Keith began his professional career as an entrepreneur at the young age of 22 when he launched a wholesale seafood company, consulted for a New York-based commodities exchange, and developed risk management strategies and commodity analysis programs for hedge funds and Commodity Trading Advisory (CTA) firms. Having grown up on Long Island, NY, with family who owned commercial groundfishing vessels, Keith saw an opportunity to merge finance and fishing.
Briefly describe Open Ocean Trading’s model.
Open Ocean Trading is championing a reinvented transaction model that fundamentally changes the way fishermen and end buyers think about purchasing and selling seafood. By enabling forward contracts, we work directly with fishermen to bring their intended harvest to market. Our main focus is providing financial stability to fishermen, especially during times of low quotas or low market prices, which we achieve by pre-selling their catch and thereby eliminating their price risk.
What are some of the challenges you’ve faced in championing this model?
When we first set out, we believed that the unmistakable benefits a forward contract offers to the industry would transform overnight the way buyers and sellers operate. We realized rather quickly that changing the way people think and act is a long process. The challenges inherent in simultaneously adopting the roles of transaction enabler and transformation leader in the seafood industry quickly became apparent to us as a barrier to overcome. Balancing the two positions is what has enabled Open Ocean Trading to be a leader in this arena and grow profits for both our investors and our clients.
How does forward contracting help end overfishing?
The current marketplace for seafood is based on a reactionary model: a fisherman fishes what he can and the market re acts to what he caught. Our system transforms this model into a proactive one: fishermen harvest what they can access in accord with what the market wants. We’re transitioning the way buyers and fishermen interact; looking at what the oceans can sustainably offer and matching that with what the market wants. When fully balanced and assimilated across the supply chain, this model changes the way seafood is bought and sold by aligning our consumption of fish with what the ocean can realistically provide. Open Ocean Trading is transforming the way we interact with our oceans by shifting the dynamic from, “What do I want from the ocean?” to “What can the ocean provide for me?”
How did the idea for Open Ocean Trading come about?
I grew up on Long Island, NY, with family who owned a commercial fishing trawler. My uncle constantly explained me how “unfair” the seafood market was for fishermen, to the extent that it provoked me to purchase a truck and begin a wholesale company at the early age of 22. I ran this company for three years during which time I experienced firsthand the market for seafood. I competed directly with established wholesalers to market traceable, local fish to restaurants and supermarkets in New York City and the tri-state area. To gain a market advantage, I tracked down boat captains in local hangouts to establish what their fishing plans were going to be over the subsequent week or month, and would then provide this insight to clients so they could plan their menus and promotions accordingly. The main issue that I encountered was that I could never attach a price to any of these anticipated sales. So I spoke with my cousin—he owned a futures trading firm and environmental exchange in New York—about this challenge, and quickly realized that what we needed was a forward pricing mechanism for seafood. I continued to research and develop this idea over the course of six years, working with multiple commodities firms and constantly reaching out to seafood industry stakeholders to shape this concept. In May 2012, we established Open Ocean Trading and launched our forward contracting platform.
What are some of the other initiatives that you’re currently working on?
In New England, the groundfishing industry has suffered a period of drastic quota cuts and hugely increased pressure on what is a small and diverse fleet. To offset some of this pressure, Open Ocean Trading (with Future of Fish’s support) spearheaded an event program at local colleges and universities intended to stabilize pricing and direct institutional buyers toward “focus fish"—underappreciated yet commercially important species—that help local fishermen. Our program has been received by 15 institutions in New England thus far, providing fishermen the necessary stability to plan their businesses by creating a market for their fish within local schools.