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Kona Blue’s Ocean Aquaculture: Marketing the Myth of Sustainability
Fact Sheet • June 2009 ona Blue Water Farms, LLC is an open ocean aquaculture operation that was founded in 2001 off the coast of Kona on Hawaii’s big island. Since its inception, Kona Blue has promoted itself as an environmental leader. Its Web site refers to farmed fish that are “sustainable from hatch to harvest” and an “environmentally friendly alternative” produced “without depleting wild fish stocks or harming the ocean environment.”1 In 2005, after several years of research and development, the company began producing a sushi-grade Hawaiian yellowtail which the locals call kahala, and is sold nationally as “Kona Kampachi.” It now bills itself as the “first integrated hatchery and fish farm in the country.”2 The farm produces around 25,000 pounds of kahala per week (as of March 2009) at about $17 per filleted pound when purchased directly. The majority of the product is destined for consumption on the American mainland.3
Kona Blue Water Farms has successfully marketed not only the kahala it raises by the thousands in cages off the coast of Hawaii, but also the idea that its version of open ocean aquaculture is environmentally sustainable. This is highly questionable. The company might not have a sustainable business model, either. Kona’s Kampachi are prone to escapement and the cages may be changing the ecology of the area surrounding the fish pens. Furthermore, the feed options that Kona Blue is using should not be considered the most sustainable: They rely partially on depleted forage fish populations and even chicken byproducts. For example, in December 2007, 1,500 kahala escaped out of their Kona pens after a cage door was left open, resulting in a loss of about $10,000 to Kona Blue.4 When farmed fish escape, it is sometimes a concern that they will affect the local ecology of the region by eating other fish, competing for food with native species or even crossbreeding, mixing their genes with local populations. But the company’s owner, Neil Sims, claimed that the fish were easy prey, and that they did not crossbreed with wild fish.5 Even if the escaped fish did not affect the local population in this incident, the cages have been observed to change the local ecology surrounding the farms. In November 2005, the company killed a 16-foot tiger shark that was stalking one of its divers. Sims said dead fish in the bottom of a cage attracted the shark.6 And, though they have not become entangled, spinner dolphins and humpback whales occasionally swim through and around the farm. One humpback whale was seen swimming between the cages.7 This is a concern because it indicates that predator species may be altering their natural patterns to adapt to the presence of the fish farms and the waste and leftover fish feed that filters through these types of open ocean systems. The feed provided to Kona Blue’s kahala is another cause for concern. Many fish farms struggle with the problem
of how to provide enough fish protein to the growing animals, since forage fish (which are used for feed) are becoming depleted due to their overuse.8 Kona Blue has addressed this problem by providing alternative forms of protein to the kahala, which are less expensive than fishmeal. In 2008, their fish ate half fishmeal and fish oils derived from anchovies and hake, and half oils and proteins from canola, soy, flax, corn and wheat.9 In April of the same year, Kona Blue made a change in feed, and reduced the fishmeal and fish oil, by introducing chicken byproducts to the fish feed.10 Feeding chicken byproducts to the kahala is an unnatural means of providing the fish with protein, and doing so likely cost Kona Blue its account with Whole Foods Markets. The natural food retailer recently implemented a policy to not sell farm-raised fish that contain any land animal byproducts, which includes chickens. This policy was meant to cater to customers who eat fish, but not other animals.11 Further complicating the situation, it may be that Kona Blue’s fish are still eating forage fish, due to a roundabout process whereby anchovies (a forage fish) are being fed to poultry that is raised in factory farms.12 Besides all of the aforementioned problems with escapement, changes in the ecology of the area around the fish pens and the problems with fish feed at Kona Blue Water Farms, there is some cause for concern that their business model might be unsustainable, too. Despite receiving millions in funding from venture capital groups including Cornerstone Holdings,13 Kona Blue’s revenues have yet to pan out. According to an April 2008 article in Fortune magazine, Kona’s