Prior to companies like you entering the market, was there sort of this, I guess, shrinking of the industrial capacity in the types of places that you want to source from in, say, Europe or maybe, you know, parts of the U.S. that was shrinking due to this sort of global deindustrialization phenomenon? And has that contributed to today, now that it is a high growth category, or at least for you, it's a category that there are, you know, that's constricted and it's constrained because of the sort of years of like hollowing out from global competition?
Yeah, I mean, I think it's the same story as like all American manufacturing stories. There were once booming canneries on either coast of the U.S. and California, probably read Cannery Row, or on the coast of Maine. There were these bigger, more industrial canneries, and a combination of factors contributed to those shutting down. Basically, like all most canneries in the U.S. shut down like 15 years ago. Today there are, this is an estimate, but I would say like five-ish in the lower 48, and then probably several more in Alaska. Alaska is where you would find some of the bigger or more industrial canneries that are doing like commodity Alaskan canned salmon, etc. But yeah, I think due to a combination of factors, I know that there were really stringent FDA rules put in place about 15 years ago that a lot of the canneries in the U.S. couldn't upkeep, couldn't manage. Some of the fisheries really declined. So the Pacific sardine and anchovy fisheries, you know, there have been moments of real decline on both the East and West Coast, and with the decline of those fisheries and the shutting down of those fisheries, the canneries followed.
Hello, and welcome to another episode of the Odd Lots podcast. I'm Tracy Alloway and I'm Joe Weisenthal. Joe, as you know, although you sometimes forget — you love fish.
If there's one thing I know about you, Tracy, you love fish. You love seafood, right? All right. That's where you were going, right?
That's exactly it. All right. Famously, some people, some long-term Odd Lots listeners will have heard this story before. But the first time Joe ever invited me over to his house, he asked if I had any dietary restrictions. And I said something like, you know, like, I eat everything, but I'm not a big fish person. And then I went over to his house and was promptly served poke bowls.
It's all right. They're actually really good. And I do eat fish on occasion. I'm just not that big into it. Like I eat crab cakes, oysters. I just have to be in the right mood for fish. I get it. One thing I have never eaten, though, is sardines.
Oh, yeah, I've had sardines. I like them. Yeah. I don't know if I have, like, a strike. Do you just, like, take them out of the can and just stick them in your mouth? Like, yeah, I think I have, or I'll like, I'll put them in like a salad or something like that.
Yeah. Yeah. Okay. Yeah. Yeah, sure, sure. You know what? I'm definitely taking sardines and just, like, taking one out of a can of it for sure. Okay, well, I personally don't eat fish.
That's not your thing. Don't you eat a lot of fish?
Because of the taste. But it turns out it's becoming a pretty convenient distaste to have, because we are now facing a sardine shortage. When we talk about tinned fish, it intersects with a bunch of interesting things that we talk about all the time or that come up. So it's like global supply chains generally. I think, you know, I've said this a couple of times on the podcast, but one factoid, fact phenomenon that I very much remember from our trip to Alaska is how much fish is caught off the shores of Alaska. It's sold in the United States, but first it takes a detour to China.
That's right. So even if you buy U.S.-caught Alaskan salmon, the chances are it's probably been processed through China.
Yeah, I find that to be really interesting. I find the sort of marketing of fish and the sort of branding, because one thing that we know about tin fish, especially over the last five years, is there is a whole like new demographic that doesn't just associate it with like the cheap Sunkist or no, Starkist tuna or whatever that brand was. You know, the sort of low-end tuna, there's sort of emerged as like high-end, high-end premium version of canned tuna, which I really like. Canned tuna that's emerged. So there are all these sort of like different market things now. And then you mentioned climate and some of the questions about, you know, supply and fish stocks, etc. There are many different intersecting stories of the canned fish story.
Yeah. And the big news right now is that Morocco, which apparently exports something like 50% of the world's sardine supply, has imposed a ban on sardine exports because of, again, citing reports, overfishing. Apparently there's not enough plankton either to feed the little sardines.
Which is sad because it means that penguins also don't.
And penguins not in Morocco.
Yeah, but penguins elsewhere in the world also don't have enough to eat.
