00:00:02 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. 00:00:17 Speaker 2: Hello and welcome to another episode of the Odd Lots podcast. I'm Tracy Alloway and I'm Joe Wisenthal. Joe, as you know, although you sometimes forget. 00:00:27 Speaker 3: You love fish. If there's one thing I know about you, Tracy, you love fish. You love seafood. Right, right, that's where you were going. 00:00:36 Speaker 2: 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 pok bowls. Yeah, that 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 crabcakes oysters. I just have to be in the right mood for I guess I get it. One thing I have never eaten, though, is sardines. 00:01:13 Speaker 3: Oh yeah, I've had sardines. I like them. Yeah, I don't know if I have like a strike. 00:01:18 Speaker 2: Do you just like take them out of the can and just stick them in your mouth, Like. 00:01:22 Speaker 3: Yeah, I think I have her, Like I'll put them in like a salad or something like that. 00:01:25 Speaker 2: Yeah, okay, yeah, salad sardines. 00:01:28 Speaker 3: But I've definitely taken sardines and just like taking one out of a canon eating it for sure. 00:01:33 Speaker 2: Okay, Well, I personally don't eat fish, don't 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. 00:01:46 Speaker 3: 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 that I very 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 for us. 00:02:13 Speaker 2: That's right, So even if you buy us caught Alaskan salmon, the chances are it's probably been processed through China. 00:02:20 Speaker 1: Yeah. 00:02:20 Speaker 3: 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 tinfish, especially over the last five years, is there's a whole like new demographic that doesn't just associate it with like the cheap sun kissed or star kissed tuna or whatever that brand was. Either the sort of low end tuna that's sort of emerged, this like high end premium version of cantuna, which I really like cantuna that's emerged. So there are all these sort of like different market things not to and then you mentioned climate and some of the questions about you know, supply and fish stocks, et cetera. There are many different intersecting stories of the canned fish story. 00:03:01 Speaker 2: Yeah, And the big news right now is the Morocco, which apparently exports something like fifty percent of the world's sardines supply, has imposed a ban on sardine exports because of again sighting 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 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 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 tin fish. And I'm happy to say we do, in fact have the perfect guest. We're going to be speaking with Becca Milstein. She is the founder and CEO of fish Wife, which of course specializes in exactly that tinfish. And Becca, thank you so much for coming on oud. Lots I have to say, when I finally eat my first sardine, I think it will be a Fishwife sardine. 00:04:04 Speaker 4: You can't wait for that day. Tracy, I truly can't thank you so much for. 00:04:08 Speaker 2: Having packaging has got me. The packaging got me. 00:04:11 Speaker 4: It's very good grating. It was 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. 00:04:20 Speaker 2: Like, are there going to be a fish punch in this conversation? 00:04:25 Speaker 4: As money as you'll allow, but yeah, we had to really counter position from what Americans associated with canfish, which, as you probably know, was you know, white and blue super commodity, non branded canfish. So obviously what the hard left all hand illustrated, super beautiful branding. And we still have our illustrator, you know, all on staff creating you illustrations for us every single day. 00:04:55 Speaker 2: So tell us about the origins of Fishwife. Then you just touched on it there. But the I was to kind of make a premium tin fish product that would maybe make Americans think a little bit more like in Europe, right, and tin sardines are like a nice thing to have. I remember my mom getting very excited on your present. 00:05:13 Speaker 4: Yeah. So I'm from New Amshure. Originally I studied abroad in southern Spain and college in a city called Granada. And Granada is a very interesting city. Beautiful. Have you been there? 00:05:25 Speaker 2: I have. Yeah, I've had some of the best timona of my life in Granada and cheese. 00:05:29 Speaker 4: 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 free top us with every drink. So if you get like a little glass of beer, a little glass of wine, they will bring you out, whether it's you know, on the very low end, potato trips, on the very high end like sardines all heimone, 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. You know, they're super simple, no cooking involved, but the ingredients were of such a high quality that it just tasted so so get 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 conservative experience, and it's certainly where I had mine in Lisbon, you know, seeing these beautiful shops with rows and rows of gorgeous tinfish, 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 twenty, wasn't like I'm going to do this for the rest of my life. But during the COVID nineteen pandemic, I started getting more candy fish. It's really really good for you. It's ready to eat straight out at the tin it's still 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 an Alson Roman on this podcast, seeing folks like Alson Roman, Anthony Boor Dane and David Chang, like they had all been espousing how incredible, especially you know, really high quality entry. It was overally high quality Cantuna. It was definitely in the ether, and I was starting to see in my own pure group, you know, people posting pictures of like little meals they were creating at home with tinfish, which is fascinating because I really feel like before COVID that was not an habitual thing for people to do, like make a beautiful lunch and post about it on Instagram. So weird. And obviously now it's completely eb equitiz So all of those factors combined added with the bump. I think the canfish category saw like a ten percent year ear increase during the COVID nineteen pandemic, which is crazy. It has not been like that since broadly, and I was like America to deserve a better product than I think they'll be willing to pay for it. So that was that was really the origin of the company. 