INNOVATIVE MARKETING OF HAWAIIAN PONGEE - PHASE II

• Sponsoring Institution: National Institute of Food and Agriculture
• Project Status: COMPLETE
• Funding Source: SMALL BUSINESS GRANT
• Reporting Frequency: Annual
• Accession No.: 1002895
• Grant No.: 2014-33530-22534
• Cumulative Award Amt.: $450,000.00
• Proposal No.: 2013-02680
• Project Start Date: Sep 1, 2014
• Project End Date: Aug 31, 2019
• Grant Year: 2014
• Program Code: [8.12]- Small and Mid-Size Farms

Recipient Organization
HAWAII FISH COMPANY
PO BOX 1039
WAIALUA,HI 96791

Performing Department
(N/A)

Non Technical Summary
Pongee Channa sp. are an esteemed freshwater food fish in Asia, Hawaii, and domestic Asian seafood markets. Traditional customer preference is for a live product. However, the U.S. Fish and Wildlife Service banned the import and interstate transport of live Channidae in 2002. Therefore, the only options to market Hawaii-grown pongee outside of its established range on Oahu, Hawaii are as fresh chilled, frozen, and value-added products. Hawaii Fish Company (HFC)'s long-term marketing goal is to have Hawaiian pongee become recognized as the world's finest Channa, in the way that Copper River salmon is marketed as the world's finest salmon. HFC's Phase I research confirmed the feasibility of marketing fresh and processed Hawaii-grown pongee products to local Asian seafood markets and restaurants and to fine-dining Hawaiian fusion cuisine restaurants in Honolulu, in lieu of the now prohibited live Channa imports, and to the Hawaii visitor industry with the development of a shelf-stable product line. It also confirmed the feasibility of addressing two customer-identified pongee appearance issues, fish coloration at harvest and management of post-harvest slime release. The Phase II research and development effort will examine options to improve the production protocols and nutritional value of Hawaii-grown pongee, to develop humane slaughter procedures, to develop and assess alternative processing options and products, to conduct sensory evaluations to refine processing procedures, and to develop, test, and evaluate packaging, logo, and branding options appropriate to specific premium pongee products for carefully identified markets. These research and development efforts will support HFC's Phase III commercialization plans to produce and market Hawaii-grown pongee to Honolulu's Asian seafood "niche markets" and fine-dining restaurants, to Hawaii's large visitor market, and, in the future, to similar domestic and regional export markets.

Animal Health Component

100%

Research Effort Categories

Basic

(N/A)

Applied

100%

Developmental

(N/A)

Classification

Knowledge Area (KA)	Subject of Investigation (SOI)	Field of Science (FOS)	Percent
308	3719	1060	40%
502	6220	3090	30%
604	3719	3010	30%

Knowledge Area
308 - Improved Animal Products (Before Harvest); 604 - Marketing and Distribution Practices; 502 - New and Improved Food Products;

Subject Of Investigation
3719 - Other cultured finfish; 6220 - Marketing, processing, and supply firms other than cooperatives;

Field Of Science
1060 - Biology (whole systems); 3090 - Sensory science (human senses); 3010 - Economics;

