Researchers, entrepreneurs find use for fish byproduct

Posted: Monday, May 03, 2010

For every 6-pound salmon caught this summer in Bristol Bay, only about 2 pounds will make it to a plate.

Those leftover 4 pounds of head, guts, skin and bone are still rich in protein and healthy omega-3 fatty acids, though, giving processors an incentive to extract that value -- especially with the Environmental Protection Agency hammer starting to come down on waste discharges into coastal waters.

Last November, Chilkoot Fish and Caviar Inc. of Haines was hit with a complaint by the EPA that could cost the company the maximum civil penalty of $177,500 for continuously violating its waste discharge permit under the Clean Water Act over a period of four years.

In January 2007, Deep Creek Custom Packaging Inc. of Ninilchik was fined $10,500 by the EPA, also for improperly disposing of fish waste.

Under Clean Water Act regulations, fish processors must grind their waste to a size of a half-inch or less before discharge. Even under proper disposal, however, fish waste can impact the environment by creating "dead zones," essentially sucking out oxygen needed for live fish to thrive.

The crackdown on fish waste discharges is of special concern for small companies that process less than 25 tons per day that cannot afford the multi-million dollar price tags for equipment deployed at large-scale operations that separates, dries and grinds waste into fishmeal for sale as a byproduct to the agriculture and aquaculture industries.

This is where entrepreneurs like Sandro Lane and Leo Pedersen and scientists such as Scott Smiley and Peter Bechtel come in. Lane and Pedersen have found creative ways to simultaneously turn previously discarded fish waste into economically valuable products while aiding small processors.

Maximizing utilization is one of the top priorities for the Fishery Industrial Technology Center in Kodiak.

At the FITC, researchers like Smiley, an associate professor, and Bechtel, who works for the U.S. Department of Agriculture at the University of Alaska Fairbanks, are trying to replicate the success story of pollock byproducts for salmon and other species by working closely with private sector innovators.

About 82 percent of total pollock weight is utilized, thanks to the production of surimi, made from the ground-up muscle of whitefish and used in a plethora of items such as breaded fish sticks and artificial crab legs.

By contrast, only about 35 percent of the salmon weight becomes fillets.

Pedersen, CEO of Dantec Engineering Inc. in Danville, Calif., tested his latest invention in Kodiak in mid-April. For lack of a more creative name, Pedersen calls it the "fish injector" and it works by stripping the meat lost in de-boning from the rib cage and injecting that recovered weight back into the fillets.

Processors sell fillets by an average weight, getting a lower price for underweight fillets. The fish injector can add as much as 15 percent of the weight back to the fillet.

Now past the prototype phase, Kelitek Engineering Inc. of Laguna Hills, Calif., should begin full manufacturing this year. Pedersen said, and the fish injector will pay for itself in less than a year.

"This is very positive for processors," said Smiley. "Even for a small-time operation. It makes them significantly more profitable."

Pedersen and Kelitek have worked together on multiple projects, including a system operating at large fishmeal processors in Dutch Harbor. Fish, like humans, are more than 70 percent water, and separating the solid "cake" for grinding into fishmeal from liquid is a key process.

Fish oils are then separated from the liquid, leaving a leftover product called "stickwater" that is still rich in protein. By harvesting that protein and concentrating it, processors estimate they've increased fishmeal production by 3 tons per day.

Pedersen also received a grant in April from the Marine Fisheries Service to create a modular, containerized drying system to process fish waste that is suited for small operations that can't afford the infrastructure of a building and a large blower, or the associated energy costs.

If the modular drying system can be produced at a central location like Kelitek, Pedersen envisions a cost-effective, affordable option for small processors to handle fish waste and cut their discharges.

"It would be possible to dry a number of things, heads, guts, in case they have overflow of fish and can't process them all," Pedersen said. "It's partly driven by value, which has increased over the last few years. Aquaculture needs fishmeal so the prices went up. But the major driving factor has been environmental."

Study after study has proven the health benefits of omega-3 fatty acids, also known as the "good" kind of fat or polyunsaturated. They have also found the diets of the Western Hemisphere, particularly Americans, to be woefully deficient in omega-3 intake.

Some studies have even found that an accurate predictor of heart attacks is the ratio of omega-3 fatty acids in the body.

Smiley and Bechtel recently co-authored a study with colleagues from the University of Illinois proving seafood is the most digestible protein source, beating out poultry and beef. Research by FITC and others has also shown seafood is rich in omega-3.

Fish oil has mostly been used as a replacement for diesel fuel to power boilers, but Alaska Protein Recovery founder Sandro Lane has created a one-of-a-kind operation to process the oil for human consumption and sell it in capsule form as a health supplement.

In business since 2002, Lane is moving toward a sustainable economic model as he's now reached thousands of retail shelves through Costco, Sam's Club, GNC and others with fish oil from his floating processor the A/V Venturer. The Venturer was purchased from the bankruptcy of a caviar company in 2002 by Lane's original partners.

Lane, who is a native of Italy and grew up around the olive oil industry, "failed miserably" at turning a profit in his first three years trying to extract the proteins for sale as a nutrition supplement from the oil.

The fats inhibited the protein extraction, especially once he started getting only heads and guts from processors instead of whole carcasses.

With a background in biology and fish genetics, Lane analyzed the oil that was being extracted and found it was well below the contaminant thresholds for human consumption and was high in omega-3.

He applied for FDA approval in 2006 and after receiving permits in 2007 began seeking markets, freely admitting he'd be out of business without the switch to selling fish oil as a nutrition supplement. He still extracts the protein from the stickwater, leaving only distilled water.

Moved around by tugboat, the Venturer mostly operates around Ketchikan. In 2008, Trident Seafood became a bona fide partner in the company and a supplier of fish waste. Alaska Protein Recovery also has a shore-based processing operation as a joint venture with Trident.

"We're taking a lot of the waste, if not all of it, in Ketchikan," Lane said, who'd like to eventually operate in all of Alaska's fisheries. "We're looking to capture a large part of Alaska's waste and turn something that's been a loser on the balance sheets of processing companies into a winner. If the 40 percent that's been costing them money generates just a penny per pound, it will create a few more cents per pound in value. That will create more value to fishermen. There's no way it won't."

As omega-3 awareness spreads, doctors have also begun prescribing it to patients at risk for heart disease and other diet-related maladies.

"We found something even doctors agree on," Lane said. "The growth in the fish oil market, even time during troubled economic times, is 20 percent to 30 percent a year."

Lane said his closely guarded extraction process is as gentle and cool as possible, making it unique in the marketplace and the closest thing to eating fish by nutritional value.

Depending on the individual's health, a range of two to six 1-gram capsules is recommended. The price for a 180-count bottle at Costco is roughly $17.

"If you need to boost your take of fish oil, the best way is to eat high oil fish like Alaska salmon," Lane said. "But if everyone went and bought a pound of salmon who needed it, there wouldn't be a fish left."

The possibilities for utilizing previously discarded fish waste, tapping into global markets and minimizing environmental impacts leave a scientist like Smiley with a distinctly unscientific way to describe the potential for the byproduct industry.

"There are gillions of things like this," he said.

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