Episode 28: Doing Good and Doing Well: an entrepreneur's approach to oyster farming with Peter Stein of Peeko Oysters

In this episode, host Kevin Cox sits down with Peter Stein of Peeko Oysters on Long Island's North Fork to hear about his unique journey to becoming a visionary oyster farmer and the daily realities and complexities of oyster farming. He discusses the challenges of working with a "ruthless and relentless" Mother Nature, to the surprising obstacles of starting a business in aquaculture and building it into a vertically integrated business. Beyond the farm itself Peter introduces his innovative business philosophy, the intrinsic value of a living oyster reef and the concept of ecosystem services—the idea that oyster reefs provide long-term benefits to the environment beyond just human consumption. You'll hear about his push for a shift in corporate perspectives, where businesses understand and quantify the value that an oyster reef provides far beyond merely the market price of it’s parts. This episode is a must-listen for anyone interested in sustainable food, the intersection of business and environmentalism, or the fascinating world of oyster farming.

00:00 A Humbling Start in Oyster Farming

00:31 Introducing Peeko Oysters

01:39 From Job Loss to Oyster Farming

02:35 The Benefits of Oyster Farming

03:49 Starting Peeko Oysters

04:14 Exploring Vertical and Aquaculture Farming

06:31 Learning the Ropes of Oyster Farming

08:29 Current Operations and Techniques

09:58 Challenges and Innovations in Oyster Farming

13:18 The Hatchery and Scaling Up

18:54 Technological Barriers and Solutions

22:34 Contract Growing and Industry Opportunities

23:37 Exploring Contract Growing in Oyster Farming

26:09 The Role of Infrastructure in Oyster Farming

27:16 Diving into Oyster Varieties and Market

28:38 The Future of Oyster Aquaculture

30:10 Valuing Oyster Reefs Beyond Harvesting

40:11 Challenges and Learning in Oyster Farming

42:45 Balancing Business Growth and Daily Operations

46:46 Concluding Thoughts and Reflections

Links:

Peeko Oysters website (https://peekooysters.com/)

Oyster Heaven website (https://oysterheaven.com/)

FlipFarm website (https://www.flipfarm.co.nz/)

Greenwave website (https://www.greenwave.org/)

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Transcript

Doing good  and Doing well: an Entrepreneur's approach to Oyster Farming with Peter Stein of Peeko Oysters

(transcribed with AI technology)

[00:00:00]

Peter: I, met somebody at a conference and he said “I've killed way more oysters, than I've grown.” And he kind of said it as if it was like a point of pride. and you know, I'm sitting there like, kind of, uh, rose colored glasses on. I'm, thinking that I'm the best thing to hit oyster farming since sliced bread. And then my first winter I lose like 90% of my crop and I'm like, ah, that guy's knows what he is talking about. and out the window went my, hall of fame, oyster farming status.

 [Bubbles]

Kevin: Welcome to OYSTER-ology, a podcast about oysters, aquaculture, and everything from spat to shuck. I'm your host and the Foodwalker, Kevin Cox.

That was Peter Stein, the founder and owner operator of Peeko Oysters on Long Island's North Fourth. Today, Peter and I discuss his personal journey into the oyster world and the complexities of oyster [00:01:00] farming, including the various techniques he uses and the many obstacles he's faced. He provides honest insights into the daily operations, the countless challenges of running a growing oyster farm. The practicalities of building a vertically integrated business and Peeko's desire to scale production up to something far greater than just the sum of its parts. Our thought provoking conversation also covers the environmental benefits of oyster farming, including the concept of ecosystem services and the importance of a shift in corporate perspectives in order to understand and quantify the intrinsic value of a living oyster reef as something far more valuable than just the production yield of its contents. In considering nature's intrinsic value in business models, Peter offers a fascinating perspective about the intersection of aquaculture sustainability and big business.

So slurp down that half shell in your hand, and then think about the greater value of. Where it came from. As we talk about doing good and doing well, producing [00:02:00] food close to its destination, the challenge of growing large while still feeling small, the barriers to entry and oyster farming, the intrinsic value of oyster reefs, and putting nature on the corporate balance sheet with my progressive minded and visionary entrepreneur turned oyster farmer guest, Peter Stein.

 [Bubbles]

Kevin: Peter Stein, thank you so much for being my guest on OYSTER-ology today. It's fantastic to have you. Now, you are the founder and owner of Peeko Oysters up on Long Island, is that right?

Peter: Yes, sir. 

Kevin: Where on Long Island? 'cause I know Long Island is, well, you know, long.

Peter: Long Island is long. Um, we are in a tiny little town called New Suffolk, uh, which is about midway out on the North Fork of Long Island. So as you come out of New York City, both Queens and Brooklyn are on Long Island, technically speaking. and then the [00:03:00] island splits into the North Fork and the South Fork. The South Fork is where the Hamptons are, Montauk, Amagansett, On the North Fork, you have a bunch of hamlets. Um, I live in East Marion, which is, about seven miles from the very Eastern tip of the North Fork. Um, and Peeko oysters are stationed in two facilities. One is technically in the town of South Hold, and then one is technically in the town of New Suffolk.

