Speaker 1: Hello everybody, and welcome. Thank you for joining us again
on Seafood Matters Today I'm chatting with Manuel Vasquez. Manuel
is the CEO of Bacha Aqua Farms. Hello, Manuel, and
welcome to Seafood Matters. Great to have you on the show.
Speaker 2: Thank you very much, jam and thank you for the invitation.
And good morning everyone, Thank you, thank you.
Speaker 1: If I could maybe start, how has the global demand
for premium bluefin tuna evolved over the last decade and
how is Bacha Aqua Farms positioning itself to meet these
change in consumer needs.
Speaker 2: Ah, yeah, great question, Jim. I think it's been a
really good business for those who have been on the bluefin.
Over the last decade. We've seen a change in consumer habits,
mainly from I would say the last generation, which was
treating the product just as a commodity. Now we realize
how important is that product in a different type of
restaurants and sushi outlets. Obviously that comes with a different
type of product as well, because now you see consumers
requesting a different set of organ electic attributes into the bluefin.
And at the same time, obviously we see a tremendous
opportunity of growth in those new niches and new segments
that are over and above of what we had before.
As a quote on the bluefin space as well, so
to put it on a nutshell on the last ten years,
there was this stigma on bluetin as well, because we
were an industry that it was having a kind of
dangerous pieces, and for over a decade we had very
tough controls on the amount of fish that we could
get out of the ocean. Finally, last year, for the
first time in a decade, all the scientific community from
the West and the East got together and then they
realized that actually the targets and the abundance of biomass
in the ocean was over and above of the objectives
that we were supposed to achieve within the next five years.
And as a result of that, for the first time
in many years, they gave us a quota increase of
fifty percent quote increase. As you can imagine, it was
a big challenge for all companies because then you need
to increase your structure and infrastructure in order to embrace
that volume. And at the same time, obviously you need
to develop a market that is there, but it still
needs to be educated and needs to be positioned with
the right product and priced. So all these just to
summarize that. Indeed, the last decade has been good, but
the last two years I would say were extremely better
than what we have seen. And obviously we have a
very positive outlook for the years to come.
Speaker 1: That's very encouraging. I would love to come back to that.
But if I could, just before that, ask you what
was your background before joining bach Arco Farms.
Speaker 2: Well, for many years I worked for Nesley, you know
the chuck I played, milch and a beverage company. I
actually started my career over there more than twenty five
years ago. I worked for them in Mexico, Panama, Ghana, Switzerland, Singapore,
back to Mexico, then Dubai for a while back to Mexico,
and then with that just finished the first twenty years
of my life with them, doing many things. As you know,
Nesle is a big corporation that goes some foods and beverage,
so it was a big school for me, even changing
roles within during these years from finance to commercial. Then
I left the company and then I went into tuna. First,
I started in the yellowfin industry with one of the
main companies that is called Tuni in Mexico, and later
on I went to work for Atundolore, which is the
largest tuna fishing company, I would say in Latin America.
So over there I leland the ropes on the seafood
and the fishing and the tuna. And then just by coincidence,
I was invited to go back to coffee for a while,
and with that I finished my yellow fiend experience. After
two years of being in the coffee again, finally I
got this call three years ago and then I madly
fell in love of culture and what you know is
now Bajack of arms. So I'm here to here with
the company away for three years. At that point of time,
we were going through as an transision also in terms
of shareholders, so it was really a nice time for
me to join the company and then go with these
new transition of owners and obviously a strategy for the company. Ah.
I'm also a Mexican national. My background is in finance.
And then I went to study in Chicago Bull and
Gellog for some m b A and marketing degrees, and
as you know, going around all these places, I also
managed to collect a number of different languages to speak,
and that's it.
Speaker 1: Yeah, that's your life. From what you see there madeo
lb tuna and I would start by it made sound
as if I'm trying to catch here, but I'm not.
I'm gonna put my hand up and admit my own
neg ignos on the subject in unfashioned all my life.
But there's just no to there or anything like that
or waters. There's a big difference between yellow fan and
blue fen.
Speaker 2: Yes, absolutely biologically speaking, they don't even look the same,
but even in the way that they behave and the
habitat that they have is also different. The yellow fin
is on tropical waters, which is going out the equator
and a little bit above them below, but that's normally
the place that they have it. Then the blue find
for difference, is normally on the north or really south,
much closer to cold waters rather than to tropical waters.
And it's having a completely different migration pattern which starts
in Japan and cross all the Pacific on the North
Current to California and co goes down all the way
to Encinada and then back again, So that migration pattern
is completely different from yellow fin. Yellowfin is normally associated
to dolphins, so you will see a school of dolphins
together with yellowfin. As a result of that, obviously there
is a completely different technique and the way to catch
and capture that fash. In the case of blue fin,
it is not associated to dolphins. It is much more
associated to sudin, which is obviously what they eat.
Speaker 1: So okay.
Speaker 2: And then in terms of industry, you recognize yellow fin
going in a can, so that's normally the way that
consumer understands the product, and bluefin we normally take it
out of a can and we put it on a
different type of plates, starting from sushi, sushimi and nowadays
the most sophisticated places that you can imagine on white
table restaurants around the world.
Speaker 1: Okay, So if you see it in a Japanese restaurant,
it's bluefin.
Speaker 2: Yeah, because of the taste and the fat content that
you can find, specifically in the case of blue fin,
it tends to it fatten. And this is how even
they got this name. On the different parts of the
body of a fresh that came from the Japanese culture,
so we call toro o toro, which is like the
lower part of the loin or the belly loin as
we call it. Then you have the tchutuo anakami, which
is the side loins and the upper part of the loin,
which in terms of the fat content, is a completely
different color and fat that you can see on the flesh.