Keywords

channa striatus

aquaculture

electrosedation

fatty-acids

marketing

retort packaging

tank color

Goals / Objectives
Major Goal: The major goal of this Phase II research and development project isto answer the technical questions necessary to produce, process, market, and trade premium quality fresh, frozen, and value-added Hawaiian pongee products to local, visitor, and export markets. The objectives are presented in a production sequence from pond to market. The data generated from the research and development trials will strongly support Phase III commercialization. Objective 1. Increase production and fish quality through manipulation of size grading processes, tank color, finishing diet, hybridization, and co-culture. The purpose of this objective is facilitate HFC's goal of the production of the highest quality pongee in terms of appearance, taste, texture, and human nutritional value, in the most efficient and economic manner possible, within the reality of Hawaii's production cost structure, so as to have a premium product available at an affordable price and at a consistent and predictable level of supply, to support planned commercialization of processed Hawaiian pongee seafood products. Objective 2. Determine species-specific electrosedation and humane slaughter protocols to improve fish handling, fish welfare, and fish quality. Growing consumer concern about animal welfare in food production processis becoming an increasingly important consideration for the agricultural community. This objective focuses on utilizing the latest in electrosedation and electroeuthenasia technology to determine the most appropriate electrical parameters and protocols to sedate and handle sensitive brood stock and to gently and humanely harvest and slaughter market-sized fish so as to preserve optimum product quality and value. Objective 3. Determine best processing options, value-added products, and packaging confirmed by sensory and product evaluations. Seafood marketing trends indicate that, while the American consumer is purchasing increased amounts of seafood, they are also seeking food purchases that are safe, wholesome, convenient, and adventurous. Among these exciting trends, interest in trying new foods is particularly important. This objective will seek to take advantage of this trend by developing and consumer-testing innovative, value-added products for the marketing and sale of Hawaiian pongee. Objective 4. Determine appropriate product branding, agribusiness planning, commercialization, and market entry strategies. The U.S. seafood market is a sophisticated and competitive marketplace in which HFC will have to compete for the consumer's seafood dollar. Furthermore, increased foreign competition is anticipated in this market in the years ahead. HFC's goal with this objective is to research and develop an appropriate product name, brand name, image, logo, and associated packaging and labeling for the products developed in Objective 3., and to carefully plan the various business, marketing, and commercialization aspects of this effort so as to be positioned and fully prepared to pursue Phase III commercialization with non-SBIR resources and to effectively establish brand recognition as a new, Hawaii-grown, premium-quality, gourmet seafood product.

Project Methods
The scientific methods and/or related ways in which the project will be conducted, the analysis and evaluation of research data, the efforts that will be used to cause a change in knowledge or actions of a target audience, and how the output(s) will be evaluatedvaryaccording tothe specific project objective. The first objective, addressingsize grading, tank color, finishing diet, hybridization, andco-culture of Hawaiian pongee, will involve a series of rigorous replicated field trials conducted by HFCresearch personnel, and the resultswill be statistically analyzed, evaluated, and used to direct HFC's future pongee production protocols. The second objective, addressing electrosedation andhumane slaughter, will also involve a series of rigorous trials at HFC, conducted by techniclal experts from SmithRoot Inc., and again the results will be statistically analyzed, evaluated, and used to direct HFC's future pongee handling andhumane slaughter protocols. The third objective, addressing product development, sensory evaluations, and follow-onmarket testing, will combine both cullinary art and science and involveproduct developmentexperts from the Oregon Sea Grant Extension, Seafood Lab, Astoria, Oregon, to develop and produce innovative vacuume packed, shelf stable, and ready-to-eat pongee products,and sensory evaluation experts from the Oregon State University, Food Innovation Center, Portland, to test these products with rigorous sensory evaluations in Hawaii. These products will be reformulated, as indicated by the test results, and thenmarket testedat selected markets in Hawaii toprovide an initial measure ofproduct acceptance. The results will beused to guide HFC's future pongee processing protocols. The fourth objective, addressing branding, packaging, marketing, agribusiness planning, and commercialization will again combine art and scienceto conceptualize appropriate naming, logo,branding, packaging, and labeling, with the assistance of experts from Wall-to-Wall Studios, Honolulu,to test and evaluate initialconsumer response to branding and packaging, in coordination with the sensory evaluations in Objective 3, to make adjustments to branding and/or packaging as indicated by these initialtest results, and to market test with reformulated products from Objective 3. The results of the initial consumer responses and markettests, along with the agribusiness planning with experts from the University of Hawaii, Agribusiness Incubator Program,and the commercialization planning with experts from the Larta Institute, will provide HFC the marketing and business and commercialization plannning information toformulateappropriate market entry strategiesandlay the groundwork for thesuccessful Phase III commercialization of Hawaiian pongee as a premium gormet seafood product from Hawaii.