Kevin: Now, do you have a background in oyster farming or aquaculture, or is this something you got into later in life?

Peter: More the latter. I love the water. I spent my childhood and adulthood, recreationally on the water, doing a lot of different fun activities. But this was something that I got into as a result of getting fired from a job. And, uh, I hate when that happens. Yeah. I [00:04:00] mean, hey, look, I am definitely a glass half full type of person, so it doesn't mean that I don't get down every once in a while. It just means that I am positioned to look at things from what's the silver lining to this? What's the small blessing behind it? And how can you turn a crappy situation into a positive one?

Kevin: So why oysters?

Peter: I think I can sum it up in one sentence, is that I view oysters as an amazing way to do both well and good at the same time. And, um, to expand on that a little bit, oysters, as you know, running your podcast and many people, um, who are fans of oysters in terms of consuming them, know that they are filter feeders, that the cages that we use to grow them, uh, provide habitat and sanctuary for additional fin fish species. Uh, there are all sorts of.  [00:05:00] What is becoming a more commonly used phrase and a more commonly known phrase: ecosystem services associated with oysters. That's the doing good part. Doing well is that there's an established market for them. That there is an established and hungry consumer base for them. So we know that we can sell them. If we can grow quality oysters, uh, I know that I can sell them. So it is a way to make a living and also feel really, really good about the natural world benefits that we are providing by making that living.

Kevin: How did you start Peeko Oysters, and what was the process that you had to go through there on Long Island to do that?

Peter: It's, it's a tough question to answer, simply because it's hard to sum seven years of work into, a couple of minutes, but  as mentioned, got fired from a job. [00:06:00] Um, and, started to think about aquaculture farming more broadly speaking. The first thing that I started to look at was actually vertical farming. So the idea of turning empty warehouses into multiple levels of production capacity for mostly what is being done in the world of vertical farming is leafy greens. Um, but that was fascinating to me. Uh, the use of both hardware and software technology in order to produce food, closer to its destination. I mean, you know, This comment is not about oysters, but it is pretty absurd that if you go into a grocery store in the Northeast and you buy a package of lettuce, most of that lettuce is grown in California. Uh, and what is lettuce? Lettuce is like 95, 98% water. So in a weird way, [00:07:00] we as a kind of American population are transporting water from California, which is like experiencing a decade long drought to New York. So that was kind of like the premise that drew me to vertical farming. But as I started to learn more and more about vertical farming, I started to learn about farming in general. And, and that extends to the water. I don't think that most people think of aquaculture as farming, but it is indeed farming. Um, and I started to read about aquaculture on the East Coast, uh, and more specifically in kind of like the New York metro area. So that would be, you know, New York, New Jersey, Connecticut. I read an article about, um, a pioneer in this industry. Uh, his name is Brent Smith. He runs an organization, called GreenWave, and he won a prestigious prize back in 2015 that I started to read about. And that got me extremely curious [00:08:00] and I started to say, wow, that's so amazing. Can I join his organization? You know, because I'm, I'm a free agent at this mo at this point in time, right? Right. Because I don't have a job. So can I join his organization and somehow contribute to what he's doing? Could I get something like that started out on Long Island? Is there something out here on the east end of Long Island already happening that I just don't know about? so that kind of curiosity position that I was in led to a number of conversations with people in the broader North Fork community who I knew.  And one conversation leads to another. I wind up getting introduced to somebody who wanted to sell their underwater lands Um, and there are more or less two paths on the east end of Long Island to get into oyster farming. You can either own lands in the water. Which I do, we own bottom land, under the water in the bay. So we actually own the bottom. can't stop you from boating [00:09:00] over it. but theoretically we could stop you from anchoring on it. and then the other path would be through a leasing program, either from one of the local municipalities or through Suffolk County. So I went down the former path, and as I was negotiating that deal and getting that deal done. I was basically apprenticing on any farm that would allow me to throw my labor and blood, sweat, and tears at it.  Again, free agency is a nice thing, right? Like, there's a, there's obviously stress that comes with it, but in many ways it can also be a liberating thing. So I said, I, I'm ready to work. Tell me what time to be there. You don't need to pay me.  I just wanna learn. So I did that. There were some people who said, yeah, be here at 6:00 AM There were other people who said, eh, I don't need you. Anyway, that's how I kind of got into it.  And started to assemble the puzzle pieces of the business on [00:10:00] top of that over the course of time.

Kevin: So you really learned as you went, and then I imagine once you started the farm, you learned a whole lot more on a daily basis. absolutely.

Peter: I mean, I, I like to think of mother nature as a both relentless and a ruthless teacher. So, you, you are learning every single day.

Kevin: How is your farm structured now? How much bottom do you own?

Peter: Across multiple parcels, we actually own over 400 acres now.

Kevin: No kidding. 