00:08:03 Speaker 3: So there's sort of like two different strains that 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 bait the overall statement. 00:08:29 Speaker 4: 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 can seafood supply chain is completely different and very strange. So the first I'll give an example of is our cantabrin antrobies. So we source our anthrothies from a tiny town in northern Spain called Santonia. And if you go to this town, Santonia, you will be blown away because it is completely occupied by anchoby canneries. Like that is the town. You walk through this tiny city and it's like every anchoke, candy, anchoby 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 persine method of fishing, which is it basically is like a big bag wide net that's cast out into the top sort of the top of the ocean. It encircles the 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 anchovy. 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, the there's usually one or two folks from each canary. And keep in mind these canaries are by and large, maybe all multi generational, family owned. So the canary that we work with was started in the nineteen forties by a man who now has had three generation 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 anchoby auction and you will, you know, have a price in mind to bid on these anchobies, and he'll go by a bunch of anchoviies and those anthobies will be taken mirror 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. 00:10:55 Speaker 3: That's great, that's great. 00:10:56 Speaker 4: So that means that the anchobies 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 twelve to thirty six 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 really expensive product and a pretty limited market. Our anchovies are on average held in there from twelve to eighteen months, and during that time, you know, they 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 twelve to eighteen month period, they're removed from that bucket of rock salt and they are their skin is removed and basically, like the beautiful little pink anchovy that we all know and love emerges from what other miise 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 like substantial long silver fish. They are 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 fish anchovy product. They're cleaned extensively, They're rinsed and washed, and then they are those cancer are filled with extra original olive oil in our case, and they're seamed, and then anchovies are very unique because, unlike the rest of our tinfish 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 tin. So the rest of our tins have an average OA 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, they're very very few products with that sholve life. Anchobies only have about a year long self life because that's all care and method and they can't be exposed to keep because they'll disintegrate. So that's like the simplest supply chain. And how concentrated is that being said? Anchobies as an actual product or by far far and aware, our most complex to store and manage and ship. 00:13:27 Speaker 2: So you didn't have any prior fish experience before you started this company, right, I. 00:13:33 Speaker 4: Did not know. I had been in the working world for about four years in the entertainment industry before starting the business. 00:13:40 Speaker 2: So listening to 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? 00:14:02 Speaker 4: That's sort of the interesting crux of this story is in CpG, and you know, in emerging brands CpG, it's very well known that quote unquote getting line time or getting a coman 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 commands don't want to deal with. They would much rather work with much much bigger companies that they can rely on to produce massive batchels or 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 manufacturer suppliers, et cetera 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, Gus. Honestly, it doesn't capture the European romantic esthetic. So that was definitely at play. It wasn't like trying to think of another industry. I don't know, 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 off like a shot. It was 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 I coul get in touch with, and then very quickly start reaching out to manufacturers in Spain Portual. There is this you know, America, it's 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 canaries, 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 we have a capacity like these these canories that 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 canaries 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 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 a that we think about business in the US is just so different from how these businesses are are you know, conceiving of their own Like if they have five percent year over year growth, it's amazing flat, it's fine in some cases. I don't want to generalize, but like they're certainly not trying to grow too much or fifty percent yearly 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, they maybe have been fine with five percent year over year growth and seeing Fishwife's you know, volume requests triple, quadruple year over year, it's like hard for them to wrap their heads around. 00:18:01 Speaker 3: 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, for just from a business wise perspective, solved that. It's still have a cold start problem. You have like no customers on day one, et cetera. You have to like get some capacity. You don't really know what en demand is going to look like. I guess you, 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. 