In the case of the yellow fin, since the swimming
patterns are completely different, they don't develop that much fat,
so you will have a very lean flash and that
lean flesh obviously is having a different color and a
different taste completely.
Speaker 1: It's really interesting. That's really interesting, I would imagine, I
don't know if it's Before I was going to ask
you about the difference in the flavors, I would have
thought from the weird described that the bluefin with more
fat would have been tisty. But are they not. Are
they just completely different. There's not a case that one
is better than the other. They're just different.
Speaker 2: They're just different. Obviously, the fact that you have that
fat content a different taste, and because it takes a
different taste, is a bit more sophisticated in the way
to prepare it, because you need to obviously take advantage
of these organ elyptic features that you already have on
the fish. And also as a result of that, there
is also a price difference, right, because of the limited
quantity that you have. Is a bit like diamonds, right,
So you don't have many, So then it's just economic
rules demand and supply. If you don't really have a
lot of supply, obviously price goes high. Is a bit
the way that it works.
Speaker 1: Yeah, they're very fast swimmers, are there to.
Speaker 2: Believe, Yes, yes they do. They swim long distances and
really really fast. However, they tend to be in the coast,
need the coast because of the way that they eat
Saudi and this is where we manage to spot that fish.
And what we do is a technique not to actually
fish it, but to capture. So what we do is
a set where we throw the net, we capture the fish,
and we try not to stress it. That's probably the
most complicated part of it. Then we bring a pen
that is connected to the net and then we transfer
the fish into a pen. Thereafter then we are towing
that pen into our farm. Normally we are feeding that
fish for as much as one year. During that period
of time, we are one of the farms, or probably
the only farm around the world that is having a
centralized fitting system. And what I mean be that. Imagine
that you have one vessel in the middle of the
farm and you have twenty pens connected to that vessel.
On that vessel we bring all the sudding that we
are fishing every day, and from that vessel we are
pumping the sudding into the pens three times a day
to society. We also have cameras inside every single pen
at three different levels of debt. With those cameras, we
are monitoring with artificial intelligence, the behavior of the fish,
how much they eat, how they move, and this is
how an operator on this centralized feeding system is pumping
the right amount of booth. So then we grow that
fash systematically to have what we call a steady size,
a steady supply, anesthetic quality, which is the first value
proposition that we bring to all our consumers.
Speaker 1: Very sophisticated operation.
Speaker 2: It is becoming very much sophisticated. It was not like this,
I must say. You know, we were one of the
few companies that twenty five years ago we started shoveling
sudding into the fans really hate as you do. A
stell have farms in Japan and many other places around
the world. In our cases, we came to this level
of sophistication as a result of obviously the engineering and
the necessity of bringing an upgrade into the whole industry.
So we started mimicking this idea from the salmon, which
is not a secret or most of the salmon farms
operate somehow like this. In our case, it was much
more challenging because we don't fit with pellets, we don't
fit with any artificial food. We just fit with souding
on percent souding on the percent fresh not even frozen sadin.
So in in our case it was much more challenging
to have an engineering system that it was able to
support the quality of the southing without destroying it. As
you might not. Souding is composed eighty percent by water
on the body mass composition, so if you don't treat
the souding well, you will destroy it immediately and as
a result of that, even the tuna will not eat it,
so it will be a waste of food. So even
in that particular case, we've been very meticulous in the
way that the technology has been evolving and constructed and
adapted to our tuna farm.
Speaker 1: When you're when you're sitting there taking me wonder, it's
obviously not the same as what we would class as
a traditional farm. Maybe some here or they would have
the small motors as we call them, and they would
feed them and they would grow and get heavier. I
don't think it's it's not quite the same, are you
are you still want to feed them to get to
odd with puld them.
Speaker 2: Right now, as I was telling you, we really changed
the rules on how the industry was behaving. Still two
years ago, I can tell you that there were few
companies in Mexico and they were all going out with
their own vessels trying to get as much fish as
possible because we had this system that is called Olympic fishing.
So what it tells you is that you get out
and get as much fish as you can get in
the least amount of time. It's like giving a ball
of eminem's to a bunch of kids and then tell
them to eat as much. So you can imagine that
it was a bit of a disaster, right. So but
that change finally two years ago we enter into a
new dynamic with the whole industry. And right now what
we are doing is to catch the bigger fish, so
there's no rush. Everyone is having their own take, and
because of that, we just changed completely the rules of
the game and the rules of engagement. Today we don't
get any fish below eighty kilo, so a juvenile is
considered on the twenty five kilos, just to give you
an example, that was the case before. Today we are
just getting adults. So we are getting adults at eighty
kilo and then what we are doing is to fatten
those adults. And then we just converted that fish from
etikilo to probably hundred hundred and ten until we have
that good fat content that I was talking to you about, yeah,
and then the fish is ready to hit the places.
This is not a growth period, it's actually a fattening period.
And that's why obviously it requires much less auding, it
requires obviously less working capitals if we want to talk
about the business, and obviously much more sustainable in all right, So,
which is the main thing that we want to achieve
at the end of the day, So we get a
bit fished, that is requiring less audin, that is also
requiring less time to fatten. And then at the end
of the day that is also closing the cycle on
the reproduction way to make sure that is reproducing several
times before it is actually getting out of the water,
which is what we want to achieve. And by doing
all these steps right, then we have a much healthier industry.
We have obviously a company that this requires hiring less
working capital, and we are a company that is obviously
much more sustainable of what we were already.