Peter: That's not a continuous piece that's separate parcels, that's three different parcels. And, that's a big number, but it's a little bit of a misleading big number in that our farm is not, utilizing all of that acreage. it's, it's tough to subdivide and just be like, oh, well I only want this 10 acre piece of the underwater bottom land. So, you know, you buy the parcel, if you're using it or not. Uh, once you own it, it's not a major expense. I mean, I pay. What, [00:11:00] something like $2,000 a year in property taxes.

Kevin: So are, tell me how you're growing oysters. Like what, what kind of techniques are you using on those plots?

Peter: Yeah, so we actually are using now a mix of both bottom culture as well as surface culture. We started out with bottom culture. using cages that consist of wire mesh trays that stack on top of each other and then bridle together. And as surface culture has evolved, we are now transitioning to some surface culture gear and, I hope that. By about this time next year, we will be almost entirely surface culture utilizing our bottom culture gear more for kind of like cold water storage, if you will. rather than for the growth and husbandry of oysters.

Kevin: What do you find is the advantage of using surface culture as opposed to bottom culture for actually growing the oysters?

Peter: So I think first and foremost it's labor [00:12:00] reduction. Um, you know, I mean, you're utilizing the wave energy of the surface to tumble oysters 24/7 jostle them around.  We are adopting a technology called Flip Farm. And as we implement Flip Farm, there are enormous labor efficiencies even over other, surface culture gear. Flip farm presents enormous labor savings. in terms of the hardware and how once it is installed, it is pretty bombproof. I mean I know that there are Flip Farm installations that have survived Cat three hurricanes. so, we are installing it in such a way that is going to make it pretty bulletproof. And once installed, it is going to present enormous labor savings to us.

Kevin: Right now, before you're up and running completely with your Flip Farm technology, what, are you taking barges out and hoisting [00:13:00] up your trays?

Peter: Yeah, we have barges out in the water that hoist these big cages. And then, bring them up to the surface. And, some of those cages are indeed already holding product grown to, you know, an inch and a half or two inches in size, with surface culture.  2025 is really a very much a hybrid year for us. You know, we have been thinking about Flip Farm for nearly two years at this point. Uh, team members of mine have visited Flip Farm installations, around the eastern seaboard. The founder of Flip Farm has come and visited us from New Zealand, uh, to look at the infrastructure and the equipment and facilities that we have at our disposal, to think about  whether this is a successful implementation of Flip Farm or not. because we are very much pioneering this for Flip Farm in the United States. Um, we're not the only ones, but, we are certainly among [00:14:00] a, select few at this point in time. So we're, we're still working some kinks out. Uh, but you know, that's to be expected. And, um, and you know, we've, I, I think thought through this very, very thoroughly. Um, and, you know, you can do as much thinking as you want at your desk. Uh, as I said before, Mother Nature is a ruthless and relentless teacher. So, you know, as we get stuff out into the water, anchored into the bay and start actually utilizing this technology and this, this hardware, it's, um, we're gonna learn more. But I think that we have a very good plan to lean back on in order to be able to adapt and adopt, as we get everything installed and implemented.

Kevin: How many people do you have working at Peeko?

Peter: Across the organization, we have, basically 12 full-time people. And then there are some part-timers as well, because it's not only a grow out operation, but we [00:15:00] are pretty close to a completely vertically integrated business at this point. We run a hatchery, as well as doing all of our own sales, marketing and distribution.

Kevin: Tell me a little bit about your hatchery.

Peter: Yeah, so the hatchery is another local business. We are taking care of brood stock. We are culturing algae, we are spawning oysters, and then rearing them or husbanding them, from larval stage on up to post set, and then, to juvenile oyster sizes. Um, so we really sell that seed to other local and regional farms, um, anywhere from, a millimeter to 25 millimeters in size. and it's yet another challenging business. the thinking that I was doing led me to believe that if I wanted to continue to scale the grow out farm To millions of oysters a year, I was going to need my own hatchery. Because otherwise sourcing seed [00:16:00] becomes difficult when you're trying to source not a million, but let's say 10 million or 20 million oyster seed. Um, it is also an enormous drain on your working capital on an annual basis.

So, three years ago there was a local hatchery run by, a local woman named Karen Rivara, who, um,  She and I started talking about three years ago at this point, maybe even longer. Um, and, we wound up, closing that deal in September of 2023. Um, so I have now been kind of quote, running the hatchery, um, for two seasons. and I say quote, running the hatchery because, you know, I'm, I'm not a marine biologist. I have probably more knowledge about different species of algae than the average person on the street. But, my knowledge on that subject pales in comparison to the people who work with me at the hatchery. So I'm handling more of like the business side of things and trying to support my team from an administrative perspective. [00:17:00] And, um, all of the backend stuff that goes into running a business is where I spend my time. and I like to try to help out physically and whatnot when and where I can. But, you know, the business still, the trains still have to run on time and everybody's gotta get paid. And, there's complexity to that when you have a double digit number of employees.

Kevin: So to do that and grow oysters and the marketing and all of that, it sounds like you really have your hands full.