00:18:51 Speaker 4: Yeah, it's a great question. So our zero to one year was twenty twenty one, 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 and open to build a supply chain both in North America and in Europe. So in the first year of the business, I started working with. The first canary 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 mqu's here. This is people coming in bringing their catch and saying, hey, make me you know, five hundred cans of tuna. So that was the first canary. Then we started working with one in Washington State which was very similar profile micro cannery superhands on, no MQ and to be honest, stand for minimum order quantity. 00:19:48 Speaker 3: Oh great, thank you. 00:19:50 Speaker 4: So 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 fifty thousand units of your sparkling water grand 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 an MQ issue. We certainly didn't have it in the domestic canaries because they are so so small. And then when we started working with our first canary in Spain, which we still work with today. We still work with the cannery in Washington State that MQ is still on this smaller side. I think it was maybe twenty thousand units, I think so. I think I ordered twenty thousand units of our startings with Preserve Love 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 am at in the entire company. 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 stop starts, et cetera. 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 bread. Even though the supply chain has since transformed significantly. 00:21:20 Speaker 2: Well, that was gonna be my my next question. So as your business has scaled up, and you know from the numbers you were suggesting earlier, it sounds like it's grown very very quickly. Has securing product become easier for you? 00:21:34 Speaker 4: It's become easier and harder. Hece become easier because now you know, we have eighteen employees at the company and it's they're a lot better it's hearing product than I was by myself. So that part of internal resourcing has become a lot easier. And then you know, we did this big supply chain transformation in twenty twenty three. We were really looking to go from that supply chain V one that I described to to supply chain V two that you know, the goal was the supply chain V two could see us through essentially unlimited scale in the American market. So we were looking for canaries that could produce eighty million cans a year one hundred million cans a year. So that was a transformation we went through, and by and large, we have been able to scale enormously and very very quickly. You know, in the in the grand scheme of things that being said, like I think the startine situation is a really good example. We have seen our demand for that product go. Those are really essentially exponentially and that unpredictable demand that we are sometimes faced with, which we can go into in a minute. What if we want to take into the starting situation that is when we're presented with just challenges because those things can happened so quickly, and this is not a super fast lead time supply chain, Like we're trying to tell our cannonies what we need a year ahead and six months ahead and three months ahead placing the po so they can really secure the raw material that we need to produce the product that we need. So I think that's that's the tricky part of being a high growth brand in a long lead industry. Yeah, you just never know what the growth is going to look like in a year. 00:23:27 Speaker 3: Well, I'm glad you we got to the sardine part because there was one thing that I wanted I meant to say in the intro. One other thing that piqued my interest in this whole story is that on Instagram, so I have a really messed up Instagram feed and algorithm. On Instagram, I get served a lot of b to b ads for Chinese sardine manufacturing facilities, who on the ad itself say, are you dealing with the Moroccan sardine shortage? Source your can sardines from China, et cetera. Which I thought it was like really fascinating to me talk about. So you're like getting to like, okay, you eighty one hundred million units. You know, up until again five years ago, this was not a high growth category. Ie. For years and years you have the emergence of these very inexpensive canaries in China, but also I believe Vietnam and Thailand and elsewhere. Prior to companies like you entering the market, was there sort of this 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 US that was shrinking due to this sort of global de industrialization 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 they're you know, that's constricted, that it's constrained because of the sort of years of like hollowing out from global competition. 00:25:00 Speaker 4: Yeah, I mean, I think it's the same stories as like all American manufacturing stories, there were ones booming canaries on either coast of the US and California probably read Canary Row or in on the coast of Maine. There were these bigger, more industrial canaries and a combination of factors contributed to those shutting down. Basically like most canories in the US shutdown like fifteen years ago. Today there are this is an estimate, but I would say like five ish in the lower forty eight and then probably several more in Alaska. Alaska is where you'd find some of the bigger, more industrial canaries that are doing like Commodity Alaska and kan Salmon, et cetera. But yeah, I think do a combination of factors. I know that there were really stringent FDA rules were put in place about fifteen years ago that a lot of the canaries in the US couldn't upkeep, couldn't manage. Some of the fisheries really declined, so the Pacific sardine and anchovy fisheries 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 canaries followed because obviously and then having this very cheap processing available in various parts of Asia, so much of the processing moved over there, like you were saying, with the Alaskan processing that you see in China. So it's a it's a common story and it definitely is is what happened in the US. 00:26:34 Speaker 2: Sorry, just to be clear. The Moroccan sardine situation, it's not that you can't can sardines and Morocco. It's that's where the sardines themselves are caught and then exported to the canning places in It seems mostly Spain and maybe Portugal, is that right? 