So we're going to talk about all these things. We're going to talk about what's actually going on with the world's sardine supply, where sardines come from, where fish in general comes from, how it gets processed, what makes a good tinned fish versus a bad tinned fish. And I'm happy to say we do, in fact, have the perfect guest. We're going to be speaking with Becca Millstein. She is the founder and CEO of Fishwife, which of course specializes in exactly that: tin fish. And Becca, thank you so much for coming on Odd Lots.
I have to say, when I finally eat my first sardine, I think it will be a Fishwife sardine.
I can't wait for that day, Tracy, I truly can't.
The packaging has got me. The packaging got me.
It's very good. Brand new. That is definitely a big focus. When I started working on the brand, you got to kind of do a bait and switch. There are a lot of people out there.
Like, are there going to be fish puns in this conversation?
Excellent. I mean, many, as many as you'll allow. But yeah, we had to really counter-position from what Americans associated with canned fish, which as you probably know, was, you know, white and blue super commodity non-branded canned fish. So obviously we went the hard left, all hand-illustrated, super beautiful branding. And we have our illustrator, you know, on staff creating illustrations for us every single day.
So tell us about the origins of Fishwife then. You just touched on it there. But the idea was to kind of make a premium tinned fish product that would maybe make Americans think a little bit more like in Europe.
Right. In Europe, tinned sardines are like a nice thing to have.
I remember my mom getting very excited about them.
100%. Yeah. So I, I'm from New Hampshire. Originally I studied abroad in southern Spain in college in a city called Granada. And Granada is a very interesting variety.
I have, yeah. I've had some of the best jamón of my life in Granada and cheese.
Oh my gosh, they really know how to do it.
The interesting thing about Granada is that, to my knowledge, it is still the only city in Spain that serves three tapas with every drink. So if you get like a little glass of beer or a little glass of wine, they will bring you out, whether it's, you know, very low-end potato chips or very high-end, like sardines. All those jamón, you're just always being fed beautiful little bites. And I was super inspired experiencing that and just seeing how delicious these little snacks were, because, you know, they're super simple, no cooking involved. But the ingredients were of such a high quality that it just tasted so, so good, no matter really what little bar I was at. So between that and seeing the way that Spaniards eat and, you know, really just treasure the high quality of their food products, and then traveling to Portugal, which is like where everyone has their conservas experience. And that's certainly where I had mine in Lisbon, you know, seeing these beautiful shops with rows and rows of gorgeous tin fish, like it could not have been more different than my Market Basket in southern New Hampshire. And I at the time, certainly, you know, at age 20, wasn't like, I'm going to do this for the rest of my life. But during the COVID-19 pandemic, I started eating more canned fish. Really, really good for you. Ready to eat straight out of the tin. Shelf stable. You know, when we were all trying to not go to the grocery store as much as possible. And there was sort of a light bulb moment, you know, seeing, I know you had Alison Roman on this podcast.
Seeing folks like Alison Roman and Anthony Bourdain and David Chang, like they had all been espousing how incredible, especially, you know, really high-quality anchovies or really high-quality canned tuna. It was only in the ether. And I was starting to see in my own peer group, you know, people posting pictures of like little meals they were creating at home with tinned fish, which is fascinating because I really feel like before COVID that that was not a habitual thing for people to do, like make a beautiful lunch and post it on Instagram. So weird. And obviously now it's completely ubiquitous. All of those factors combined added with the bump. I think the canned fish category saw like a 10% year-over-year increase during the COVID-19 pandemic, which is crazy. It has not been like that since, broadly. And I was like, Americans deserve a better product. I think they'll be willing to pay for it. So that was, that was really the origin of the company.
So there's sort of like two different strains I'm interested in this conversation. I want to make sure you touch on both. So that's sort of the brand origin. We'll talk more about brand and marketing. Now tell us, like, and we'll get into more, but give us the basic supply chain that you have right now of, you know, the short version of like where a fish is caught and the steps it takes until I get it in my kitchen. Like that, give us like the overall sequence.
I'll give you the most simple, straightforward version first.
Which is because the thing that you'll learn throughout this conversation is that every seafood supply chain and canned seafood supply chain is completely different and very strange. So the first, I'll give an example of is our Cantabrian anchovies.