Peter: The short answer to that is absolutely yes, unequivocally yes. There are enormous challenges to do what we're doing. But I think that there are also really big benefits to it as well, in terms of the longer term growth prospects of the company. And, uh, opportunities that we see presented to us, in terms of, you know, speaking engagements, opportunities to do private dining room events with both restaurants as [00:18:00] well as like corporate organizations. food service organizations, right? and that, that is a result of sales efforts. Right. And, it's not just like, Hey, I'm here to sell a widget. Like, we're here to really talk about oysters and really think about oysters in the same way that we talk and think about the level of maturity  of the wine industry, right? I mean, I probably fall more into the category of the guy who's ready and willing to buy like a bottle of two buck chuck off the shelves at Trader Joe's. Um, but, you know, there are a lot of people out there that like, spend a lot of time talking and thinking about wine. And the industry is a very mature industry. I mean, it's thousands of years old, right? Um, you have laws in France and Italy that govern how you can market and how you can talk about, uh, different varieties of grapes, Et cetera, et cetera. Um, I don't know that oysters in my lifetime will mature to that point, but I think that we are trying to bring some of [00:19:00] that maturity, some of that sophistication and at least try to, incorporate some of that into the world of oysters.

Kevin: So in addition to the hatchery side of propagating oysters, you must then have a husbandry side of it with a flupsy and that sort of thing to take your oysters from the hatchery before you're ready to actually put them out on the bottom.

Peter: Yeah. It's true. So we do have two flupsy sites, and tens of flupsy barrels. Mm-hmm. Um, I am not a big fan of flupsys. and I wish that we could avoid flupsys, but for right now, they're kind of a necessary evil. Um,  I don't mean to be so negative on a piece of equipment, uh, but, they just are, are finicky, they're a great way to grow juvenile oysters from about two millimeters on up to about eight or 10 millimeters.  but, they're pretty labor intensive and, I would like to think about ways to, kind of avoid flupsys, [00:20:00] and, and that's perhaps a little bit of a harsh way of describing a flupsy. Um, but that being said, I think that for right now, they're the tools that we are gonna be working with, at least for that kind of short lifecycle stage of an oyster from, uh, two millimeters on up to, uh, let's call it about 10 millimeters in size. Um, but we are aiming, this year and next year, to get the oysters out of the flupsys as soon as they do achieve 10 millimeters in size, and, and reduce our reliance on flupsys.  but I would say that it is not the biggest bottleneck, for us to solve Um, there are probably a couple of other bottlenecks, that are, ranking higher on our priority list than, eliminating flupsys altogether.

Kevin: What are those other bottlenecks that you're struggling with?

Peter: So implementing Flip Farm is one of them. Uh, and at a certain point as we continue to scale, distribution is gonna be a little bit of a bottleneck. And then just like the sorting and the [00:21:00] counting of oysters, becomes a bottleneck. You know, sorting oysters by hand is not the fastest way. Think about like the berries industry, right? I mean, like, think about going into any grocery store in the United States, like you can walk in and you can get a clamshell plastic container of strawberries or blueberries or blackberries or something like that. And you can do that basically 365 days a year, right? For very good reason we don't think about all of the work that goes into that clamshell container of strawberries being on that shelf 365 days a year. And if you start to unpack that it's huge efforts that, go into that. And I find it fascinating that there are like all these types of industries and products that we just kind of take it for granted. But each one of those clamshell containers is not packed by hand, right?

There's highly sophisticated, highly engineered pieces of equipment that pack these things [00:22:00] in space efficient ways and do so with the lightest touch that you can possibly have in order to not damage the berry. And that's really cool and really fascinating. and there is indeed technology that we can utilize in the world of oyster farming, to do the same thing.

Kevin: I would think the problem for a lot of oyster farmers, and this is something maybe you've experienced, especially as you were starting up, was the barriers to entry are very high for buying that kind of equipment I would imagine that, you know, you, you gotta grow and sell a hell of a lot of oysters to be able to support some of the costs of these technologies, I think

Peter: You're, you're absolutely right, you know, there's a laser sorter, for oysters. Uh, just the piece of equipment itself is gonna be six figures.

Kevin: Yeah.

Peter: Um, and then if you start to really think about that, okay, well, where are you gonna put that piece of equipment? What are you gonna just stick it in a shipping container?

Well, [00:23:00] now you have to plumb that shipping container. You have to electrify that shipping container. Uh, you have to light it, you have to drain the water that's being used. Uh, again, we take the clam shell container of strawberries a little bit for granted.

Like, okay, well you don't just buy this piece of equipment. And then it's like, okay, yeah, yay, we're, we're off to the races. and then there are hiccups like, you know, I know people have used the laser sorters. And I think the promise of them, the concept of them is wonderful, but like in practice, they don't always work as well as you want them to.