Speaker 1: Yes, indeed, I don't know if the tuna is the
same as let's say, well our traditional fish. If I
was to be asked what my favorite cut is and
what part of the fish, every time, I would say
the belly, you have a glu choice. Would that be
the same tuna?
Speaker 2: I think it depends on the balladar, honestly speaking, you
will see, especially in Japan, is highly overpriced. The belly
is really about that, you know, they call it the
toro and toro this is really the part that they
like the most. But if you go to other places
like Brazil, Mexico, Middle East, even some part of the US,
they don't really see that part of the belly as
something that it will be as lightful as probably another
part of the body of the tuna. That's the true.
So that's a challenge going forward for the company to
do that market segmentation right, because if we do that right,
that this means that a tuna should be cut in
pieces to the light consumers in a very different way,
and it's coming over from the same tuna. But if
you're able to name it and labeled correctly, then you
will have obviously an advantage in sending the right product
with the right price to the right consumer.
Speaker 1: Okay, yeah, we are seeing a move towards conscious consumerism.
How does the demand for tresability and sustainability and high
end markets like Japan and America dictate your daily operations
in Mexico, Club.
Speaker 2: Well, you mess a great question because I'm telling you
know the whole company all the time that sustainability is
on every decision that we made every day. It's not
just a label or something that we want to achieve
or something that we write on a piece of paper,
but it is on every decision that we made. And
it's true, it comes with a cost, and it comes
with behaving also in a different way. Just to give
you some examples on what sustainability means for Baja to
start with, just told you the story on how we've
had to change completely the way the industry operated you know,
before going from Olympic fishing into now a more civilized
way of fishing as I describe it, and then as
a result, changing from twenty five kilowfish to eighty kilowfish,
just in the way that we get out of the water.
Top of that, the investments that are around the farm,
in the way that we feed those fish. If I
go even one step behind, every single fish that we
take out of the water, even before we take it
out of the water, there is two observers on each
of our vessels writing every single thing that we do.
So every single set that we do is registered by
these two observers. One of these is the OBSERVERCE corresponds
to the Mexican government to Conapesca in this case, and
the other observer corresponds to ADDC, which is the Inter
American Tuna Tropical Commission, and that's a regulated around the
world that is checking that we do things the right way.
So these two persons are registering on the books every
single set on the amount of tones, on the coordinates
that the fishes, and because of that, we are able
to label that fish that goes into our pen. As
a result of that, whenever we told those fish to
our farm and grow that fish. We have identify that
fish from the minute that we had that set in
the vessel and through the period that we fought on
the fish. We are still identifying every single piece that
we have on the water because it goes on every
single report that we give to the authorities on a
monthly basis. Once we get that fish out of the water,
the first thing that we do is to put a
QR on the mouth with all the trace ability system
that I just explained to you from the very origin,
from the minute that we actually did the set till
the minute that we took the fish out of the water,
and thereafter, if we are sending this fish to whatever
place in the world is, then the consumer will have
the ability just to scan that QR and know what
it is back to back the whole traceability chain. So
all the things that I've described to require a lot
of technology investment, innovation, equipment, gapex and many things that
obviously consumer doesn't see, but for the company are important
to achieve in order to make sure that we are
here for many more years.
Speaker 1: Yeah, it's Dummer above and the global economy, how do
you balance a high cost of sustainable Turner ranch in
with the markets fluctuate and price points.
Speaker 2: Well, Jen, we are trying to get out of that
fluctuation of price points. I think the most important part
is that you take your product out of the commodity
environment and that you are able actually to go to
the higher end of the pyramid, which is the premium
and even I would say it's super premium. In order
to do that, this is why we invest so much
into technology, product development, and even the way that we
feed the fish. So I told you before that the
first value proposition that we have is steady supply, steady size,
and steadic quality. But we have some others which goes
even with the temperature, with color of retention, with the flavor,
with the fact that we are the only company around
the world that is feeding on hundred percent sudding and
one hundred percent fresh, that changed the flavor of the fish. Obviously,
if you give any other type of even antibiotics, some
of the companies are doing is going against the nature,
trying to have affect that is in nature good right.
So we are getting rid of all these things and
trying to go to a space where we are alone
with consumer and because we are alone with the consumer,
then obviously we are not facing this type of price pluctuations,
but we are obviously making a value proposition that is
going over and above our competitors.
Speaker 1: I would say, Manuel, they're pretty, They're very you're tuned,
are very lucky, whether they're feeding on sardines.
Speaker 2: We are blessed. And one of the things is obviously
the strategic vision that even our founders have many years ago,
which was to erect a company with these type of
values and thinking. But the other thing that I must
also confess is that we are blessed because of the
location that we are. There is only four places in
the world around the world that are having this abundance
of Saudi and we are happen to be really at
the end of the California Current, which is known because
of its abundance on Saudi. So Saudin for us is there,
and we are blessed to happen to reach the southern
in a very short distance, so hence we can get
it fresh, hence we can get it for a very
competitive price, and hence we can continue feeding the tuna
in the most natural way that it would happen as
if they were white.
Speaker 1: And I'm not going to say there's nichere, commented, it's
obviously niches and everything, but it's a seasonal any part
of it the cycle, I would.
Speaker 2: Say, the tuna capturing, you can call it seasonal because,
as I said, the water needs to be cold, So
you will normally find this fish mostly between February and June,
and then probably again you will see it in September December,
which is normally when the water is getting colder during
that part of the year. Obviously they are migrating to
different temperatures. We don't know indeed where they are going,
but two times of the year, what we identify that
the fish is really near to the coast of Mexico,
which is normally the place that we get there is
between February and June, which is the best place for
us to go there and get it.