00:26:54 Speaker 4: That is that is correct there? There are certainly canaries and cannery infrastructure in Moroccan go, but so much of the of the raw material from the Moroccan sardine fishery was being exported to Spain. I think it was like ninety percent of the raw material in Spanish canneries of sardines was coming from Morocco. So no, they have the canning infrastructure, and I think what we're seeing here is that they are preserving the raw material for their own exports because the ban is just on frozen sardine exports, not canned sardine exports. So Morocco is protecting his raw material and is able to maintain its industry. It's very meaningful, large industry of exporting cancardines. 00:27:45 Speaker 2: So has that affected fish Wife personally, I guess. 00:27:49 Speaker 4: It has, but not in the ways you would necessarily suspect because we have never sourced from the Moroccan sardine fishery. We have been sourcing from the Corner sardine fishery for about five years. That at the time that we started, Cornish, so Cornish England, it was the only MSc Marine Stewardship Council certified sustainable fishery in Europe at the time. Then MSCs is the most globally recognized certifying body for wild fisheries and it's the one that Fishwife goes by. So we were sourcing from this Cornish sardine fishery, and then the Iberian sardine fishery was actually MSc certified I believe last year, and so we started sourcing from that fishery as well. Just really exciting. So we're sourcing from these two MSc certified fisheries. Now the only certified sustainable fish sardin fisheries in Europe, so we weren't affected in terms of our raw material supply being impacted. That being said, with you know, so much inventory disappearing from the market. We saw our sardine sales starting and I would say December of last year like start to go coohoo bananas. I think it was kind of first two to three x the velocities that we had been seeing before, and it has sustained and gone even up to you know, four or five x, which is massive. So you know, getting calls from buyers that our retailers saying, hey, like my sardine shelf was completely wiped out, can you step up and step in and supplies with sardines? And you know, I remember having this conversation with my with my head of sales. It was like, we can do it. We're gonna have to air freight the product in order to get it there in time. You know, we usually try to send things by quote unquote slow ship, which is the most economical also the most environmentally sustainable, And you know, we had to make the hard decision of like okay, are we okay with our gross margin being compressed by these airship mens. As you can imagine, they are extremely expensive. In order to capture the demand maybe introduce new customers to fishwife sardines. We did make that choice many many times over for many retailers, and it's just been so much demand for the sardines that we just haven't seen go down. I think the crazy thing is we also saw this huge trend around sardines also kicking up at the same pot. 00:30:22 Speaker 2: So I was going to say, in the course of my due diligence for this podcast, I went on the can sardines subreddit, very active subreddit, and there were a few people complaining about they couldn't find sardines, that they're like local Trader Joe's or anything like that. And there were a bunch of posts also extolling the health benefits of sardines and making me think that maybe I need to try them. 00:30:45 Speaker 3: No, I think just from a health perspective, canned fish is just like a great way to get so protein. I put it in salads. I'll like put can tuna in a salad or something like that. I'm a big I'm a big I'm a big advocate. First of all, I find it interesting that actually people evidently are they want already and so bad they're willing to like trade up, so like some like market goes away and then they'll like go to the premium. But I want to talk a little bit more about like, you know, when I think of the DTC brands that truly like grew up in the age of like the golden age of Instagram, like the twenty tens, you know, it seemed like the big opportunity was find a product that's very expensive. Let's say like a Warby Parker. You know, you don't really need to pay three hundred and fifty dollars for a pair of Luxodica glasses. We could build this for twenty dollars. We'll spend ten dollars on advertising, and then we'll sell the product for one hundred dollars. I'll just make up these numbers and then we make seventy dollars in profit. And it feels like there are just tons of companies and they came out of business school and stuff like that, and they all identified all of these opportunities to find something that was premium and then like make a commodified version, cut out the middleman, do some good brand, and make it a little glossy, put it on Instagram, et cetera. It feel like this is the kind of the exact opposite where you have to invent a new category that doesn't really exist. Is this in part just like a function of like the changing I'm interested like the media marketplace, such as that playbook, Like now, if you started the warby Parker, rather than paying twenty dollars for the Instagram ad, you'd pay seventy nine and left with a dollar margin or something like that, and that you actually have to like do something totally different in order to build a DTC brand in the twenty twenties. 