapia from China, by comparison, retails for as little as $1.99 a pound. The opacity of growing and processing practices in China make some people leery, however, creating an opportunity for domestic firms that can leverage today’s interest in locally grown food from trusted and transparent sources. Those food trends and the ability to operate indoors north of the Mason-Dixon Line have led economic development officials to forecast a $1 billion seafood business in Indiana alone.
Automated deboning of poultry
Inland aquaculture may be in its infancy, but poultry processing is an advanced and mature processing segment. To maintain their position as the global gold standard, U.S. firms depend on continuous improvement, making advanced automation a priority.
Deboning is poultry processing’s most labor-intensive activity, accounting for 35 percent of processing personnel by some estimates. Self-powered cut and trim tools boost throughput per person compared to knives. A more automated approach was featured by Meyn America Inc. at the recent International Production and Processing Expo (IPPE) in Atlanta. The Ball Ground, Ga., division of Meyn Food Processing Technology B.V. demonstrated the TDS M1.0 system, shorthand for thigh deboning solution. It follows a previously released automated breast deboner.
Meyn brought the processing plant to Atlanta’s exhibition hall, constructing an enclosure with insulated metal panels to showcase TDS and a new shackling system for its Flex cut-up line, which automatically cuts various components of the back half of a bid. The bigger star was TDS, which separates the kneecap from the fillet while leaving the oyster muscle unscathed, minimizing the risk of bone fragments in the fillet.
Yield is comparable to manual deboning, according to Dallas Smith, sales manager. “It just takes a whole lot less people than hand deboning,” he adds. The mid-range model debones 1,000 thighs a minute and requires eight staff members to load and tend to the line, a rate of more than 15 pieces per person. A cone-line worker with a trim tool produces 7.5-8 pieces a minute; working with a knife, the rate is 4.5 per minute, according to Smith. Both options involve repetitive motion, he points out.