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Ocean Nutrition thinks local - on a global scale

Ocean Nutrition marketing and sales head Jon Getzinger, left, and CEO Martin Jamieson in their company's research laboratory at in Dartmouth, N.S., Oct. 6, 2011.

Paul Darrow for the Globe an Mail/Paul Darrow for the Globe an Mail

For most of its 14 years, Ocean Nutrition Canada sent salespeople – or "emissaries," as chief executive officer Martin Jamieson calls them – from its Halifax head office to woo potential customers around the world.

That worked fine when ONC was a small company seeking to carve a niche for its nutritional food supplements in export markets, particularly the United States.

But as the company grew and its U.S. market matured, ONC's executives decided the best way to drive business beyond North America is to think and act locally, by building a network of overseas offices staffed not by Canadians, but local managers.

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The company now has an office in Spain staffed by a Spaniard; a U.K. bureau overseeing Europe, staffed by a Dutchman; and an East Asia office in Shanghai, staffed by a Chinese-Canadian and a Malaysian.

"We are moving from being an exporter without feet on the ground to an international company with a decentralized sales team," Mr. Jamieson said

"We're looking to mine local insights," he explained. "We're not trying to be Canadian everywhere. You can't be that: You have to be Canadian in Canada, and Chinese in China."

The decentralized focus is fitting, given that while ONC is owned and headquartered in Canada, and is one of the country's strong examples of innovative success, there is almost nothing Canadian about its actual product.

ONC was founded in 1997 by Nova Scotia seafood baron John Risley, a director of Clearwater Seafoods Inc. , who sought to develop health-food supplements from the ocean. He seized upon the nascent appetite emerging among Western consumers for omega-3 nutritional supplements.

The kind of omega-3 found in fish oil (rather than plants such as flax) contains two essential fatty acids, EPA and DHA; they are largely lacking in modern diets and are believed to fight heart disease and a host of other ailments.

The world's most prolific source of EPA and DHA is the huge anchovy fishery off the coast of Peru, where factories turn anchovies into fishmeal for customers such as aquaculture farms. That is where ONC finds its raw material, in the nutrient-rich oil that was once a byproduct of the fishmeal industry.

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ONC has two processing plants, in Nova Scotia and Wisconsin, where the raw oil is refined for use in omega-3 capsules, as dietary health supplements. It also produces oils and an omega-3 powder as additives that are cooked into a range of food products, from margarine and yogurt to bread and juice.

ONC, which is privately held by Clearwater Fine Foods Inc. and a minority partner, Richardson Capital Ltd. of Winnipeg, is the world's largest supplier of omega-3 fish oil. In 14 years it has grown from four employees to about 300. Its 2009 revenues were $126-million and although ONC declined to release later figures, it says sales have increased about 20 per cent annually in recent years.

About 40 per cent of ONC's sales now come from the United States, but the company expects future growth will lie outside North America. In addition to its decentralized international sales staff, ONC plans to create what it calls "matrix teams" of employees focused on a particular foreign region, each with its own goals, profit-and-loss performance statements, and dedicated resources.

"Currently all of our customer service people are sitting here in Halifax," noted Jon Getzinger, ONC's chief sales and marketing officer. "That doesn't work well when there's a service interruption because of a strike on the wharf in Shanghai. ... Having these international teams set up will help determine what's best for our different world areas, help us respond to local events there, and allow us to go out and attack the business with local personnel."

Mr. Getzinger noted that consumer tastes vary widely from culture to culture, making localized market research a critical part of ONC's approach. In Australia, for example, there is a much higher consumer awareness of omega-3s than in East Asia. In China, meanwhile, the government has officially recognized the importance of omega-3 in diets, and this helped ONC become a supplier to the maker of a widely used Chinese cooking oil.

Taking an aggressive international approach also leaves ONC vulnerable to foreign events it can't control. With 90 per cent of its raw material sourced from the Peruvian anchovy fishery, for example, ONC is heavily dependent on the health of that industry – which collapsed in the 1970s due to overfishing. Peru now has strict conservation quotas on the fishery, but as The Economist magazine reported this year, some Peruvian scientists said there is "still not enough information about stocks to know whether [the fishery]is sustainable."

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The omega-3 industry has also faced recent setbacks on the food-additive side of the business, an area where ONC hopes to grow. Last year, Kids Nutrition Report, a U.K.-based journal, declared that the "omega-3 craze is over," at least with regard to food and beverages, noting that higher prices for omega 3-enriched products had led to poor sales.

ONC's leaders are undaunted by such challenges. They point to the company's Halifax research facility – the largest private marine research lab in North America – as proof that ONC is focused on the need to find new, more cost-effective ways of putting fish oil in food.

"Complacency kills companies," Mr. Jamieson said, "and we will not be complacent."

Special to The Globe and Mail

Editor's Note: An earlier online version of this story and the original newspaper version of this story gave an incorrect title for John Risley, and gave an incomplete name for the company that is part owner of Ocean Nutrition Canada. This online version has been corrected.

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