Speaker 1: Yeah, Okay, Obviously back forums, as a major employer in
the reason region, how does a global export business specifically
translate into long term economic stability for the local region community.
Speaker 2: By being there, you know, there will be many ways
probably for the company to segmentate and move operations here
and there. And I think one of the things that
we've seen is that our investors are really interested to
stay there, to stay in Mexico and even to go
on the sites and above. As a result of that,
I don't know if you had, but just last year
we bought a company that is complementary to the business
that we do. The company's name is Baha Marine Foods.
It's also there were our neighbors actually in Ensenada, and
for many years there were partners in even processing some
of our fish. Now, as we're sharing with you, obviously
sudd in abundance in the region, as other elements that
we can use as fish milk and fish oil. So
our investors were really interested in trying to get that
footprint wider and obviously to establish more a kind of
company that is not only you know, going on fishing tuna,
but is more on a protein platform in all senses.
And that protein can be tuna, could be fish, milk,
could be fish old, could be omigas, could be many
other things that even for human consumptual. Very soon we
will we will get there. So the company has been
investing a lot on and then Zenada, not only obviously
increasing the gapex and that the knowledge that we have
in our operations but also looking at other complementary business
I think we have now I've seen the company that
is really making a big commitment with the community in Mexico.
The Ensenada community, I think is a great place for
us to be and as a result of that, we
are now in the business of fish meal and fish auto.
Speaker 1: Yeah, funny, I was good to ask you. One of
the questions I was going to ask you was about
your investment and buying the acquite in the marine foods.
This is integration, reduced financial risk by stabilizing feed costs,
which are probably one of your largest expenses are the.
Speaker 2: Well, as I said, we fish on the sadin fresh
in order to feed the to now. But it happens
to be the case that sometimes we have enough sudin
right that we don't need that saudin anymore at the farm,
and then you still have some saudin on the vessel.
So here the dilemma was can we use that sadin
in a different way, And the answer was yes, right,
So instead of taking that sud into our farm, there
is obviously some other uses that we can give to
the saudin that at the end of the day also
will diversify the portfolio that we have in terms of risk.
Coming to your question, obviously, it is a very smart
way to the risk the company and at the end
of the day have a better use on the Saudi
and then to have this complementary business that goes hand
in hand with the activity that we have, which indeed
is fishing Sudin as well. So Bahamarin was a perfect
fit for all the things that I just described. But
on top of that, we have also a facility over
there that is processing our tuna. The tuna that we
harvest three times a week around the clock is brought
to wins Anada to this facility, and obviously we need
to give take out the gods and do the whole
process of cleaning that fish, putting it into a box.
Now we are going given one step further in terms
of new product development. So we have new processing lines
that are cutting the fish in different portions and trades,
and so we will get a complimentary business by nature
into Bahamarin if we use that facility the right way.
And when you look at the fish mill and the
fish oil, and I will go a bit more on
the fish oil space, there is something that we call
upgrade to human because normally you can use the fish
oil also for pet food and many other things, but
you can also think on fish oil for dha, you
know which you will see it on all the infant
formulas or you will see it also now in adult beverages,
whereby there's a boost of energy to some of the
people that is sixty and above. And you have these
kind of products that are using omigas, dha and many
other things that you can struck from this name Zadi.
So that's the way that I think we would like
to drive the company going.
Speaker 1: Forward really good, really good. Beyond direct employment, how has
the presence of our world class aquaculture facility influenced the
local economy and the technical skull set of the coastal workforce.
Speaker 2: Yes, I think it's having a big impact. In general.
We obviously employed people from the region. Whenever needed, we
bring experts from abroad because sometimes you need people that
has been there already or is having a deeper knowledge
on some specific things. So this is how we bring
people from Peru, from Chile, from many other places, just
to make sure that these knowledge is passed to the
next generation. And that's next generation is people from Mexico
which is already working with us. We are very proud
to be a company that is well recognized for local
employment and local development with the communities. So our corporate
social responsibility goes beyond the fact that we employ local people,
but we do many other activities around.
Speaker 1: How do you ensure that the growth of our global
brand doesn't cut at the expense of local resources or
small scale pushing traditions.
Speaker 2: Well, listen, there is always this line right between the
local fishermen or even the tessenal fishing that we have
also in Ensenada, and the big names or the big companies,
because we are not the only one, of course, to
be very honest with you, this is something that we've
been working with the authorities already for many years. One
of the main things that we've been promotely promoting, sorry
and even pushing very hot, is to draw these marks
on the bay and on the coastal area whereby we
know the local communities are fishing, and we normally don't
go there because otherwise you will disrupt the activity that
they have. So without having a document signed with them,
we respect a lot to each other, and I think
that's the beauty of having a community, right to work
as one. There's a space for everyone, and the ocean
is big enough for everyone to do their own activity
without having any friction. So we respect a lot of
the local communities, and we've been working with the authorities
ready for many many years to even plot those areas
on the raiders of our ships, so our ships normally
will never go to those areas as many other areas
that you have now in Mexico, because as you know,
Mexico as a country has also a big promoter of
the reserve areas of fishing or natural reserve areas of
fishing and have signed many international agreements and commitments not
to fish in a specific places.
Speaker 1: Okay, yeah, it's to look ahead. How do you see
the relationship between global seafood market and coastal communities changing
over the next number of years.