Progress 09/01/14 to 08/31/19

Outputs
Target Audience:The target audience reached by our efforts during this reporting period were our collaborating team members, a Honolulu Chinatown seafood market, a Honolulu fusion cuisine restaurant, and a Texas-based Asian American restaurant group. Changes/Problems:The overall approach remained as proposed and the overall goal of each objective was successfully met. Specific research details were adjusted as necessary and no-cost extensions of time were requested and approved to accommodate changing research, vendor, and market conditions, most notably the unanticipated challenges and delays associated with retort canning which resulted in the back-up and delay of related elements of the overall planned Phase II research effort and the continuation of some noted elements into Phase III. HFC's Phase III commercialization efforts have been impacted by the ongoing Covid-19 pandemic and its overwhelming efects on the domestic and global food system and food service. We will reassess our commercialization options when the market reaches a "new normal" and determine the best pathway(s) forward to successful commercialization. What opportunities for training and professional development has the project provided?The project provided an opportunity for culinary student participation in the development of commercial product recipes based on fresh ingredient high-end restaurant recipes ro facilitate the development of packaged frozen ready-to-cook pongee meal preparations. How have the results been disseminated to communities of interest? Nothing Reported What do you plan to do during the next reporting period to accomplish the goals? Nothing Reported

Impacts
What was accomplished under these goals? Objective 1 research was conducted at HFC by the HFC team over the entire Phase II research period. Portions of this research continue under Phase III commercialization, supported by a Hawaii SBIR Phase II/III Matching Grant. Size grading is critical in Hawaiian Pongee culture due to cannibalism, especially during the hatchery and nursery phases of production. Three manual graders were tested for ease of operation and effectiveness. The high costs of an automated grader and fish pump were determined to not be justified at this time. Research efforts were redirected towards the design and fabrication of rolling grader bars on hatchery and nursery raceways for passive grading, to be less damaging to the fry and fingerlings than basket and box graders. The effect of tank color during grow-out on Pongee quality was assessed using black (control), brown, green, and blue tanks. Differences in skin color and patterning were noted but HFC's research team and chefs did not note significant differences in product taste or texture between treatments. The planned growth and finishing diet trials in the colored tanks, comparing fatty-acid profiles, were delayed while the University of Hawaii laboratory facilities underwent renovation. This work has now been completed and these trials will now be conducted under Phase III. Our hybridization trials were not able to be conducted due to the collapse of State's wild Blotched Snakehead stocks from overfishing and unsuccessful recruitment due to habitat loss and predation. We will continue to pursue this option in Phase III, if any remnant stocks are located by the Division of Aquatic Resources, and HFC will also apply for a USFWS special import permit for research purposes. Co-culture was evaluated as a potential means to control filamentous algae growth in culture tanks but 30% shade cloth tank covers and maintenance of green water was determined to be a more manageable control strategy. Objective 2 research was conducted at HFC in collaboration with Smith-Root, Inc. of Vancouver, WA, a world leader in electro-fishing technologies. The goal of this research was to determine the best voltage, frequency, and exposure parameters for the immobilization of potential broodstock for gamete assessment and the humane slaughter of market-size Pongee, as viable alternatives to traditional chemical sedation and manual slaughter practices. A Portable Electroanesthesia System with 24-volt battery pack was used to test and evaluate the effectiveness of six electrical settings of ramped direct current (RDC) and pulsed direct current (PDC) waveforms, and a dual waveform with low electrical power followed by increased output power for Pongee sedation. The control was Tricaine-S (MS-222). A setting of 40 volts PDC for 30 seconds provided the best result, with immediate induction and full recovery in approximately three minutes, allowing sufficient time for broodstock handling without harm to the fish. An integrated APEX electrofisher powered by a 9000-watt single-phase generator was used to test and evaluate four different electrical settings with direct current (DC) and PDC for Pongee euthanasia. All settings incorporated a two-stage or dual waveform mode. A 20 second exposure to a 0.94 V/cm electrical gradient with DC followed by 100 seconds of exposure to 4.22 V/cm with PDC and prompt placement in an ice slurry was found to provide immediate insensibility (less than 1 sec) and 100% mortality, i.e., humane harvest with no loss of flesh quality. Objective 3 research was initially focused on retort assessments for traditional canning and use of flexible foil pouches. Unfortunately, the Pongee flesh did not hold-up to the harsh retort time and temperature requirements prescribed by FDA for fish, and the bones hardened rather than softening. Pre-retort brining and smoking was researched to stabilize the Pongee protein and improve retort flesh quality but fell short of the premium quality of fresh and frozen Pongee. Given these results and evolving consumer and market trends, we pivoted our research efforts to developing retail ready-to-cook Pongee meals with gourmet preparations, partnering with James Beard Award-winning Chef Alan Wong of Honolulu. This effort culminated with a consumer and sensory evaluation study at Alan Wong's Restaurant conducted by the Food Innovation Center, Oregon State University, Portland, to measure the acceptability and market potential of three preparations created and prepared by the kitchen of Chef Alan Wong. Concurrently, we explored fresh and frozen Pongee processing and transportation options and costs for domestic exports, with interest and input from a mainland-based Asian American restaurant group. Objective 4 research focused on determining target market and demographics, optimum product and packaging forms, branding, and market entry strategies. This work was conducted in collaboration with Chef Alan Wong and his business team, Osaki Design Group of Berkley, CA, and Honolulu, and the Culinary Innovation Center, Kapiolani Community College, Honolulu. Market assessment research indicated an initial focus on the Honolulu market and a product focus on frozen Pongee meals with gourmet preparations to be marketed under a joint brand of Chef Alan Wong and HFC. Scaled production is planned to support national sales and distribution. Subsequent Phase II research and ongoing Phase III commercialization efforts focused on product naming, branding, positioning, tagline, color pallet, logo design, price point, packaging form, servings per package, packaging artwork, and scaling of gourmet preparations from restaurant recipes using fresh ingredients to commercial-scale formulations for mass production while remaining as close as possible to the original flavors and spiciness (heat) of the original recipes. The Phase III efforts have been constrained by the current Covid-19 pandemic impacts but are moving forward.