 So now you've invested, into the six figures to have this piece of equipment and you're like, oh, shit, it's not as great as I thought it was gonna be. So now you have to tweak it and you have to go back and forth with the manufacturer. You have to say, oh, well, this isn't working. Oh, well, we can tweak that, and we have to send a tech out. And that tech is coming from Prince Edward Island. and now you have to import from Canada, different pieces. And, the current administration certainly isn't making that any [00:24:00] easier or less expensive. and now all of a sudden a year has gone by and you've barely implemented and installed this new piece of equipment that you've spent,

Into the hundreds of thousands of dollars on Yeah. Flip Farm is no different. Uh, so I think you have to be operating at a certain scale in order to warrant the investment into these pieces of equipment. You know, if you're producing 50,000, a hundred thousand oysters a year, like just do that by hand.

Like that, that's just, it's not worth it. Yeah. Um, I do believe that there is opportunity in the oyster farming industry, for models that are seen in other ag industries, for what they call contract growing. and, there are some examples of this that already exist in the world of oyster farming.

Um, I think Island Creek does a little bit of it up in the Duxbury Bay area. I mean, if you look at other industries in the broader world of ag, contract growing exists left and right, uh, in poultry, dairy, viticulture, all sorts of stuff.

So I think that there's a lot of [00:25:00] opportunity for businesses that are achieving scale to bring that infrastructure to the benefit of other smaller farms. and there's a lot of mutual benefit to be had there

Kevin: . So contract growing is where basically you will farm out your production of, let's say, oysters to small oyster producers from different areas who may then grow and sell directly to you so that you can add them to your farm. Is that sort of how that works?

Peter: I think in a nutshell, you've described it accurately. I think there are a lot of different kind of shapes and forms and tweaks that can be made to that concept. Um, but, I think conceptually you've described it accurately and succinctly.

Kevin: This brings me to something that we had talked about before we started recording, and that was utilizing some of your technologies that you've invested in, as a service to smaller farmers who don't have that ability. [00:26:00] Tell me a little bit about your thoughts on that.

Peter: Yeah, well, I think that that is, kind of in a nutshell why contract growing exists, right? To just draw from an example outside of oyster farming, here on the North Fork of Long Island, there's a prominent history of growing grapes for wine.

Kevin: Mm-hmm.

Peter: it's nowhere near the maturity of, Napa Valley or anywhere in France but the first vineyard got started out here in the early seventies, and now you have farmland, where, you know, I could enter the wine industry and I could say, you know what? I have a warehouse and I'm just gonna utilize this warehouse to install all sorts of different pieces of equipment for the pressing of grapes and the fermenting of the grape juice, and the production of wine.

But I'm not gonna actually grow grapes. I'm just gonna buy the grapes from you, Kevin, because Kevin, you have 150 acres that you grow grapes and you are expert at soil [00:27:00] health, at plant health. You are a viticulturist, right? And you're not a winemaker, but you know how to grow great grapes, right? And the challenges that, again, mother nature is gonna throw at you and you can adopt and adapt to the challenges that mother nature throws at you on a seasonal and if not a weekly basis. So you grow fantastic grapes and that's what you do. And now you sell those grapes to me and I have this warehouse and I'm a wine maker and I know how to make the wine. But I don't know how to bottle it. I'm not a label designer. I'm not a distributor. I'm not a marketer. Okay. So I'm gonna bring in yet another component of the production and the distribution of wine and getting it from the grape that you grew fermented and delicious and then onto a shelf at a store, and ultimately onto a table in a home or at a restaurant. There are a lot of components to that, and there are people who are experts at various different components [00:28:00] of that. So, when you think about investing into these different things, which is kind of how we went down this rabbit hole, and thinking about the expense of that, well, you better be utilizing those assets at a certain rate.

When you look at accounting or business metrics, you think about asset utilization rates. You know, if I own a refrigerated truck or if I own a fleet of refrigerated trucks, you better have those trucks on the road basically as close to 24 7 as you possibly can 'cause otherwise you're not getting your money's worth out of that asset. So, forgive me for the tangent, but I think it's related to what you were asking with respect to, utilizing some of the infrastructure that we have to the benefit of the broader oyster farming industry here on the east end of Long Island,

 You know, we are building infrastructure and we are intending to scale our business, to the point where we are utilizing those assets and that infrastructure at a rate that makes us profitable. But could we be [00:29:00] utilizing the oyster counting machine or the laser counter if and when we get one 24/7? Um. that would be wonderful.

Kevin: Yeah. Tell me a little bit about the oysters that you're actually growing there. Are these all Eastern oysters or do you have other varieties as well?

Peter: So it's all Eastern oysters. Um, to my knowledge, you are not permitted to grow anything other than Crassostria virginica in New York waters.

  Um, so, as you know, as a OYSTER-ology podcast director, um, every East coast oyster is the same genus and species. So the oysters that we grow here tend to have a nice briny quality to them. Um, usually, the kind of common description is a briny punch up front and a sweet clean finish to them. That's typically how I describe the oysters in terms of flavor profile and whatnot.

Kevin: Are you selling principally for the half shell market, or are you also canning [00:30:00] or doing anything else?

Peter: Yeah, just the half shells. Um, mm-hmm. So we sell directly to restaurants, and, as I mentioned, we do all of our own last mile distribution currently.

