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High-tech equipment helps seafood fishery 'make sure we don't repeat history'

Clearwater Seafoods

For most people, big data is not the first thing that springs to mind when considering commercial fishing on Canada's East Coast. But it's front-and-centre with Ian Smith, who took over as CEO of Clearwater Seafoods Inc., based in Bedford, N.S., in 2010.

"Every time one of our vessels goes to sea it gathers sonar data, data on tides and temperatures, what we harvested, where we harvested and in what quantities," he says. "We're working with a number of academic institutions in Atlantic Canada and the U.S. on modelling that data, and we have learned some fascinating things about the species that we harvest and about the ocean bottom type we should be focusing on.

"We're also trying to understand climate change and how it will impact our core species over time."

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Knowing more about the life cycle of clams, scallops, lobster, shrimp and snow crab, as well as where they like to live and when they are at their most abundant, helps Clearwater be more efficient on the water. But an equally important use of the data is helping the company harvest with a lower impact to the marine ecosystem.

Consumers are demanding this and the company's long-term success depends on it.

"We would like to be in business 20 years from now enjoying an even greater abundance of harvested species than we do now, and we do think that's possible," Mr. Smith says.

"The industry and government learned a very hard and painful lesson from the collapse of the northern cods stocks, and there's been a lot of research that has been done for cod and the other major species to make sure that we don't repeat history."

Technology is also increasing productivity at the company, which posted sales of $504.9-million last year. "We lower our cost structure, reduce our impact on the ocean environment, reduce our carbon footprint and become an even more sustainable company," Mr. Smith said.

Clearwater's proprietary automated shucking machines make it twice as efficient at harvesting wild scallops, for instance. When Mr. Smith joined Clearwater, it was using four major factory trawlers to harvest its scallop quota. To harvest its quota today, it uses only two.

"A lot of people don't think of Canada's fishing industry as a technology industry, and it very much is," he says. "And people don't think of Canada's fishing industry as renewable industry. They think of it as an extraction industry, which it is not. We look at our business as a renewables business."

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Clearwater was born in 1976 when John Risley and Colin MacDonald – now the company's chairman – were just two entrepreneurial guys selling lobster. Today, it does business in 45 countries around the globe. Half of its catch goes to the food service industry, a little more than a third to retailers and the rest to food processors.

Along the way, the company suffered its share of setbacks – restive investors, restructurings, downsizings, currency woes and quota surprises. Its survival through the ups and downs recently made an intriguing case study for Harvard Business School.

These days it is facing a more enviable challenge – keeping up with worldwide demand for seafood. To increase supply of product and keep customers happy, Mr. Smith is keeping his eyes open for strategic partners and acquisition possibilities.

Last year, Clearwater bought Scotland-based Macduff Shellfish Group for about $195-million and is integrating key aspects of the venerable 130-year-old company. As with any acquisition, there is tension inherent in this process. "We make it a constructive tension around value creation," Mr. Smith says, adding that the MacDuff name will live on as a Clearwater subsidiary because of the respect it garners, especially throughout Europe.

The acquisition gives Clearwater more marketing strength in some European countries, such as Italy and Spain, and a supply of new products, such as langoustine and whelk, a sea snail-like food popular in Asia and Europe.

"There is no shortage of growth opportunities for Clearwater," Mr. Smith says. "As I look out over the next five years, we have opportunities for growth both organically within our core business and also through M&A."

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