Publications

Progress 09/01/17 to 08/31/18

Outputs
Target Audience:The target audience reached by our efforts during this reporting period were limited to our collaborating team members, an Asian sea seafood market and fuision cuisine restaurant in Honolulu, and a potential Asian exporter. Changes/Problems:The retort canning issues previously described have been problematic but pre-treatment options are encouraging. These unexpeced retort problems and resolution efforts havestalled the other interrelated objectives. HFC will reach a go, no-go decision point in the next few months regarding the feasibility of retort canning for Pongee. Depending on this decision, the emphasis may shift more or completely to fresh, smoked,refrigerated, and frozen product developement and packaging. What opportunities for training and professional development has the project provided? Nothing Reported How have the results been disseminated to communities of interest? Nothing Reported What do you plan to do during the next reporting period to accomplish the goals?We are currently refining our brining and smoking protocolsto maximize product quality, as noted above.Based on the results of this effort over the next few months, we will decide whether to continue with retort product development or focus entirely on fresh and frozen read-to-cook meal portions, refrigerated smokedproducts, healthy snack products, and associated branding, artwork, consumer evaluations, production protocols including grading options and hybridization, and post harvesthandling.

Impacts
What was accomplished under these goals? Objectives 3 and 4 continued to receive the most attention during the current reporting period. Two of our three originally planned value-added processing options are dependent on successful retort canning in traditional cans or canning jars or in flexible retort pouches. Problems withPongee texture resulted from retort canning according to FDA requirements, so the research has been focused on brining and smoking as potential pre-treatments to prepare the flesh for the harsh retort canning process. The results to date have been encouraging and we are currently refining our brining and smoking protocolsto maximize product quality. In the mean time, the sequenced research process from Objectives 1, 2, and 4 that were planned to supply fresh Pongee or to utilize retorted Pongeeproducts provided by these research efforts were held back. Fortunately, our market research continued and additional or alternate product options were confirmed or identifiedin the expanding ready-to-cook and healthy snack markets.