So we source our anchovies from a tiny town in northern Spain called Santoña. And if you go to this town, Santoña, you will be blown away because it is completely occupied by anchovy canneries. Like that is the town. You walk through this tiny city and it's like every canned anchovy brand you've ever heard of, their logo like plastered on a big warehouse. So in that case, the fishermen are going out like six miles from shore. They're using the purse seine method of fishing, which is, it basically is like a big, big wide net that's cast out into the top, sort of the top of the ocean. It encircles a school of fish. And then the net is sort of pulled together and the fish are brought out of the water and then immediately put on ice. And then they're brought, you know, six miles into shore and they're taken to the anchovy auction. And they are marked with a number that indicates the quality of the anchovies. So that's like the size of the anchovy. Has it been damaged? The fattiness of the anchovy. It's marked with that quality signifier. And then the bids begin. In this case, there's usually one or two folks from each cannery. And keep in mind, these canneries are, by and large, maybe all multi-generational family-owned. The cannery that we work with was started in the 1940s by a man who now has had three generations of offspring that have taken over his business and, you know, have grown and expanded his business. So anyway, today, the grandson of this man goes to the anchovy auction and he will, you know, have a price in mind to bid on these anchovies. And he'll buy a bunch of anchovies. And those anchovies will be taken mere three blocks away from where that auction is happening. And they'll be immediately processed, which in this case means, I mean, I'm going deep in the processing.
That's great. That's great.
So that means that the anchovies will be basically headed and tailed, so their heads will be clipped, their tails will be clipped, and then they will be put into a barrel of rock salt in layers. And they'll be left there for anywhere between 12 to 36 months. And actually, the longer they're in there, the higher quality they are. That being said, three years is a very, very, very long time. So it's a really expensive product and a pretty limited market. Our anchovies are on average held in there from 12 to 18 months. And during that time, you know, they're cured and they develop all that beautiful flavor that we associate with anchovies. And then I'm going to keep going. At the end of that 12 to 18 month period, they're removed from that bucket of rock salt and their skin is removed. And basically like the beautiful little pink anchovy that we all know and love emerges from what otherwise looks like a pretty normal little silver fish. Like honestly, when you see an anchovy for the first time, like a lot of people think they're sardines because they are these substantial long silver fish. So anyway, they're cleaned, that lovely little pink anchovy is removed and then laid one at a time in the tin that you, you know, you see when you buy a Fishwife anchovy product. They're cleaned extensively, they're rinsed and washed, and then those cans are filled with extra virgin olive oil in our case, and they're steamed. And then anchovies are very unique because unlike the rest of our tinned fish products, they are cured through that salt curing method. So they're not actually heat-treated, which makes them a dramatically more sensitive product and a much shorter shelf life product than the rest of our tins. So the rest of our tins have an average of between a five to seven year shelf life, which I think you can imagine is like truly incredible to have as a food business owner. Like there are very, very few products with that shelf life. Anchovies only have about a year-long shelf life because of that salt curing method. And they can't be exposed to heat because they'll disintegrate. So that's like the simplest supply chain.
And how concentrated is that?
That being said, anchovies as an actual product are by far and away our most complex to, you know, store and manage and ship.
So you didn't have any prior fish experience before you started this company, right?
I did not. No. I had been in the working world for about four years in the entertainment industry before starting the business.
So listening to you describe the fish supply chain in a place like Spain, it sounds very familial and sort of close-knit and probably hard to break into. Like, I imagine you can't just go and find a fisherman and be like, hey, you want to be our supplier? How did you actually manage to source these particular people and start building up those relationships?
