Oyster, caviar producers struggling to stay afloat
California’s farmed seafood takes a central place on Michelinstarred restaurant menus: Monterey abalone, served in its shell with smoked avocado and seaweed confit at L’Auberge Carmel; sturgeon rillete topped with Tsar Nicoulai caviar, encased in slivers of persimmon for a balanced bite at Lazy Bear.
Now, with the coronavirus
“Are people willing to pay for a premium local product?”
Jackson Gross, UC Davis
closing restaurant dining rooms, the farms that produce these delicacies are struggling to stay afloat.
Seafood farmers cite as much as a 90% drop in business once restaurants began shuttering in March under California’s shelterinplace order. The lack of cash flow presents enormous challenges to the aquaculture industry, as
fish continuously need to be fed even when sales vanish. And it’s not easy to find new markets for products often seen as a luxury.
“A few retail places might sell oysters, but it’s nothing compared to restaurants,” said John Finger, CEO of Marin County’s Hog Island Oyster Co. “You just can’t stop selling things for a long period of time.”
California’s aquaculture industry, which includes farmed trout, clams and mussels in addition to higherend abalone and oysters, represents about $200 million in annual sales, according to Jackson Gross, an aquaculture specialist at UC Davis. That’s tiny compared to the dairy industry, for example, which sells about $9.4 billion in milk each year. So much of the seafood in grocery stores comes from overseas, where the cost of labor is significantly lower. That leaves local aquaculture farmers to compete in the live seafood space, which up until March has meant mostly restaurants.
“Are people willing to pay for a premium local product?” Gross said. “They’re doing that at restaurants, but they’re getting the frozen stuff from the big chain stores.”
The same could be said for local wild seafood. Fishermen are concerned about how they will find a market for their product when the commercial salmon season begins May 1.
Some local aquaculture farmers are now shipping product nationwide, like Hog Island Oyster Co., but that wouldn’t work for farmers who don’t have the name recognition. Others don’t even have a place to process their fish, because many processors have ceased operating until restaurant demand returns.
Still, it would take a lot for aquaculture farmers to dump seafood like dairy farmers have with milk.
“It’s different than other agriculture commodities. It’s a huge, longterm investment,” Gross said. Some oysters take two years to grow, sturgeon might take four years, caviar-producing fish take 10. But if you hold on to all your fish too long, you might risk disease and water quality issues.
Monterey Abalone Co. is continuing to feed its 250,000 abalone, which are growing in cages underneath the wharf in Monterey. Owner Art Seavey estimates more than 90% of his business relied on restaurants, and all of those sales are gone. The rest counts on customers walking up to Monterey Abalone’s shop on the wharf, but those sales have plummeted as well. In the first half of April, the company sold $1,800 worth of abalone. Normally, sales would reach $15,000$20,000 in the same period of time.
That’s resulted in dramatically reduced hours for the company’s 10 employees, which also means there are fewer people to harvest the kelp needed to feed the abalone.
With the abalone eating once every two weeks instead of every week, their growth rate will slow, potentially having longterm impacts.
“The abalone will be less robust, less healthy,” Seavey said. “If there were to be a disease challenge, then they may not be able to withstand it.”
Hog Island, which operates an oyster farm in Tomales Bay, a shellfish hatchery in Humboldt Bay and multiple Bay Area restaurants, has laid off twothirds of its farm crew. But as waters are beginning to warm up, oyster management requires even more labor because the bivalves are growing faster.
Workers are thinning the oysters as much as possible so they have room to grow, though that’s not necessarily desirable with oysters. The majority of what Hog Island sells are called “extra small” oysters, which are prized for their silky texture and sweet flavor. But those oysters will soon grow too large to be desired for straightup slurping.
Finger is confident all will work out if Hog Island’s restaurants can reopen this summer, when the weather is warm and people want to barbecue bigger, meatier oysters. That’s also when tourism brings large groups to farms in Marin County to picnic at the farm and shuck pounds of oysters.
“Oysters are a very convivial food that people like to eat in groups,” Finger said. “If this goes into June or July without seeing sales come back in an appreciable way, it’ll really start to impact the farm.”
Hog Island’s vertical integration allows for some benefits. Usually the restaurants sell its own farm’s oysters as well as oysters from elsewhere. But if sales remain slow or restaurants must operate at half capacity, Hog Island can prioritize its own.
Not surprisingly, caviar producers are facing similar challenges. Concord’s Tsar Nicoulai Caviar has lost 50% of its revenue.
“When you think of a pandemic you don’t think of celebrating with caviar,” said Ali Bolourchi, president of Tsar Nicoulai Caviar.
The company has avoided layoffs, with owners and other top managers no longer taking a salary until business returns, according to Bolourchi. The upside is caviar comes from female sturgeon, and the male sturgeon can be sold for meat.
The farm sells fish and caviar to Whole Foods, and the continued sales have been crucial.
Similarly, Michael Passmore is grateful Passmore, his small sturgeon farm about 20 miles outside Sacramento, sells plenty of fish in addition to caviar. Still, Passmore’s products are particularly beloved in the restaurant industry, which typically makes up more than 75% of sales.
The company was already in the midst of a rebrand and website redesign, which Passmore had to quick redevelop because some imagery wasn’t coronavirus appropriate — think groups of people laughing, hugging and slurping caviar off of each other’s fists.
But the project has also helped bring new energy as it expands its membersonly caviar club that launched about a year ago. The club is enrolling new members every day, as the nation’s wealthy recreate restaurant experiences at home, sometimes spending up to $1,500 per month. Fortunately, the year’s caviar harvest already happened in January and the little eggs can be stored for months.
“It would be pointless to spend all this time trying to get our wholesale business back right now,” Passmore said. “For chefs and farmers, when something breaks, there’s no option to go home. You figure it out.”