Local Ocean Launches “100% Fish” Program

By Brian Bahouth

The fish skin dog treats you see in a central Oregon coast gift shop may be from a fish you ate a few months ago at Local Ocean Seafoods in Newport, Oregon. 

Among the dozens of restaurants in Newport that process and serve fish, Local Ocean is an outlier in many ways. Founded in 2002 and situated across the street from the largest commercial fishing fleet in Oregon, Local Ocean Seafoods exists not only to make money—they also operate the restaurant and seafood market under the terms of a stewardship trust. 

The trust establishes Local Ocean as an employee-owned cooperative and also creates a perpetual imperative to help build a more circular, regional, “blue” food economy. The restaurant vows that it will “forever continue to source direct from local fishers and showcase our local species,” reads their website.

Darlene Khalafi, the 100% Fish Program Business Innovation Specialist for Local Ocean, has an office in the Central Coast Food Web (CCFW) facility, just east of Newport on the Yaquina Bay.

“Each year, we buy over 100,000 pounds of whole fish from family fishers, and we process them in our restaurant through our filet operations,” Khalafi told me as we sat in the CCFW kitchen.

“Depending on the species, a filet might be 30 to 70% of the total weight of a fish that gets enjoyed by our restaurant consumers and our seafood market lovers. However, the rest of the fish, previously, has had no home. 

“So as an alternative to sending all that fish junk to the landfill, we launched the 100% Fish program to value add and upcycle seafood processing waste into consumer goods.”

It would be difficult for a restaurant to successfully upcycle fish processing waste by itself, so the Central Coast Food Web “Lab” is a key element in reclaiming value from fish processing scraps. 

According to the CCFW website, their facility provides “the services and infrastructure needed to overcome limitations in the current food system.” They “provide shared space and equipment at low risk and low cost to seafood and farm businesses to process, package, and store their products.”

The facility offers commercial-scale food processing capabilities. There is a door large enough to accommodate a tall delivery truck or forklift. There are stainless steel tables, deep sinks, freezers, refrigerators, ovens, dehydrators, administrative offices, and cooking and packaging equipment and spaces. 

For Local Ocean and Darlene Khalafi, the goal is to transform fish processing waste into attractive products nicely arrayed in retail locations.

“We are making products for people, plants, and pets,” Khalafi said. “We have some salmon stock, some bone broth; we are working on some sausages, some jerkies. 

“And for pets, we have a fish skin dog treat. We’re developing some fish cookies as well. And then eventually, once we get into the part of the process that is no longer food grade for people or pets, we plan on grinding up the rest into fish meal and potentially make some fertilizers for household plant applications.”

The notion of upcycling seafood processing waste is an emerging and evolving business model that falls under the rubric of the Oregon Ocean Cluster. The concept of an Ocean Cluster began in 2011 when a group of blue (that is, ocean-related) industry organizers in Iceland launched the Iceland Ocean Cluster. 

Quotas placed on the number of Atlantic cod that Icelandic fishers were permitted to catch put pressure on the need to maximize the value of every fish. They found that they used a mere 45% of each fish, so they set about upcycling seafood processing waste, and over a decade, they went from using less than half of every fish to 90% utilization—and made money doing it.

There is a long history in Iceland of drying fish for storage and consumption, but the fish heads were traditionally discarded, until enterprising marketers found a demand for dried fish heads in Nigeria. Over time, entrepreneurs in Iceland began harvesting Omega-3-rich oils from cod livers and selling it in capsule form. They expanded into making the supplemental nutrient collagen, harvested from fish skins. They make fish-based cosmetics and fish-skin leather. 

Ten years after the Iceland Ocean Cluster formed, the Oregon Coast Visitors Association founded the Oregon Ocean Cluster with money from the U.S. Department of Agriculture. The Oregon cluster is one of five in the United States and one of twelve established worldwide.

Each cluster sets its own priorities. Supply chain disruptions during the COVID-19 pandemic led Oregon Ocean Cluster researchers to discover that 90% of the seafood consumed in coastal communities is imported, while almost all of the seafood landed in Oregon is consumed elsewhere.  

This knowledge led the Oregon Cluster to focus on making local seafood easier to find and buy locally, as well as on enhancing the vibrancy of local, circular blue economies. In pursuit of the latter goal, the Oregon Ocean Cluster started a “100% Fish” program to help fish processors reclaim fish scraps. Local Ocean is an exemplar of this business model. 

Khalafi said that the catalyst for the Local Ocean 100% Fish initiative was a local grant.

“100% Fish is a movement that has been spreading around the world, and when Local Ocean caught on to this idea, they wanted to be able to promote more seafood upcycling and reduce their carbon impact while also  promoting the overall blue economy. 

“But in order to do this, we needed some funding,” Khalafi continued, “so we got a grant from the Northwest Oregon Works Maritime Development Initiative to hire me to oversee the program. And as of the spring this year, we have gone from zero to having three products on the market, and we are well on our way to developing many more.”

To develop and produce viable products and find markets for them is a multifaceted business development challenge, Khalafi explained. 

“We are in twelve retailers in Lincoln County, and these are anything from boutiques to souvenir shops geared towards tourism. We’re also in places like the Oceana Food Co-op, the Oregon Coast Aquarium, the Maritime Museum [Pacific Heritage Maritime Center], and the [Yaquina Bay] lighthouse. So we’re really broadening the audience here, not only local eaters, but also people who are coming to enjoy the Oregon coast as well.”

The Philomath-based Reclaim Cooperative also works out of the Central Coast Food Web’s facility. They buy ling cod skins from local processors and manually transform the skins into durable leather products using sustainable tanning methods. But other than reselling fish processing scraps for crab bait discs, Khalafi is unaware of any fish scrap upcycling taking place  in and around Newport. She’s hopeful that Local Ocean can lead the way.

“What we aim to do is add value into the price per pound for this product, and hopefully ‘raise all boats’ in terms of the economic opportunity here for a small business. We want to demonstrate that this could be a viable revenue model for us, which is replicable all up and down the Oregon coast.”

The products that can be created from fish trimmings is a matter of creativity and finding, or making, markets. From skin grafts for burn victims to dog treats, blue businesses are beginning to make money from a traditional waste stream. If you are a local fish processor looking to add value to every fish you process, Darlene Khalafi wants to hear from you.