Kevin: Man, talk about a soup to nuts operation. You guys are doing it all. 

Peter: Yeah. I think the only way, uh, that we could become more vertically integrated would be as if we had our own restaurant, um, which I, I think my cardiologist would probably advise against it.

Kevin: Nobody wants to work that hard if they don't have to. That's my thinking.

Peter: Yeah. Yeah.

Kevin: Now, we had a very interesting brief conversation before we recorded where you were talking about. Uh, the future of oyster aquaculture and the perception that both corporate investors and others might have as to how you valuate, an oyster or oyster reef or oyster operation. And you were talking about looking at it as more than just the sum of its [00:31:00] individual parts or their per unit value versus kind of a bigger picture. Mm-hmm. Tell me a little bit about your thoughts on that.

Peter: Yeah, and, and as I'm sitting here, I'm, I'm nodding vigorously and realizing that we're on a podcast and, and not, uh, not on video. So, um, you obviously can't hear, uh, my nodding, but, um, but yes, I am absolutely thinking about the future of oysters in a way that is not just growing oysters for human consumption.

 I learned about this, through another podcast. and, the podcaster had on a gentleman by the name of George Birch, who runs a Netherlands based company called Oyster Heaven. As a result of that podcast, I am now in touch with George. He has been over here to the US to, visit me and see our operation, and, talk about, ways in which we, might be able to support the efforts of what's happening in Europe [00:32:00] That oyster heaven is putting forth. Um, so the headline that you're talking about is that an oyster is more valuable in the water than it is harvested and on your plate.

So to unpack that a little bit, we earlier mentioned the idea of ecosystem services, right? I said, I like oyster farming because I think I can do both well and good at the same time. And many, many people are fans of oysters because they do such wonderful things for the environment in which they grow. So now think about that as opposed to us doing that in cages, but doing it in a more kind of naturally installed way of, of oyster reefs. and at a scale where, an oyster reef, it's not just like, a single, square yard, but it's a, an acre, of an oyster reef. and how do you do that? Again, enormous complexity behind that. And then, how do [00:33:00] you monetize it?

Kevin: Mm-hmm.

Peter: So what's happening right now is that Oyster Heaven is starting to install these reefs in some European waters. and you have Oyster Heaven actually monetizing and being able to quantify the ecosystem services that these oyster reefs are providing, to, businesses. As I've gotten more and more into oyster heaven and these oyster reefs, as well as learning about who is investing in these types of businesses because this is a very much a long term play. but there's a lot of potential value here. I don't know that it's very much like a venture capital backed business, but certainly like a family office backed business. And there are investment firms that are advocating for the idea of putting nature on the balance sheet. Right. and how do you do that? so. I'll give you yet another analogy that is outside of [00:34:00] the world of oyster farming, or oyster reef installations. Um, we all have a phone in our pocket these days. And when you think about the value to you, what is the value of that phone? The value of that phone is not like, okay, well there's, you know, a 15 grams of titanium and 17 grams of copper and then some gorilla glass and like the value of the materials that, that comprise this phone, it's the utility that you get out of it, right? Your connectivity to your family, to your friends, the ability to FaceTime your grandmother, et cetera. So the value of the phone is far greater to you than the sum of the value of the materials that comprise it. I think take that thinking and apply it to a tree, right? You can look at a tree and you can say, okay, well, if I cut that tree down and I mill it into, um, I'm being overly [00:35:00] simplistic, but, if I mill it into two by fours, I can sell those two by fours to Home Depot and therefore we can create a value of the tree, right? Mm-hmm. And the rest of it, I'll create wood chips out of it and I can sell it for people, to mulch their flower beds and whatnot, okay? And, now we can kind of establish a value of that tree, but if you don't cut it down and you leave it standing. It is home to birds. It provides shade to the forest floor. It provides nutrients to the forest floor when the leaves fall and biodegrade. The root system of the tree provides habitat for all sorts of insects and other burrowing animals. You know, woodpeckers find their sustenance out of trees. Um, I'm not an arborist, I'm not an environmentalist, from a scientific perspective, I'm just purely thinking about this from a conceptual way that, [00:36:00] um, you can value a tree very differently.

Kevin: Yeah.

Peter: So apply that same thinking to an oyster reef and think about how an oyster reef is filtering water, is mitigating against storm surge, is preventing erosion, is providing sanctuary and harborage to juvenile finfish species. as well as things that are way outside of my wheelhouse. Such as, things that, chemists that might get into, you know, um, different ways in which the chemical makeup of water is positively impacted by an oyster reef.

Kevin: Carbon sequestration, all kinds of things, right?