Sort of the interesting crux of the story is in CPG, and, you know, in emerging brand CPG, it's very well known that quote-unquote getting line time or getting a co-manufacturer to work with you is very challenging because, you know, who knows if you're going to be around in a couple of years. Your product probably has a bunch of weird like better-for-you ingredients that the co-mans don't want to deal with. They would much rather work with much, much bigger companies that they can rely on to produce massive batches of whatever product you're working on. This case is a bit interesting because when I started the business, I was reaching out to, you know, mostly co-manufacturers, factories, suppliers, etc. in America. And first and foremost, everyone was like, why are you trying to start a canned fish business? Like, the canned fish industry is declining. Why don't you do pouches? The pouch industry is booming. And I was like, that's really not the vibe I'm going for, guys. Honestly, it doesn't really capture the European romantic aesthetic. So that was definitely at play. It wasn't like, trying to think of another industry. I don't know, a beverage. Beverage is always, you know, kind of going up into the right. It wasn't like I had a bunch of other young entrepreneurs that I was competing with for this line time, and it wasn't like the category was, yeah, off like a shot. It was flat or in decline. So I think when we reached out to these European canneries, which I started doing, you know, started with the American manufacturers, like get in touch with, and then very quickly started reaching out to manufacturers in Spain, Portugal. There is this, you know, America is the biggest market in the world. Establishing a market in a foreign country is, you know, near to impossible because of all of the marketing and brand-building work you have to do. That being said, it's this incredibly attractive market. There's, you know, very, very affluent, really high-paying customers. So I think when we reached out to these canneries, they must have seen that. They must have seen, okay, here is, you know, someone who's going to work really hard to try to build a market for this really premium product in America. And we don't then have to go do that work because, again, nearly impossible to accomplish. And, you know, we have capacity. Like these canneries, they are mostly not operating at, you know, three shifts a day, seven days a week. Maybe they're operating at, you know, one or two shifts a day for five days a week. So there was some capacity at all of these canneries that we reached out to. I think the crazy part for them is seeing how quickly an American business can grow because, you know, as I mentioned, these businesses have been around for generations. They're family-owned. They're not venture-backed. They're not looking to, you know, scale in a few years and exit. Like the way that we think about business in the U.S. is just so different from how these businesses are, you know, conceiving of their own. Like if they have 5% year-over-year growth, that's amazing. Flat, fine. In some cases, I don't want to generalize, but like they're certainly not trying to grow 250% year-over-year. So I think, you know, Fishwife has been around for five and a half years now. The demand has been revealed for these products. And I think watching these partners that maybe have been fine with 5% year-over-year growth and seeing Fishwife, you know, volume requests triple, quadruple year-over-year, it's like hard for them to wrap their heads around.
So I take it you had a few different structural opportunities because, okay, at that point, the sort of like premium cans were not really a category yet. The existing canneries actually did have some slack, so there wasn't an intense competition to get in there. But just sort of like basically, how did you, from a business-wise perspective, solve that? You still have a cold start problem. You have like no customers on day one, etc. You have to like get some capacity. You don't really know what end demand is going to look like. How do you go from, I guess you're, as they say in the startup world, like the zero-to-one question, even if it was a little easier than maybe other DTC categories, what was the actual process of going to like, I've got to place an order and sell it, and like the commitments that you had to make to place that order?
Yeah, it's a great question. So our zero-to-one year was 2021, and it had a distinct supply chain from the one that we have today for the most part. So as I mentioned, when I started working on the business, I was looking at and open to a supply chain both in North America and Europe. So in the first year of the business, I started working with, the first cannery we ever worked with was a tiny micro cannery in Oregon, on the coast of Oregon. This is mostly servicing sports fishermen from, you know, the West Coast, whether in California up to Washington. So like, we're not talking mochas here. This is people coming in, bringing their catch and saying, hey, make me, you know, 500 cans of tuna. So that was the first cannery that we started working with. One in Washington state, which was a very similar profile, micro cannery, super hands-on, no MOQ. And to be honest, what's the most used for?
Oh, great. Thank you. So yeah, speaking to the issues I mentioned earlier, a huge issue that startups face is, you know, I want to start a beverage company. You need to make 50,000 units of your sparkling water brand, you know, on your first round before you have any demand, before anyone knows who the heck you are. So all in all, we didn't have a MOQ issue. We certainly didn't have it in the domestic canneries because they are so, so small. And then when we started working with our first cannery in Spain, which we still work with today, we still work with the cannery in Washington state, that MOQ is still on the smaller side. I think it was maybe 20,000 units, I think. So that year, you know, I think I ordered 20,000 units of our sardines with preserved lemon. And it lasted us maybe the entire year. But it was super messy. Like, I had no idea what I was doing. I mean, demand planning, it was probably the worst thing I met in the entire company. Half of them. So we, like in the Oregon cannery, we went out of stock unexpectedly. We were out of stock of two products for three months. Like that is what the zero-to-one year looked like. It was stop-starts, etc. But all the while, even with those stops and starts and even with that very small amount of inventory, I was really able to build the brand that year. Like, we still got a lot of press coverage, we still got a lot of influencer coverage. And, you know, was able to build the brand even though the supply chain has since transformed significantly.