00:32:31 Speaker 4: Yeah, I mean, to be clear, d t C makes up about twenty percent of our business, so it is it is our minority channel for us, right, even though it is incredibly incredibly important for fishwafe. But it's certainly not the business that we're like building our economics around. You know, food businesses you're gonna build in retail, like that is where the volume is. That being said, I think, I mean doesn't totally answer your question, but like people want really quality products and people are willing to pay for them. I think that's what we've seen. I think it's some crazy stat like fifty percent of the spending right now is being done by like, I don't know, like five percent of our populations something crazy like that. People are just willing to pay for a much higher quality product. First of all, I think a lot of us were honestly burned with some of those d TWOC brands where they're touting themselves as a lower cost but equally high quality version as the like sort of traditional like whatever, Lake Crusay, whatever, you know, and maybe that didn't turn out to be the case for a lot of them. I know, I bought a bedframe from one of these companies, and by god, I was worse eight hundred dollars I respect. 00:33:43 Speaker 3: Can I just make a plug for a brand? Though, I just like they did something good and so I just feel like, like ten or eleven years ago, we bought an away suitcase and it like started breaking down recently and the zipper broke. They replaced it for free, and so like, even I it was years old, so it's like a pretty like I think it was probably a marginally less quality product than whatever the incumbent suitcase company was at the time, but they but I was pretty surprised they actually replaced a broken suitcase. 00:34:11 Speaker 4: I'm right there with you. I've fown three away suitcases and they're amazing. There's exceptions to the rule every time, and I think with fish Wife, it's like, no, we're selling a super equality product made by multi generational European family owned caneries. Like it just is as good as it should be and needs to be, and we're not like doing any high falutin new age stuff. I'm attracted to that. I think other people are attracted to that, just knowing like this truly is the just the highest quality product. We're not. We're not cutting corners here to make a cheaper, cheaper product. 00:35:01 Speaker 2: Joe, you should make a way pay for their advertising. 00:35:04 Speaker 3: So it was such a free giveaway, but all right it. 00:35:07 Speaker 2: Did happen oway okay, away from personal brand preferences and just going back to the sardines for a second. So there are a bunch of different like themes that I are keywords that I hear here. So one is more demand for sardines. Sardines are having a moment. The other one is climate change, and we talked about the shortage of plankton due to potentially warmer waters. We've also been hearing about overfishing for ages and ages and ages, and you often see these competing headlines where you know, people say the world's fish population is in danger, and then two months later it's like, oh no, we figured out more sustainable ways of fishing and this demand or the supply is resilient and all of that. When you look at the sardines shortage, which of those factors matters the most to you in you know, the current moment. 00:35:55 Speaker 4: I think as a headline, the frustrating thing about seafood sustainability is that it is endlessly nuanced and it's changing constantly. So even with the sardine, the Moroccan sardine situation, they started to see a decline in the catch in twenty twenty three, it was about it was down about forty six percent. That's only three years ago. Like fisheries, science moves somewhat slowly. Doing assessments of fisheries takes a really long time. So TLDR, everything that's being talked about, all of the theories that you mentioned, Tracy, are just that their theories, and they're also like contributing factors to you know, a much bigger picture that probably all of them are contributing, not a single one, and it's hard to tell to what degree you's just contributing. So I'll like speak to these these theories that are that are currently in the conversation. Sure, so the first that seems most likely is climate change generally, so there are warming waters in the mid Atlantic that forage fish like sardines, like anchovies, like mackerel are very very sensitive to water changes, so when the water temperature changes, they are likely to migrate to colder waters. So it might not even be that there are less sardines. It might simply be that the sardines have migrated somewhere that the commercial fishermen have a lot of difficulty accessing. It could be deeper in the water, it could be further in the water. They're just they're in a new location and it's not where where the fishermen are used to catching, So that seems to be the most likely theory. Warmer waters can also trigger like unexpected changes in the food web. Obviously, everything in the ocean is connected, and when you know water temperature changes, it can mean also they are more predators that are actively catching fishing fishing in the area. So, like you said, and trazy. Humans are not the only ones that are catching sardines, so are dona and other fish, so there might just be more active predators in the area. There's also the plankton theory, which I think a lot of people are writing about, which is that the warmer water has triggered maybe less or less nutrient dense, fatty caloric hate. 00:38:24 Speaker 5: A skinny plankton, I absolutely hate when you get served on those, but those can lead to you know, leaner, less fatty sardines, which are the ones that folks who are looking to catch. 