Peter: Exactly. Nutrient sequestration, right? We try to expand the idea of carbon. Carbon capture is a big thing that all sorts of very wealthy people like Bill Gates and Jeff Bezos are investing into these days. but I think it expands way beyond carbon. You're talking about ammonia and nitrogen and that has to do with water filtration that oysters do naturally. And then the sequestration of those [00:37:00] nutrients into their bodies and into their shells. and then furthermore, if we do indeed harvest those oysters, um, and let's say we are shucking oysters for the meat of the oyster and not for the half shell market, what can be done with those shells? I know that there are all sorts of like construction materials companies now, there are cosmetics companies now that are actually utilizing oyster shell in concrete aggregate in like face creams and I think that's super exciting. Uh, I think it's gonna take a long time to mature. Um, but it's really, really exciting.

Kevin: It's interesting because it almost sounds like it requires a resetting of the mindset in terms of how do you quantify monetarily the value of the woodpecker's presence around the tree or the sequestration of carbon or other chemicals from a [00:38:00] profit standpoint. I'm curious how you think one can value that so that investors can actually see the value of a reef as opposed to just harvesting oysters or cutting down the trees and making two by fours for Home Depot.

Peter: Yeah. To use a real life example, you have enormous amounts of fish being harvested out of the North Sea. You are company X and you are harvesting fish out of the North Sea. Whatever you do with that fish is irrelevant to this example and to this conversation. But if you are going to continue harvesting that fish out of the North Sea. And you are simply gonna maintain your existing business, meaning like you're harvesting a hundred metric tons of fish out of the North Sea on an annual basis. If you are going to continue doing that in years going forward, you're gonna have to figure out ways to replenish the stocks of those fish. And oyster reefs are a very, [00:39:00] very effective way of doing that. So in that way, company X is saying, okay, well hey, I'm harvesting a hundred metric tons of fish out of the North Sea today. I wanna actually grow that business to be 150 metric tons a year. Like, if I just do that and I invest in another ship in order to be able to harvest more fish, I'm gonna deplete that resource. So I need to figure out ways in which I can replenish that resource. So you kind of go back in the quote, supply chain, and you have to have more juvenile fish, more juvenile fish. You know, you're not gonna just simply grow those in a fish hatchery and then release them into the, into the wild. There's all sorts of problems with that, but oyster reefs are a way to do that. There's a very direct way to monetize an oyster reef there, right? accountants will ultimately get involved But, on a conceptual level, I think it's probably pretty easy to grasp that if you are company X, you may [00:40:00] wanna invest in those oyster reefs so that you can continue harvesting those fish out of the North Sea.

Kevin: How would an oyster reef be effective? Is it by creating habitat or something else?

Peter: Yeah, to my knowledge it's habitat. In the same way that coral reefs are habitat for all sorts of sea plants as well as juvenile, fin fish. Mm-hmm. oyster reefs function very much the same way. I mean, you know, you don't see a lot of coral in this area of the world. But we do have reefs, I mean, you go back a hundred, 200 years, oyster reefs were everywhere. Yeah. And we have depleted those oyster reefs, you can take a very capitalistic approach to this, right?

You don't have to be kind of this uh tree hugging type of person but, you know, there are multiple approaches that are satisfied and should be fans of this idea. We need to be using the ocean without using it up. And I think if you really start to internalize what that means is that like nature is really good at creating [00:41:00] balance. And there are a lot of ways in which you can get behind that from a profitability perspective, from a conservation and preservation perspective, um, even from like a nutritionist perspective.

Kevin: How do you show the value to corporations and investors who are still stuck in maybe a different model?

Peter: As slow as it may be, there are definitely companies, individuals, who are trying to figure that out like how do you understand the value that an insurance company might see in an oyster reef versus the value that Pellegrino might see in an oyster reef. Mm-hmm. Um, Uh, you know, I mean, this is not easy work. This is, a very in depth understanding of what happens in corporate boardrooms, as well as just being able to describe it succinctly and, convincingly, around. Exactly what you're asking. [00:42:00] so unfortunately I don't have the answer to that question.

Kevin: Have you had much experience with oyster diseases die-offs or vibrios and that sort of thing that affect your ability to produce or to sell your oysters?

Peter: I mean, knock on wood, not really. There are always challenges, that we face in terms of, different ways in which oysters can be adversely affected by, bacteria or, sponges or algal blooms. Yeah. But, we have not had anything that wiped out our crop except for in my first one or two seasons where I didn't know my ass for my elbow. Not that I do now, but, um, we have multiple different sites on which we can grow oysters. Mm-hmm. because, these different pockets of the bay might be affected by an algal bloom. And, you know, I think that there's benefit to creating the opportunity for redundancy in the same way that like, tech companies have data centers, and [00:43:00] those data centers are backed up in different geographies. You know, we have something similar on a smaller geographic scale. We are building redundancy so that way we can prevent some sort of catastrophic loss to our crop. 

Kevin: On the, uh, on that whole learning process, um, I think I had a couple of different farmers who have said in, in one way or another that you don't really have a lot of credibility in the eyes of other oyster farmers unless you can say, you know, in rough terms how many millions of oysters you've killed in the process of learning to grow them yourself.