Speaker 2: Well, I think that if we are smart enough both right,
we should find a way to have a space and
the consumer both. And I think that's the case today
in case of of our fish. Whenever you go to
even market, you will see label over there wildfish, which
is normally coming from their testle fishing or the type
of fishery that you are describing. You will see also
farm fish, and that's the main level that you see
between one and the other one. Obviously there is a
big price difference between one and the other one because
it is having completely different attributes, mainly the fat and
the time that it was lapped for one fish and
the other one to come finally to the consumer. But
at the end of the day, I think there's consumer
for both. Right, so you will see the consumer or
some of the consumers are interested molt on a wildfish
for whatever reason. It is even the appliances that they get,
and there is some other consumers. Is that the consumers
that are interested in our fish because they are looking
for different type of attributes. And as I was saying,
if we are smart enough, both of us, I think
we should just keep on driving that dynamic going forward,
respecting a lot of what we do, knowing that there
is place for both. And I think we shouldn't be
thinking that one is and then the other one is
just the different elements that you have in a consumer
basis that obviously you can do what you do in
the best possible ways, and there is always going to
be one for you to pick, right.
Speaker 1: Yeah, you know when you said that, Manuel I was
just my our son. One of our sons is and
lives in Australia, and it's only when we started going
and visiting them that I it's the first time I've
ever seen it. You might see it's common, but I
just picked up and when you were saying a bit
wild un farmed on a menu in Australia, they tell
you on the menu if it's wild or farmed. And
I think it's fantastic, Yes, yes, absolutely, because everybody can
just what works for them.
Speaker 2: Yeah, at the end of the day, consumer is always
having the last word on everything, right, So we just
need to give the choices to consumer and do our
best to make sure that that the end of consumer
is well informed and that they are the one speaking
one or the other one.
Speaker 1: Yeah, when you were talking about the consumer, is there
anything you will wish the average consumer understood about the journey,
say of a blue and tuna from the waters of
Baka to their dinner plate, anything that you feel.
Speaker 2: That well there is. There is always this misinformation right
about bluefeing going extinguished because of the big companies of fishing,
and so that is not the case already for many
many years. I think we are one of the few
stories around the world whereby in nature, the commitment of
the companies, the scientific community, and all regulators including the
governments of all the countries starting from Mexico, the US,
Japan and many others, they were really in agreement to
do something right. And the result of that was that
last year, instead of waiting for another five years to
achieve the objectives that were set, we achieved them last year.
And as a result of that we got the first
small increase on the quota because after all these scientific
evaluation then they came up with a result that it
was showing that abundance of the bluefin is back into
the ocean. So there is very few spieces around the
world that can't actually say or tell a story as
compelling as the one that we have in blue Fin.
The result of that, over the last twenty years, many
companies die in between. Right, Most of the companies didn't
survive that thing. And why they didn't survive because there
was obviously a quota given with a minimum amount of
fish that you could get right. So, and here I
think the big learning for everyone is that sometimes you
want big gains right small investments turn it into big
capital just from one day to the next one. This
is not an industry what you would do something like
if your mindset is that, then you should better go
to different a different industry. But nobody here takes time,
right even to grow the first, to see how the
first is evolving and then to get that quote increase
have taken a lot of time. And that thing goes
with the mindset of person that really thinks on long
term instead of short that really thinks on how to
give the best product to consumer, and really thinks on
how to be really sustainable in nature, not just by saying.
Speaker 1: It okay, okay and lead twenty twenty three, or just
a few years ago a major consortiums acquired a majority
stick and back Acroa Farms. What specific operational expertise have
these global investors brought to the table to drive your
growth strategy?
Speaker 2: Well, it's fascinating. So some of the people sometimes ask
me that question, and they're asking me, like Manuel, how
do you deal with all of them at the same
time as you can imagine you are on a board
of big number of people the smarter than you to
start with, and I have in front of me sometimes
twenty twenty five people in front of me and asking
all these sort of smart questions and trick questions and
very intelligent questions, pushing me really to the edge, which
is fascinating. Honestly speaking, It is fascinating because coming back
to your question and the answer, to have a vast
group of people that is having these kind of experience,
many of them going on agriculture and obviously other type
of business development. It is at the end of the day,
giving me a vast array of expertise and people that
I can take and pick up from the different projects
that we have and from the different problems that we
face sometimes. So I can tell you that specifically Continent
Brain EGI called TIBA are probably the three major ones
that are coming with these expertise, one in agriculture, the
other one in general in logistics, the other one in
general also on the agro in Mexico. And you know,
is fascinating just to have that kind of people with you.
Obviously it's challenging for the reasons that I explained, but
I really love it. Whenever I have a problem, I
define the problem with the nature and then I know
who is the right person to talk to, and I
think that's the beauty to have a boat with these
kind of people. I must also say that we also
have on the boat still two of the main instrumental
people that were with us from the very beginning in
the company. We call them the founders, but indeed they
were there after the first people who started the company,
but they were the ones really reshape the company the
way that it is today. One is from Iceland and
the other one is Mexican. And these two gentlemen they
are still there. And the board also nurturing the conversation,
challenging me but also being that nice year that you
can have when you don't know what you do and
then you have someone that has been there before able
to help and here and mostly give you the best
advice in the best interest. So I really love it,
you know, the fact that we have that type of
board and investors. It gives a new dynamic to the
whole company because it respects the value of where we
came here. And it also propels the company to be
obviously a big corporate and then to keep on growing
the way that we do.
Speaker 1: So you're in a good place.
Speaker 2: Yes, I cannot complain at all.
Speaker 1: Good. It great. The global farm Plufen market is recovering
from the price crash in twenty twenty four where the
Mediterranean prices plummeted due to weak demand. How did bacha
Acra Farm's weather that storm and how have you adjusted
your financial hedge in to protect against similar future potility.