Publications

Progress 09/01/16 to 08/31/17

Outputs
Target Audience:The target audience reached by our efforts during this reporting period were limited to our collaborating team members, Asian seafood markets in Honolulu, and a potential exporter to China. Changes/Problems:The problems regarding the degradation of Pongee tissue during retort canning will be addressed under the existing product development protocolsover the next year but willnot require a major change in approach, just exploration and testing of potential pre-retort brining and smoking processes to help stabilize the fish proteinso as tohelp maintain the natural firm texture of the fish during the harsh retoring process. However, in order to do so, Hawaii Fish Company is requesting a second 12-month no-cost extension of time to address the retort texture degradation issue and to complete the remaining objectives held-up over the past year by this current issue. What opportunities for training and professional development has the project provided? Nothing Reported How have the results been disseminated to communities of interest? Nothing Reported What do you plan to do during the next reporting period to accomplish the goals?For the retort canningand Pongee texture degradation issue, the project will explore pre-retort preparation options such as brininng with salt or salt and sugar and then smoking as potential means to firm the tissues and stabilize the proteins prior to exposure to the harsh retort canningprocess. We will also place added emphasis on potential refrigerated vacuum-sealed product development, exploration and testing of potential healthy snacks, and long-distance live shipment packaging and protocols for potential foreign markets.

Impacts
What was accomplished under these goals? Objectives 3 and 4 received the most attention during the current reporting period. Two of our three processing options are dependent on successful retort canning in traditional cans or flexible pouches. Unfortunately, the retort pasteurization temperature and cooking time required by FDA and used toretort cannedalbacore tunaand salmon resulted in the degradedation ofthe Pongee texture. Aresolution of this issue became the top priority as several of our planned product development options rely on this shelf stable process. To address this current issue, pre-retorting treatments of brining and smoking are being tested. In the mean time, many other parts ofour planned and sequenced research processfrom Objectives 1, 2, and 4, that were planned to supplyfresh Pngeeto or utilize retorted products provided by these efforts, wereheld-up. While the retort issue has held-up many of the planned experimental trials, the market research of Objective 4 has continued and is essential in this rapidly evolving seafood market space. Trends of particular interest to this project, especially if the retorting efforts continue to be problematic forthis fish,are: 1)the increasing market demand for refrigerated, vacuum-sealed, ready-to-eat meals; and 2) the increasing market demand for healthy snacks, including seafood snacks such as fish jerky. These options will be carefully researched in the coming year as we also work to resolve the current retort canning issue.

Publications

Progress 09/01/15 to 08/31/16

Outputs
Target Audience: The target audience reached by our efforts during this reporting period was limited to Asian seafood markets in Hawaii. Changes/Problems: While the research team has made important progress onseveral research objectives, a 12-month no-cost extension of time has been requested to enable HFC complete all project objectives so as to support successful Phase III commercialization. What opportunities for training and professional development has the project provided? The PD/PI participated in a Safe Quality Foods certification workshop in Honolulu, along with a major Honolulu seafood processor. This was avery timely and beneficial training and professional development opportunity for the HFC owners. How have the results been disseminated to communities of interest? Nothing Reported What do you plan to do during the next reporting period to accomplish the goals? Pongee spawning is again anticipated within the next few weeks which will enable the Hawaii team to move forward on Objective 1. Email exchanges with the Smith Root team members will lead to the scheduling of the planned Objective 2 electrosedation trials during the next reporting period, tentativelyplanned forearly 2017 in coordination with product development for test marketing. The Pongee currently in production are now of the market size needed for the Objective 3 value-added product development, to begin in September 2016,followed byconsumer sensory evaluation efforts in Portland and Honolulu during the next reporting period. Objective 4 efforts on product branding will also be initiated during the next reporting period, once the product development trials confirm the product types with the greatest market potential to move forward with, as willagribusiness and market entry strategy planning for Phase III commercialization.