00:38:38 Speaker 4: So they are all these factors in combination definitely all tied up in climate change. Hard to know which is contributing the most. I think one thing, it's interesting this circumstances. From what I can tell, like overfishing is not not the main culprit. So I mentioned MSc earlier. That is, you know, the certifying body that we most lean on and look to, the Monterey Bay Aquarium Seafood Watch at a mouthful. They're also a very globally respected certifying body and they're the ones that have given I think this fishery currently has a yellow rating, which is not bad, but basically in their assessment is that the fishery is being well regulated, strong enforcement is in place, which leads me to believe that it's less of an overfishing and more of a of a climate climate issue. I think one thing that's really really important to highlight is that when you see, you know, this is not a fishery shutdown situation, This is a like you know, frozen starting an export ban situation. But when you do see, you know, a market being capped on a fishery, it seems a little bit scary, but that's actual responsible fisheries management in practic That means that you know, everyone's coming together and saying, hey, we're not seeing the amount of fish that we expected to see, or not seeing the size of fish that we expected to find. We need to shut down the fishing season and allow the fishery to repopulate itself. And I think the amazing thing is there's so so many examples of their being you know, decline and catch fisheries shutting down for between like three to five years, and in the span of that time fully becoming certified sustainable again aka able to fully repopulate and sustain themselves year over year. So I think that's really important for people to understand is like, don't freak out when you see when you see those empty shelves, like be happy that, like people are putting these restrictions into place. 00:40:54 Speaker 3: Do you get inbound business inquiries from companies that are probably marginally or somewhat below your standards like caneries in China, et cetera. Or there's like, look, you can say you might like your inbox flooded with different B to B suppliers at different parts of the supply chain offering yourself. 00:41:13 Speaker 4: Definitely, I would say, you know, my more like my LinkedIn with that, I feel like somehow they're still not getting my email by and large, or maybe they're going straight to my spam. But yes, I don't spend that much time looking at them, if I'm being honest. 00:41:28 Speaker 2: What's happened to your own sardine pricing in this environment? Because as I understand it, you know, you have this premium product which already is at a higher price point than some other equivalents. Does it go up further if people are, you know, struggling to find tin cans on the shelves of Trader Joe's or something like that. 00:41:48 Speaker 4: I do think that we expect our sardine prices to go up. It's like an active conversation. Again, all this is happening so quickly, But I think we can only assume that we will see and we will see prices go up as the two fisheries that we're sourcing from become more and more competitive. 00:42:08 Speaker 2: Then the other thing I want to ask again, as a non fish lover, we'll fish consumers. Do they trade to other types of fish if they can't get sardines? 00:42:19 Speaker 4: Yes, they too. I don't know if I have really good data to share on it, but we are definitely seeing folks come in in retail online starting with one species and then over time expanding to the rest of ours. It's a really good question. I would say, like, maybe not anthroviies, because antrothies generally aren't looked at as like the protein replacement in your meal. But between sardines, mackerel, tuna, salmon, troali, we're definitely seeing trading between species. 00:42:48 Speaker 3: So obviously, like to maintain a sort of valuable brand, you have to maintain the brand itself. Here is a question I've always wanted to ask someone this. We live in this age of brand collabs, right, it'll be like, oh, like Lululemon is dropping a new limited edition with like Kraft heinds macaroni and cheese, like you know, yoga gear like limited Yeah, yeah, so like I know you'd like done some you know, with like the Olive Oil Company, et cetera. Are brand collabs really brand collabs? Like Okay, we're gonna send three employees of yours and three and we're going to figure something out. Or is it like someone comes up with an idea and someone else writes to check and then they like co brand a post on Instagram. 00:43:30 Speaker 4: Oh my gosh, they're so the former, I've never done anything like what you're describing With the second, I'm like, to my detriment, these collabs are like so so so in depth and you spend so many months on them. Yeah, we're about to have two huge collabs come out. One is coming out tomorrow with Whole Foods. We're doing a collaborative series of Toads, which they've never done with any brand before. There were no dollars exchanged. We've been working on it for you know, six months, and we're about to have I can share another one. It comes out after August eleventh, like these colloubs are so not pay to play in any way at all. Like our flyby Jing product collab, which is a very popular one. It's just you know, we buy their sauce at a wholesale price, we put it in our products, and like that's it. It's just super clean, classic ingredient purchasing. 00:44:24 Speaker 3: The other brand related question I have rather than take DTC to describe the broad of things like DiNovo brands right coming out of nowhere, et cetera. So you know, over the years, I think the ones that grew up in the twenty tens like paid an increasing like Instagram tax right to maintain that brand. I notice on your website you actually have a thing where influencers can email. They're like, oh, like I will post about fish wife and then you like arrange some deal with them. Is there are so many influencers out there, and there's so many want to be influencers. Do you feel that from your perspective you have good options or are the influencers that you actually want to work with because they're aligned with your esthetic and brand? Do they grow and grow their capacity to like, is there real scarcity of the types of influencers that you would actually want to work with rev than just ones that have a high follower count. 00:45:19 Speaker 4: I al feel there's scarcity at all. I think Fishwife has a unique relationship with the influencer landscape because we really don't do any pay to play. Like every once in a while will have an influencer make some content, and obviously we're going to compensate them for their content and then add a bump bump on top for their audience if it's like a collaborative post. But like we really have done it less than ten times in our life, so I think, you know, we're lucky. Do you do have brand? 