Speaker 2: Well, it's very difficult to hedge against that as honestly,
I can tell you that the answer is no, No,
we did it. It's very complicated that you hedge for
something like this, especially if you don't know where the
price will go. Right, and we were having so much
biomass on the water. I can tell you we are
a big farm and we were a lot of fish
in the water when that thing happened. Obviously we were
optimistic about the future, but at the end of the day,
you're seeing that prices are going down, that's probably not
the best place to be. So no, we didn't. There
was no way for us to act probably different in
a way, and I have thought about these many manys.
So talking to obviously the investors and the way that
the outlook was there, we knew that it would be
a difficult year. We knew that we had to continue
being consistent with what the company was building at that time,
and as I told you, the strength of the company
went really on differentiating the product from the rest. So
we knew that that investment will pay off at the
end of the day, because if we were to have
a more consistent fish, a more consistent color, a more
consistent way of being so sustainable, more consistent way of
feeding the tuna, and we were building on every single
line of those capacities, at the end of the day,
we would be in a better place. Now. I'm glad
to say that that proved to be true. Right, twenty
twenty five was a completely different year for us, much
much better. And I am not complaining about twenty twenty
four by the way. I'm just saying that it was
a tough year. But at the end of the day,
I think the key learnings here is that if you
are consistent on your long term strategy, you might have
a bad year or rainy season, that the end of
the day, you keep on building on those strengths, then
you will be getting a better year on the following
one for sure.
Speaker 1: No, that's that's very good.
Speaker 2: That just.
Speaker 1: Tells us that it's a very professional run. Operations. Credit
to you on that that just comes luded clear.
Speaker 2: Yeah, well, we we are trying, we are trying to
do our best and that and yeah saying those values
are also coming from from before even h. We have
this this change on dynamic on the on the company
a few years ago.
Speaker 1: Yep, the as a saying we have here Manuel, when
the going gets tough, the tough get going, kay.
Speaker 2: H.
Speaker 1: And that seems to sum up your situation. You just dig,
you just dig and then get on with it.
Speaker 2: Well, the island is on the fishing industry, honestly, the
nothing comes easy here. Yeah. I mean, I'm blessed to
be in this place, honestly, and I love what I do.
But nothing comes easy, that's for sure. So it's really
for the type of people that wants to be here
in the long run. And it's really the type of
people that really loves this type of adrenaline of also
knowing that you really need to work hard to get
it done.
Speaker 1: Yeah. I would be known if just hypothetical, I know,
if Japan's market share sashimi grill tune were to decline
and maybe consumers to a high praise sensitivity, which I
don't think is a case, could there be a shift
towards the US market.
Speaker 2: That already happened, Jim, Yes, do you know these new
generations are behaving differently right, So as you know, aging
population in Japan is high, new population in Japan is
with different type of behaviors. So consumption in general in Japan,
if you look at the economics, is going down for
several years already and as a result of that, we
pick up at the right time to develop all the markets.
I can tell you that five years ago, ninety percent
of our cells were in Japan. Today only ten percent
of our sales are on in Japan.
Speaker 1: Yes, that's a big, big shift.
Speaker 2: Yes, yes, yes, yes, so yes, And you know necessity
right when you see obviously the opportunity, but also the
need when you are in a market that you see
that every year is much more complicated to differentiate your product,
to position your product well, to be in a space
where you are along with consumer, where you have the
recognition also from consumer on your brand, then that might
not be the best place to be. Then you need
to find higher graft, right, and that push companies to move,
and that was our case and we found better places
to move. And now obviously we see what is happening
in Japan, but we see it now with different eyes.
Still is a very important market for us because it
will always be is the mecca of tuna. What I
we like it or not so, But at the end
of the day, in terms of sales impact, I can
tell you that there is only a very little portion
of our P and L that is impacted by japan
prices and demand. So and yet we really need to
develop the consumer some other places around the world. You know,
this keep thing keeps evolving. I study at the University
of Chicago, and I had this professor, which, by the way,
later on he won an over Prize of Economy. His
name is Richard Taylor, and he wrote his wonderful book
The Notch So I had really the opportunity to be
with him and to learn from him. It's my professor.
He was all the time telling me that consumers are
following something that is called Heisenberg principle, which is quantum physics, right,
And what it is saying is that the only the
mirror impulse of trying to measure the exact position of
a particle in the space, just by trying to do it,
the intention of measuring it will move that particle to
a different position, so you will never get it right. Right,
And he was all the time telling us exactly that
that's consumer. Whenever you think you know where the consumer is,
it is alway moving to another space. And that's why
I need to notch consumer right. That's why they called
the book is the book is called the nuts. But
that's exactly what is happening today. You know, before we
were having consumers that were worried about quality and sustainability,
and then we were having consumers that were worried about
the experience, right we were having Now we have consumers
that are worried about embodying the brand as I define it.
Speaker 1: Uh.
Speaker 2: And if you look at histogram, TikTok and all different
sources of social media, then you have consumers that want
to be represented by a brand that's a different thing.
That's what I call embodying the brand. So this brand
defines me as a consumer. And because these brand defines
me as a consumer not only because of the experience
and the values and the way that it behaves, but
because of many of the other things that are related
to me, then I decide to be with this company
and this brand and this product that is happening today.
So really the game now is how to be in
that space again with that consumer that is looking for
all these things together at the same time.
Speaker 1: That's fascinating.
Speaker 2: You know.
Speaker 1: I admire ear honesty as well. Manuel, And I was
just thinking when you first started talking on this point
and you mentioned necessity, Well, my dear old late mother
used to have a great saying she used, necessity is
the mother of invention.
