A Business Point of View

Cooke Inc. is a Seafood Juggernaut

Not many people know much about Cooke Aquaculture, a company established by Glenn Cooke and his family in Black’s Harbour in 1985. The company started with two ocean cages and 5,000 salmon. Since its founding, Cooke Aquaculture has grown to become the fifth largest salmon farming company in the world and its parent company, Cooke Inc, is the largest seafood company that is privately owned. Last year, the company produced between 35-40 million salmon along with other species, including oysters, scallops, sea bass and shrimp. The company is involved in both fish farming and the wild fishery. In total, the company produced or harvested 60 million finfish in the past year.

With its recent purchase of Peru’s largest fishing company Copeinca, Cooke now has more than 15,000 employees, of which about 2,500 are employed in Atlantic Canada, and now operates in fifteen countries. It is noteworthy that these are year-round jobs, not seasonal, and most of these jobs are located in mainly rural coastal communities, thus providing a strong boost to the local economies in these communities.

In a region where most people think that Clearwater is the largest seafood company, it will be surprising for many to learn that Cooke is more than six times bigger, on a revenue basis, than Clearwater is today. Prior to the Copeinca acquisition, revenue for Cooke was more than $4 billion, making it one of the largest and most important companies in Atlantic Canada. Those revenues also support 250 head office jobs in Saint John, New Brunswick. In 2023, the company was named one of Canada’s Best Managed Companies for the 18^th consecutive year and Glenn Cooke was recently inducted into the Atlantic Canada Marine Industry Hall of Fame under the processor category.

Growth through Acquisition

Cooke’s rapid growth has been driven by an aggressive acquisition strategy. Since 2016, the company has made 15 acquisitions with a value of $2.5 billion. As a result, Cooke now has become a global company with operations in fourteen countries. Prior to its most recent acquisition, Cooke’s biggest acquisition to date (in November 2022) was the Tassal Group in Australia that was worth more than a billion dollars alone. Of note, in 2022, Cooke invested in Ganong, Canada’s oldest candy and chocolate company, stepping outside the seafood sector for the first time.

Vertical Integration

Interestingly, Glenn Cooke worked briefly for the Irving family in the early seventies. The Irvings are well known for their vertical integration strategy. Whether influenced by the Irvings or not, Cooke has pursued the same vertical integration strategy. The company has its own hatcheries, feed production facilities, and utilizes a fleet of 800 vessels to harvest its fish. It has 30 processing plants around the world to process their products and its own transportation companies to deliver its products to market. The company also has its own research and development department to grow healthy and sustainable fish products, including a geneticist to help improve the fish species it produces. Glenn Cooke, in a recent Insights Podcast, underscored the scientific approach that his company takes to produce fish without the hormones or antibotics being used by the beef industry.

The Challenges of Regulation

Salmon farming alone in Atlantic Canada accounts for $2 billion of economic output and supports 8,000 jobs. Cooke is quick to point out the opportunity for the aquaculture industry across Atlantic Canada with its extensive access to the seacoast, while at the same time lamenting the difficult regulatory approval process that can take years. He cited the regulatory process in Nova Scotia as being the most difficult of any jurisdiction where the company currently operates. Cooke is looking for the province to streamline its scoping and application review process for the establishment of new aquaculture sites. Indeed, looking at the outstanding projects waiting to be approved in Nova Scotia, many are still waiting more than five years after their application was submitted for approval. This may help explain why the growth of the aquaculture sector has been so slow across the region. Cooke points out in our recent conversation the example of Norway which is a world leader in this sector. Each year Norway announces pre-approved sites for aquaculture that companies can then bid on in an open competition.

The regulatory environment continues to be an issue for many sectors of the economy, especially those resource based. The need for a timely, well-defined, and understood regulatory process is well established. It is leading companies like Cooke to invest elsewhere in the world. As Glenn Cooke states, “we intend to invest in Atlantic Canada. However, there has been very modest aquaculture growth in Nova Scotia for several years due to regulatory red tape”.

Global Need for Protein

There is a movement across the world for healthier, protein-based diets. Indeed, the UN’s Food & Agriculture Organization recent “Blue Transformation” report calls for growth of 35 percent in global sustainable aquaculture by 2030 to address one of its key goals, the eradication of hunger, food insecurity and malnutrition. At the same time, there are growing concerns related to overfishing of the world’s oceans that are real. We only have to look at the collapse of the cod stocks in our own region which happened more than thirty years ago and have yet to fully recover. The only reliable long-term source of fish products is through aquaculture. The demand for fish farmed products is only expected to grow with the expectation that the sector will double in size by 2050.

Environmental Concerns

Aquaculture is an industry that relies on the public support and the social license needed to conduct its operations and the industry has come under scrutiny of its operations.

There are legitimate concerns about the impact of aquaculture on the environment, primarily related to pollution caused by the waste produced by ocean-based fish farms. Locating fish farms in areas where the sites are naturally cleaned is paramount. There are also opportunities to locate fish farms further offshore. Concerns related to disease, especially related to lice infestation are also real. Of interest, Cooke has begun to employ lump fish to naturally delice its farmed salmon, replicating what happens in the natural environment. Cooke employs the use of the latest technologies to monitor their fish farms and manage their feed operations, including the use of robots to clean and repair their fish cages. Cooke also employs Third Party Certification Programs, including the 4-Star BAP (Best Aquaculture Practices) to ensure adherence to the highest environmental practices.

Cooke is quick to point out that aquaculture is one of the healthiest and most efficient methods to feed the population with the lowest freshwater use and the lowest carbon footprint of any animal protein. The company prides itself on its scientific approach to the management of its fish, including the use of PHD level geneticists to develop more disease resistant and faster growing fish species.

Looking Ahead

There is little doubt that Cooke is an ambitious company, on a scale rarely seen in our region. When asked about the next goal for the company, Glenn Cooke simply stated that there were still a few companies ahead of his globally, indicating that growth continues to be the company’s primary goal. The importance of the success of a company like Cooke cannot be overstated as a role model for other ambitious companies in Atlantic Canada.

Don Mills is a regular columnist, the co-founder and former owner of Corporate Research Associates Inc. (now Narrative Research), an active advocate for change and involved as a partner with several private companies. He is also the co-host of the weekly Insights Podcast.