00:45:50 Speaker 3: Like you have this affiliate program thing on your website and it says get paid when you share about Fishwife. 00:45:55 Speaker 4: That's the you know, commission based program different than a flat field I think basically to pay influencers flat fees to post on their Instagram, there can be truly like astronomical rates. I've been quoted, you know, forty thousand dollars, thirty thousand dollars for someone with let's say, like eight hundred thousand followers, Like we simply can't afford that, So you know, we have this AFFLID program influencers are in commission something that we have always invested in seating making sure that we're getting product in their hands. But yeah, there is kind of like a huge le between a commission based program and like paying a flat fee, which a lot of them are very very high. 00:46:39 Speaker 2: Just going back to the supply chain for a second, So packaging is obviously very important to Phish wife. You've got the branding aspect, but you also have the tins themselves. Everything's coming in a tin. Have you been impacted at all in recent months by you know, tariffs on things like aluminum packaging and stuff like that. 00:47:00 Speaker 4: The tariffs on aluminum packaging, we haven't seen like directly impact our business. First of all, we're not taking ownership of those our canaries by I see the tins, and we haven't seen like a meaningful increase. We've seen it in the course of our five five years of being business that ten prices have gone up were aluminum prices have gone up. But as of late, especially D's the tariffs, that has not been the biggest hit. Like we have had tariffs applied to the products that we're importing from Europe, those have an impact on the business and are not ideal. Europe has a fifteen percent tariff right now that was put in place in April twenty twenty five, and it sucks. It's like millions and millions of dollars. We got refunded a million and a half dollars last month, which was great, I showed up in the bank account. 00:47:53 Speaker 2: But now you'll have new tariffs. 00:47:55 Speaker 4: We now have new tariffs, and that one million and a half is not even yeah, it's it's a percentage of what we have paid in tariffs. We've always dealt with tariffs, like there has been a thirty five percent import duty on to an impact in all of oil since we started importing that product, and the tariffs don't stack so like for example, our tune and all oil when the tariff curtain fell, like we didn't increase in we didn't experience incremental tariffs. But no, it sucks. It definitely, like it hits scars margin and it just feels really stupid. So I wish that we didn't have to pay those millions. 00:48:33 Speaker 2: I got a terror free fund recently, which I didn't really understand because I thought only businesses were receiving this. But I got it for like seven dollars and fourteen cents. 00:48:42 Speaker 4: Congratulations, Yeah, thanks, thanks. 00:48:44 Speaker 3: You create a new category that's very pre at least in the US. Right, you create this new category of like premium tinted fish, and then others and I think you sort of alluded to this, then others discover it. You might get other startups or I could imagine, but I actually didn't do any research on this particular question. I could imagine that what you might get, and I think you see this is you have some existing company that is known for their commodity version, and then they'll come up with their equivalent of like the Starbucks Reserve, and they'll make a label that's probably like kind of a knockoff of a you know, a fishwife label or something similar, or other company will expand we'll do a tin fish line. They'll see the opportunity that you have found. And I'm curious, like you mentioned that there was a fair degree of slack in some of these cannary canaries in say twenty twenty one, where they're not doing three shifts a day, seven days a week. Do you see your demand decide more scarcity at the cannery level from companies essentially one way or another trying to get a share of your market. 00:49:47 Speaker 4: I would see where we're seeing scarcity, it's mostly because of the volume from Fishwife. Oh interesting, not a brag, but growing so much so quickly. That's what we're seeing, you know, sort of constraints, is that we're taking up so much more canning line than we thought we would be and they thought we would be in the span of two years. Yeah, I think it's we are lucky to have established like a couple modes. I think people are willing to pay for fish Rife because it is a really, really high quality product and because we have been able to tell the story of why it is a high quality product. Over the past five and a half years. We built the brand online, which you know hadn't never happened in the in the canfish category before. So it's a big leap to pay what you have to pay for a fish Rife product and to earn that pricing power. I think it's very challenging, to be quite honest, and takes a ton of brand building work, Like yes, the product has to taste truly amazing to get people to buy it and come back and come back and come back, but that brand building work is very difficult to replicate. And then I think, as you're seeing here like you have to be extremely agile on your feet in terms of supply chain, like it is not. No business is easy to round, No global supply chain is easy to run, and definitely seafood is not. So you know, we've seen new entrants come into the category, but honestly, in terms of like categories that clearly have heat, I would say ours has had less meaningful new entrance than many. 00:51:24 Speaker 2: Sorry, one more sourcing question, and again as a non fish person, I don't really get a lot of these distinctions. But I'm looking at some of your smoke salmon, smoke salmon with fly by Jing Chili crisp. It sounds it sounds good. It says that the salmon comes from it's farm salmon, not wild caught. 