Speaker 2: Yeah. Absolutely, I love it, absolutely absolutely.
Speaker 1: As a Mexican based company's exporting globally, how do fluctuations
in say the Mexican peso against the US dollar and
Japanese yen impact your overall profitability?
Speaker 2: Yeah, we we have an impact because all the operations
are in Mexico. If you saw, probably the last four years,
Mexican peso was strong, so we were actually having a
benefit out of that. Then last year we had a
vessel that it was fluctuating a lot, and then you
see a pesto again this year that is strengthening going
a bit up and down. Generally speaking, when you are
really here for long term gym and you have all
your operation here in Mexico, I mean there's no really
a hetch that you can do against PESO that will
last long enough, right, So out of that whatever you
do is just speculation. So I think what investors have
decided is that if we are investing in the country
and we know the operations are here, is because at
the end of the day, you already have the risk
embedded and to the company operation and we are fine
to deal with that type of risk. So yeah, it
comes with I would say that it comes with the
and with the nature of being in a place that
it is having that probably downside if you would like
to call it in terms of effects, but on the
other positive sides, I mentioned the fact that we are
in a marvelous place to fish bluefin. We are in
a very fantastic place in order to fish for the suling.
We have one of the best locations to happen to
host our farm for the fish to grow. And those
things are also part of the operational risk of the company,
which obviously are over and above of whatever the EFS
impact that we have on a day to day basis.
Speaker 1: Yees, as well as pervading employment. Have you reinvested directly
into the local infrastructure.
Speaker 2: Yeah, definitely, yes, a lot. Yeah, yeah, we do you know,
fishing in general, and you will hear it not only
from me, but from many other people that are in
the industry in general, requires a lot of capex, starting
from the vessel. You know, we are somehow fighting with nature,
right the sea is never forgiven. The nets, the equipments,
the technology that you use, even the materials that you
have on the vessel itself requires a lot of maintainance.
So because of all of that, the company has also
invested a lot in having their own facilities to maintain
the vessels, which we do next to the post position
that we have. So we have our own crew and equipment,
and we have developed these people even to learn this
type of techniques and even expertise on engineering, to have
different type of maintenance workshops we call it. So even
from fixing the nets, from the hydraulics, the mechanics, the raiders,
the zoners, all these things, we had to build that
infrastructure locally in order to have people around us that
are able to maintain and service the vessel in the
fastest way possible. I relate these to the f one
when you see a car coming into the pits and
then getting out in two seconds. Right in our case,
we want to do the same. We want the vessel
to come, then we do a pit stop and then
we put the vessel back into the sea, which is
the best way that obviously assets can have a return
on the investment that we do.
Speaker 1: Yeah. Yeah, With climate events like El Nino threatening global
tuna abandon what role does specialized parametric insurance or other
financial instruments play and protect in your local operations and
families that depend on them.
Speaker 2: Ah, there is no direct threat on the abundance. It's
not that the fish is dying because of the temperature increase.
What is happening is that the fish is going to
a different places. Right. So it's like probably you if
you are in a room of what the degree is temperature,
then you want to be in a place where you
have air conditioning, right, so you will move and you
will move probably the way that you move around those places.
And this is happening this year. So we've seen the
fish moving to other places where we normally never see
the fish going before. And by definition, obviously you need
to be a smarter and try to go to those
places and find the fish again, I mean, still is there.
It's not that he's dying, but just moving in a
different pattern. So biologically speaking, the fish is still there.
The abundance is there, and the reproduction is happening, but
just not in the same way and route that probably
you saw it before. Now, to answer the second part
of your question, which is of where we have some
sort of financial hedge against that, obviously we do. There's
a big investment of working capital right which is called
living fish on the water. So we have a big
group of reinsurance issuing a big insurance policy every year
to protect. Obviously the fish that we have over there
now at the end of the day is just the protection.
What we want to do is obviously to act for
before something like that is happening, or if we see
any threat to the fish that we have, and for
those we have a lot of protocols. From to start,
we do monitoring on the temperature water, on the algae
that we have on the water, even on the pollution
that sometimes we find with the water. We work a
lot with Noah in San Diego, which is alerting us
every time that they see a changing pattern on the water,
even the different algies that you can find, and so
so that triggers alarms in our farm and in our
protocols to move even the fish eventually out of the
place that we are uh huh.
Speaker 1: Yeah, yeah, I've acquired processing plants and fishing vessels. There
is an x major capital injection going.
Speaker 2: Well, we just want to keep up going global. I
obviously cannot give more details of what we want to
do next, but I think in general terms, we see
Bahack of Arms being a global company and trying to
have a bigger stake and consumer worldwide. Not only in
bluefin because I was explaining, we are also entering in
some other categories as fish meal, visual and obviously we
want to go big, We want to go global, and
at the end of the day, we want to prove
that Mexico doesn't have to choose between scale and sustainability.
We can lead the world with both. If we do
this right, our lasting impact won't just be to have
great vesh but it will shift actually the standards, so
higher quality, full traceability, respect for the ocean, and a
mindset that is really long term values obviously beat short structure.
And every time I want people to look back and
say that we really help to redefine what Mexicans see,
what means globally, and it's not cheap, it's not commody dize,
but it's really this type of premium, trusted and responsible
product that he's coming from Mexican hands.
Speaker 1: Okay. Given the current skill of the company and the
backing of institutional investors, it's the future public listing or
further consolidation and the American bluefin sector part of a
long term financial roadmap.
Speaker 2: No, No, I don't think so. I think you know,
our group of investors is very solid for the time being.
I don't see these happening. People is really committed with
the strategy that we had for the company, so there's
no need for us to go that path.