revenue reached only $4 million in 2007, half of what was anticipated for that year.14 Additionally, the company also has failed to reach its goal of harvesting 850 tons of fish a year. According to a March 2009 article in the West Hawaii Today newspaper, Kona is harvesting 25,000 pounds of kahala per week.15 That is 100,000 pounds per month, or 1.2 million pounds per year, which works out to about 545 tons. According to the Honolulu Star-Bulletin, Kona harvested 500 tons of kahala in 2008 for sales of only $6 million, again falling far short of the $9 million its representatives had publicly projected in 2006.16 Because of these problems with profitability, Kona Blue Water Farms has applied for a series of changes in its Hawaii facility, that would replace its eight submerged pens with two larger surface pens in an effort to improve its efficiency, and thereby its profitability.17,18 The company alleges that without the proposed changes, the operation would be forced to halt production because it is economically unsustainable: “If no action is taken and Kona Blue remains obligated to use the existing Sea Station net pens then the company will be compelled to halt production in Hawaii. The investors in Kona Blue cannot continue to put money into an operation that is not profitable, and that offers no potential for future profitability.”19 Local Hawaiian groups have already begun to oppose Kona Blue’s expansion effort, claiming that the expansion plan lacks a proper environmental monitoring, report-
ing and enforcement program, and also the that there are problems with fish feed and wastes, altered behavior of underwater species nearby and fish escapement, as reviewed above.20,21 With profits down and its Hawaiian future uncertain, Kona wants to start farming kahala in the Sea of Cortez off the coast of Mexico, a move that would require an additional $4 million in capital.22 While shifting operations to Mexico might reduce shipping costs, there is some evidence that the Sea of Cortez might not be the cleanest environment in which to raise kahala.23 That would undercut Kona Blue’s claims of purity. Problems with sustainability — both environmental and economic — have plagued Kona Blue Water Farms for the eight years that it has been in existence. Unfortunately, there is little to suggest that it is environmentally stable or moving in the right direction financially.
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Kona Blue Water Farms. Available at www.kona-blue.com Kona Blue Water Farms. Available at www.kona-blue.com/ aboutus.php Miller, Erin. “Kona Blue seeks to change cages or halt operations.” West Hawaii Today, March 11, 2009, and Kona Blue Water Farms, available at http://www.kona-blue.com/order.php “2.6 million raised for possible move.” The Honolulu Advertiser, Jan. 18, 2008. Sims, Neil Anthony. Kona Blue Water Farms, Personal communication, March 2006. Lucas, Carolyn. “Fish farm seeks second location.” West Hawaii Today, May 6, 2006. Sims, Neil Anthony. “An Open Letter to the Kona conservation, kupuna and ocean communities, re: a Proposal for Expansion of our Open Ocean Kona Kampachi Farm.” June 15, 2006. Due to the tremendous growth of aquaculture in recent years, fish farms consume 80 percent of the world’s fish oil and half the fishmeal each year. This puts forage fish populations at jeopardy for overfishing, and potentially disrupting the sensitive ecology of oceanic food chains. Tacon, Albert et al. “Use of Fishery Resources as Feed Inputs to Aquaculture Development: Trends and Policy Implications.” FAO Fisheries Circular No. 1018, Food and Agriculture Organization of the United Nations, Rome, p. V. 2006. O’ Brien, Jeffrey. “The Wonder Fish.” Fortune, April 28, 2008. Ibid. Dipietro, Ben. “Kona Blue loses Whole Foods account.” Hardy, Ronald W. “Worldwide Fish Meal Production Outlook and the Use of Alternative Protein Meals for Aquaculture.” Aquaculture Research Institute, University of Idaho, 2006, at 412. “Kona Blue Water receives venture capital award.” Pacific Business Journal, Jan. 28, 2005. O’Brien, Jeffrey M. “The wonder fish.” Fortune, April 28, 2008. Miller, op. cit. Wu, Nina. “Kona Blue seeks a net change.” Honolulu Star-Bulletin, April 9, 2009. Ibid. Miller, op. cit. Ibid. Stanton, Karin. “Kona fish farm facing expansion opposition.” Associated Press, Jan. 21, 2008. Miller, op. cit. Wu, op. cit. “Efforts under way to help salvage Mexico’s Sea of Cortez.” Associated Press article carried on CNN.com, June 14, 2000.
For more information: web: www.foodandwaterwatch.org email: email@example.com phone: (202) 683-2500 (DC) • (415) 293-9900 (CA) Copyright © June 2009 Food & Water Watch
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