00:51:45 Speaker 4: How do you make the. 00:51:46 Speaker 2: Decision between wild caught and farmed and what are the distinctions? I never really understood this. 00:51:52 Speaker 4: I would say it started as a little bit of a happened stance of trying to figure out supply chain, and I really really struggle to stand up a wild Alaskan salmon supply chain. I justly could not get in touch with the canaries. I would get in touch with one like one supply or one other supplier, and they were sourcing different species of salmon and they didn't want to didn't want them to mix, Like I could not figure out how to scale it. Farm salmon makes up between seventy to eighty percent of the salmon that were eating globally. Like, if you're eating salmon, odds are you're eating farm salmon. It is a much much more manageable supply chain for so there's so much of it, and it freezes really well, it travels really really well, and you are not having to deal with seasonal purchasing, which, as you can imagine, you know, can necessitate the outlay of an enormous amounts of cash. With farms, they are producing throughout the year, harvest harvesting throughout the year. So it's a much is a much less lumpy cash outlay, which makes it just so much easier supply chain to navigate. There are fluctuations in pricing for farms and for sure, but slightly less allatile than wild. 00:53:06 Speaker 2: I think we're going to leave it there, but thank you so much for answering all of our fish related questions. Becca really appreciate it. 00:53:13 Speaker 4: Really a pleasure to really really get into it. I appreciate the opportunity. 00:53:31 Speaker 2: So there's a lot to pick out from that conversation. I mean, I hadn't Again, I don't think about salmon that often, but I hadn't realized that, Yeah, if you're if you're doing wild caught salmon and you can only buy at certain times of the year, then you are going to lay out like a huge amount of money because everyone's trying to do the same thing at the same time. 00:53:48 Speaker 3: No, it totally makes sense that it would be as the tech exists to farm salmon, that that would be a lot more appealing and you get all kinds of stability and stuff like that. I really enjoyed that conversation. There's so many like interesting strands there. I think it's interesting that like it's you know, so you see a headline like the catch in Morocco is down significantly, and you're like, and how that like we might not actually fully have the answers that, like people are trying to piece together or maybe it's something to do with the plankton. Maybe it's something to do with overfishing. Maybe it's something to do with water temperature, et cetera that we don't really know. 00:54:26 Speaker 5: Well. 00:54:26 Speaker 2: I also find the connection there really interesting because like, Okay, something might be happening in the waters off Morocco. Maybe they're warming up, maybe the plankton aren't as fat or as bountiful as they used to be. But suddenly that becomes not just Morocco's problem, but another country's problem in the form of Spain. So it seems like the Moroccan sardine export ban is now becoming a diplomatic issue with the Spanish because now there are attempts to get to for Spain to take Morocco to the negotiating table and actually get them to like call off the export ban. 00:54:58 Speaker 3: Yeah, it's wild. And the fact that like there is actually quite a big market for trading ups. I mean, I guess like if you need sardine, you need sardine, and another fish isn't going to work. And so the idea that like, okay, now there is suddenly you know, even if it's like a very different supply chain at first, that the impairment of the sort of commodity supply chain will invariably affect the premium supply chain. 00:55:22 Speaker 2: I honestly think the trading up phenomenon when it comes to food inflation is a real thing. So you know, people are thinking, well, if I'm going to have to pay twenty dollars for a pack of ground beef, I might as well spend thirty dollars and get some steaks or something like that. In fact, I had that conversation with a woman in a supermarket the other day. Also, can I just say, I know, I just put the whole episode talking about how I don't like fish. Yes, but I was at a dinner party last weekend and a former teak wood supplier who we should get on the podcast. He's now an organic farmer. He made candied salmon. Oh yeah, this and it was so good I ever had it before and it was actually delicious and I ate the whole thing. 00:56:02 Speaker 3: No, that is that's really tasty. So that's a good entree too, Like maybe more exploration on your part. Well, word, there's all kinds of fish that theoretically you might like. 00:56:12 Speaker 2: I like a lot of stuff. I like sea urchin, I love raw sea urchin, I love oysters. I love a lot of that stuff. But I don't know just like cooked fish. I get I get it anyway? Should we leave it there? 00:56:22 Speaker 3: Let's see it there? 00:56:22 Speaker 2: This has been another episode of the Authoughts podcast. I'm Tracy Alloway. You can follow me at Tracy Alloway. 00:56:28 Speaker 3: And I'm Joe Wisenthal. You can follow me at The Stalwart. Follow Becca Milstein on Instagram at bb Milstein. Follow our producers Kerman Rodriguez at Kerman Arman, dash El Bennett at Dashbot, Kilbrooks at Kelbrooks and Kevin Lozano at Kevin Lloyd Lozano. 00:56:43 Speaker 2: And for more Odd Lots content, you should check out our daily newsletter. You can find that at Bloomberg dot com forward slash autos and. 00:56:49 Speaker 3: You can chat about all of these topics twenty four to seven in our discord Discord dot gg slash odd Lots. 00:56:55 Speaker 2: And if you enjoy Odd Lots, if you want to see us do more food episodes or even more Sea food episodes, then please leave us a positive review on your favorite podcast platform. And remember, if you are a Bloomberg subscriber, you can listen to all of our episodes absolutely ad free. All you need to do is find the Bloomberg channel on Apple Podcasts and follow the instructions there. Thanks for listening.