Peter: Absolutely. I mean, my first couple of years I definitely killed more oysters than I grew. and I'd say that our mortality rates are still higher than I'd like them to be. Yeah. Um, you know, I met somebody at a conference and he said almost the exact words that you just said is that I've killed way more oysters than I've grown. And he kind of said it as if it was [00:44:00] like a point of pride. a right of passage. 

Kevin: A badge of honor. Yeah. 

Peter: Yeah. Badge of honor. Exactly. and you know, I'm sitting there like, kind of, uh, rose colored glasses on. I'm thinking that I'm the best thing to hit oyster farming since sliced bread. And then my first winter I lose like 90% of my crop and I'm like, ah, that guy knows what he is talking about. and out the window went my hall of fame, oyster farming status. Again, that goes back to what I said about Mother Nature being a very ruthless and relentless teacher.

Kevin: That's so true. What would you say are your biggest challenges facing you right now with Peeko?

Peter: Um, I mean, there are a lot of challenges, like on a day-to-day basis we're facing challenges in terms of just like, you know, it's a complex operation. Um, you know, I think, uh, growing a business is really, really hard. Running these separate businesses, and kind of coalescing them into one is definitely a challenge. You know, I very much [00:45:00] want. People that work with me to enjoy their jobs, to gain satisfaction out of it, to be satisfied, both in terms of personal fulfillment, um, as well as financial fulfillment. That is kind of, I think, a bigger, broader challenge. Um, but then you have the day-to-day stuff of, you know what I mean? A couple weeks ago, um, we actually were scheduled to speak, and I had to cancel, I had to postpone because we had a boat sink. So my crew gets out to the farm at five o'clock in the morning and they're like, "Pete, the, the boat is not here."

Um. And so, you know, that completely derailed not only my day, but my week, right? but our customers still expect oysters, right? So how do we do that while recovering a boat from the bottom of the bay while dealing with an insurance company, an insurance claim, uh, while dealing with backup plans and shifting operations from one boat to another, and cataloging or [00:46:00] inventorying the loss of the equipment that we had on the deck of that boat that is now scattered somewhere across the bottom of the bay, probably never to be found.

Um, you know, yeah, a boat sank, but like the dominoes are still falling as a result of that, two, three weeks later. Then there are the longer term thinking things around how do we continue to grow this business? How do we move not, uh, a million oysters a year, but 10 million oysters a year while still maintaining that kind of like close to home, close to the food, close to the source, close to the bay feel for all of our customers. Um, and, um, and then thinking about, you know, hey, do we want to have like larger marketing efforts and, how do we talk about our brand What are our brand guidelines? What's our brand color palette like so these are, these are kind of the. Higher, more strategic level types of thinking challenges that, that, uh, that we're going through. I mean, I'm shifting from [00:47:00] a cash to accrual accounting basis and, like, that requires day-to-day work in order to make that shift. Uh, and, and how are you inventorying product and not only inventorying product, but inventorying labor, and that labor therefore goes on your balance sheet and then comes off of your balance sheet. and it's a much more sophisticated way to do accounting for a company, but it requires work. Um,

 Those are the challenges that I face on a daily basis. in between the insurance claim and in between the, ice machine breaking or the, delivery vehicle needing an oil change or, all of these kind of day to day little fires that have to be put out as well.

Kevin: It's so much more than just getting in the water and growing oysters, isn't it?

Peter: Kevin, I cannot tell you how much I wish I could just be like, you know what, I'm just gonna go physically work on the boat all day. I would love to do that. Um, I really, really would. and I find it a lot of fun, and I try [00:48:00] to afford myself the opportunity to do so every once in a while. Um, but I will tell you, when I do spend the day doing that, I come back to an inbox that is full of, you know, 50 unread text messages, et cetera, et cetera. Hey, it's a lot of fun running a small business. You just have to kind of have the, appetite for it

Kevin: At the same time raising kids and having, you know, a real life too.

Peter: There, there are shitty days that we all have. but I would say I'm putting up more Ws than Ls, in terms of just like wanting to come to work rather than, dreading going to work on a daily basis.

Kevin: Well, I have to say that, as good as that is, I could listen to you all day long and well, 

Peter: Thank you. 

Kevin: You are absolutely fascinating and you bring a perspective to oyster farming and the future of aquaculture and the different ways to look at it that I find very refreshing and vitally important actually.

 Well, Pete, thanks so much for your [00:49:00] time, and I know just from listening to this alone, how busy you are. So I am so grateful to you for taking the time outta your busy schedule to talk to me and help our listeners understand what you and Peeko Oysters are doing. Thank you so much. It's been a pleasure, Kevin.

Peter: Thank you.

Kevin: Well, that's it for this episode of OYSTER-ology. Thanks so much to my guest, Peter Stein of Peeko Oysters. Links to Peeko's website, along with other things mentioned in our conversation are included in the show notes along with the transcript, so be sure to check it out and please like and follow ology wherever you listen to podcasts. The more followers we get, the more others will discover us too. And if you like this episode or wanna say anything about it. Please leave a comment to let me know. Thanks so much for listening, and be sure to join us again next time when we pry open the shell of another interesting oyster topic.

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