Impacts
What was accomplished under these goals? Objective 1. The research team has undertaken selected Phase II research efforts to answer technical questions related to the economic production of juvenile, adult, and broodstock Pongee, and to test market Pongee in the Honolulu marketplace. The taste and texture of marketed product have been well received. Pongee growth rates have been variable and the root causes of this variation are continuing to be investigated. Objective 2. The electrosedation and electroeuthenasia technology continues to be refined by the research partner Smith-Root Inc. in both North American and European trials prior to planned work with Pongee. A preliminary on-site visit was conducted by a member of the Smith-Root technical team, and preliminary electrosedation trials indicated the need to refine trial protocols to address the higher electrical parameters needed to effect electrosedation. Objective 3. ThePD/PI has continued planning efforts withthe Oregon State University research team members in Portland and Astoria, OR, to refine the research plan and strategize on the most appropriate value-added Pongee products and consumer testing protocols. The Pongee have now reached sufficient size to proceed with the planned product development efforts now scheduled to begin in thesecond half of September 2016, followed by sensory evaluations in Portland and Honolulu. Objective 4. The Hawaii research team has continuedto assess the current seafood market trends and potentially competitive products, and to assess packaging, branding, and logos, so as to refine the planned branding efforts which are scheduled to follow initial product development. A seafoodexporter with offices in Honolulu and China has indicated strong interest in HFC's Pongee products. HFC has refined its product "story" which will be an important consideration in the planned branding effort. The Hawaii team members have initiated agribusiness planning discussions with the University of Hawaii, Agribusiness Development Program team members.

Publications

Progress 09/01/14 to 08/31/15

Outputs
Target Audience:The target audience reached by our efforts during this reporting period was limited to Asian seafood markets in Hawaii and Oregon, and Asian restaurantsand visitor gift shops in Hawaii. Changes/Problems:While the research team is making progress on all research objectives, and major accomplishments are anticipated during the next reporting period, a no-cost extension of time may be required to complete all project objectives so as to lead to successful commercialization. A progressassessment will be madeseveral monthsprior tothe end of the next reporting period, and, if appropriate, a formal request for a no cost extension of time will be submitted. What opportunities for training and professional development has the project provided?The Hawaii team members participated in the University of Delaware Sea Grant / Oregon State University Sea Grant training and professional development workshop entitled Aquaculture and Seafood Technology 101at the OSU Seafood Laboratory in Astoria, OR,to gain a better understanding of the opportunities and technologies currently available in seafood processing. This was a very timely and beneficial training and professional development opportunity forthe Hawaiiteam members. How have the results been disseminated to communities of interest? Nothing Reported What do you plan to do during the next reporting period to accomplish the goals?Pongee spawning is anticipated within the next few weekswhich willenable the Hawaii team to move forward on Objective 1. The scheduled meeting with a Smith-Root Inc. biologist later this month, as well asongoing email exchanges and calls with other Smith Root team members, will lead to the scheduling of the planned Objective 2 electrosedation and electroeuththenasia trials during the next reporting period, afterpossible refinementaccording to the latest technologoical advancements by Smith Root Inc. The pongee currently in production are nearing the market size needed for theObjective 3 value-added product development and consumer testing efforts during the next reporting period.Objective 4 efforts on product branding will be initiatedduring the next reporting period, andagribusiness planning and commercialization and market entry strategy planning work will continue.

Impacts
What was accomplished under these goals? Objective 1. The research team has undertaken initial Phase II researchefforts to answer technical questions related to the economic production of juvenile, adult, and broodstock pongee, and to test market pongee in the Honolulu marketplace. The taste and texture of marketed product have been well received. Pongee growth rates have been variable and the root causes of this variation are continuing to be investigated. Objective 2. The electrosedation and electroeuthenasia technology continues to be refined by the research partnerSmith-Root Inc.in both North American and Europeantrials prior to planned work with pongee.A preliminaryon-site visitby a member ofthe Smith-Root technical team is scheduled for later this month tobecome familiarized with pongee and to refine trial protocols. Objective 3. The Hawaii research team met with the Oregan State University research team members in Portland and Astoria, OR, and also with a contract processor, to refine the research plan and strategize on the most appropriate value-added pongee products and consumer testing protocols once the pongeehave reachedsufficient size for the planned product development efforts. Objective 4. The Hawaii research team attended the North American Seafood Expo in Boston to assess thecurrent seafood market trends and potentially competitive products, and to assess packaging, branding, and logos that were resonating with those in attendance, so as to refine the planned branding efforts which are scheduled to follow initial product development. HFC has refined its product "story" which will be an important consideration in the planned branding effort. The Hawaii team members have initiated agribusiness planning discussions with the University of Hawaii, Agribusiness Development Program team members, and also completed the requirements of the Commercialization Training Workshop in Washington DC and the Commercialization Strategy Report, with the assistance of the Larta Institute and our company's assigned Larta Commercialization Adviser.

Publications