Speaker 1: Okay, yeah, yeah, Well that's good. That's good that you're that.
That tells anybody listening that you're in control and you're
not just constantly trying to find something. You're in control.
Speaker 2: Well done, Thank you, thank you for that.
Speaker 1: I The February twenty twenty six FAO Global Globefish Report
shows a strong price recovery for bluefin tuna with high
value segments, experience in stables, seasonal three peaks, global trade
value increasing and twenty twenty four supported by aquaculture growth
and rising demands and a sashimi market. Do you see
that's continuing?
Speaker 2: Yeah, I believe so. I believe so, And that would
depend on how much more sophisticated also we become consumer
is there trying to find new ways even to have
some sort of experience with a product. And as long
as we do this right, I believe that there is
still some places where we can go and still dry
price even higher. As I said, there's a limited amount
of supply. So if you're able to recognize your brind
with a different value, then there's a place for you
to be with consumer and obviously have a better impact
in terms of the willingness to pay that you have
from them.
Speaker 1: Okay, yeah, yeah, Well says that it's looking the future
is looking good.
Speaker 2: Well, we hope for the best and we work out
is to be true.
Speaker 1: As we say here Manuel, if you're the worst, but
hope for the best. Where can our listeners follow you online?
Your social social media presence?
Speaker 2: I think I have an account on linking. Normally, I
am not an active user. I'm more of a passive
user to be very frank with you, But the company
is having you know, Instagram pages at Luvina you will
find us over there. We try to be with consumer
all the time, trying to show what we do, how
we do it, and the type of events that we
also organize around the world. So if you're interested to
be how the product relates with chefs, restaurants, consumers, I
think the best place to find us is on Instagram
and TikTok. As I said, at blue Fina, you will
see us over there.
Speaker 1: Brilliant, brilliant. As CEO, what do you want the lasting
impact of Baca Aqua Farms to be on the Mexican
seafood industry?
Speaker 2: Well, as I was saying, I want to lead with
the example. Mexico is recognized for many wrong things. I
want this to be one of the right things to
be recognized for. As we recognize tequila and mariachi, then
we should be able to recognize ones that we have
also one of the best things industries in terms of
aguaculture and bluefin and I believe we can achieve that
we are on the right place. We have the right people,
which is mainly the thing that it requires. This is
not coming just by fishing or vessels, but it's coming
out of the people that you have in the company.
I do believe that we have the right people to
achieve something as global as we said. Really, I see
the faces on the people committed to what we call
this year the two two six K, which is twenty
twenty six, and it's coming from the two oh two
five K, which is the twenty twenty five. Last year
we call it the two O two because we wanted
to redo the company and redo the innovation, and the
five K was five thousand tons that we wanted to
sell in one year and we did it. So this
year we're looking for the two two six K, So
hopefully by the year and I can come back to
you and tell you that we did it again. But
you know, aiming high. It always requires to have the
right people with the right commitment in order to to
go the full bust and really give the ex draft
for to make sure that we are recognized worldwide for
something different just just bad news.
Speaker 1: It certainly impressed me. Manuel. Let you have your targets,
you know where you're wanting to go, but you don't
just jump at it. You're very professional. Operations.
Speaker 2: Yes, I think what we have done in terms of
the operation setup is amazing. Honestly, I'm all the time,
very proud all the time showing these to everyone, because
I think it's really a lot of work, many years
that were put into that thing to make it happen.
So it's just fair for me to recognize all the
people that it was working to achieve that. And it's
only fair also for people to realize that we are
really in a place and with a technology and with
an operational setup that you know, many even other industries
would like to have. So I think it's a great
work that the people have done in order to come
along this way.
Speaker 1: What would your advice to be be to somebody like
me who wanted to buy a fresh piece of tuna
and cook it? What would you what would be your recommendation?
Speaker 2: I would say that you should start with some niggity's
there's a piece of tune on top and some steam
rise at the bottom. They normally put a little touch
of wasabi in between, and then you put that thing
one piece in your mouth all at the same time.
Try to take some akami, toro and toto in that combination.
Start from the pinky one all the way to the
red one, and you will see the transition and flagwork
from one place to the other one. I think it's
just a very good way to start from there. Then
you will experience something different if this is the first
time that you're trying it, and if not, then probably
you will evolve immediately into some sort of sashimi, which
is another type of h tuna cording that that you
will also do to enjoy it. Is my case, I
always start with any gities because it gives you this
rare combination and having the soft rise in your mouth
with the tuna and with that little soy sauce on
top which is really watering into your mouth, and the
tuna is just melting like butter.
Speaker 1: Yeah. I think the sashimi is a brilliant combination between
all of the tuna. You have the sabi, the pickled ginger,
and the soy. I think it's an amazing combination of flavors.
Speaker 2: Yeah, I agree with you. I agree with you.
Speaker 1: And then and they all they all put something, they
all give something different.
Speaker 2: Yes, yes, indeed, Well when you'll I'll just.
Speaker 1: Stay able, fold up and I'd just like to thank
you very much. That's really really, really interesting and my goodness,
what I've like professional operation. Commend you on it, and
good luck for the future.
Speaker 2: Jim, you are welcome to come to in Snana anytime
you want. We would love to have you here and
show you all the things that were just stalk face
to face, and then we will have even sometimes you
have some good wine and some tuna.
Speaker 1: We well to be to be honest with you, I've
actually arranging for our conversation last night and I was
actually had the area on the map looking looking where
you are.
Speaker 2: That's the start. You're welcome a tripe. Yes, excellent, Thank you,
Thank you very much for the time.
Speaker 1: Je