How Humpty Doo Barramundi went from a couple of ponds to becoming Australia's largest producer

From modest beginnings in 1993, the family behind Humpty Doo Barramundi overcame setbacks and compounded their breakthroughs to build an operation that now accounts for roughly half of all domestically-farmed barramundi, in a market where the majority of supply is imported.

Bob's son Dan Richards was still a teenager when the project began and is now CEO of the company, which remains family owned with its product found in supermarkets and restaurants all over the country, as well as through a budding export program to markets like Singapore and the USA.

After the company secured a nationwide roll-out last month through Australia's largest fresh sushi retailer Sushi Izu, Dan told Business News Australia about his passion for fish, his community and environmental stewardship.

Before we discuss what it took to make Humpty Doo Barramundi what it is today, would you be able to tell us more about its origins? What were your earliest memories of barramundi farming?

Sure. The farm has been running since 1993 and actually my wife’s family were founding shareholders, but within a year one of the three founding shareholders realised it was going to take longer and cost more to make a buck than the spreadsheet had suggested. So they wanted out and they invited us to come and have a look, because my dad was working in environmental regulation at the time but had a background in agri-science.

We were mad passionate about fish. My kids are fifth generation Territorians so we’re long-time Territory people. We’d spend our weekends catching fish, cooking fish, sharing fish, thinking about how fish think. So it was great to have the opportunity to get involved in a fledgling barramundi farm enterprise when the industry was really starting out.

What we discovered subsequently is that in pioneering your dreams get washed with tears regularly, but we learnt so much and it’s certainly been an exciting journey.

So your dad took a shareholding in 1994. How old were you then?

I was 16. At the time it was operating out of two puddles and a humpy on the edge of a big crocodile-infested river halfway between Darwin and Kakadu National Park – really wild country. The road stopped half a kilometre before the farm itself, so you had to carry jerry cans of diesel the last half-kilometre through knee-deep mud to keep the system running, to run the generator.

It was very primitive, but we were in love because there were barramundi in those puddles.

At the outset the margins looked pretty good, if only we could work out how to do it. The feed was relatively cheap and the fish was relatively expensive. Over time, as the industry has matured, those margins have slimmed right down which is normal and natural, but certainly we saw an opportunity there to make a start because it’s really difficult to get started in a fledgling industry, and it's nearly impossible to get established in a mature one.

How did it work logistically at that stage?

We started off with just 6kg of fish a week. We would swim across the pond with a small piece of net and stand there in chest-deep water size-grading them. Then we would chill them down and bring them back to Darwin, and prepare them in the backyard and drop them off to some of Darwin's fanciest restaurants.

My dad’s a real visionary, incredibly optimistic. I always say he's got over-the-horizon radar the way that he looks at things about where potential opportunities and problems are. Apart from our love of fish, for us it was about the excitement of the adventure, and it certainly has delivered that in spades over the three decades.

I can only imagine. Was there a particular moment when the business started to ramp up from just supplying Darwin restaurants to scaling up more significantly? 

It’s been a journey of compounding. I joined the business in 2007 - 13 years later - and the business remained very small at that point. We were doing about 4 tonnes a week, but dad started the business with a Maslow’s hierarchy of needs, having seen a lot of failed large scale agricultural ventures in the north.

We had some underlying key principles and philosophies which still hold true today, around surviving the learning journey and the challenges, investing very heavily in learning to develop a world-leading system, and then applying those lessons to enable us to grow. There was no particular day where we solved everything - it's been a long journey of a thousand steps.

We’ve moved from purely being in survival to now looking at how we use our business as a force for good in our in our Territory economy. How do we use this business to do good things in our Indigenous community, with our young people? How do we lead the way to supply sustainably produced, ethically produced animals to the Australian market and beyond?

Would you be able to elaborate on what it means to have ethically produced barramundi?

We’ve got an animal which is growing where it comes from. We're in the spiritual home of barramundi in the Northern Territory, which is a natural advantage - they're adapted to this warm water here, they've evolved alongside crocodiles in these waterways. We're growing the fish in salt water, so that means they've got a consistent saltwater flavour. That gives those marine tones to the fish, which is important for the Australian market.

My dad did a Churchill Fellowship in 2002, and off the back of that delivered a unique saltwater wetland system that enables us to reuse the water again and again and again. We release significantly less than 1 per cent of the nutrients that the fish produce through the growing phase, which contrasts with other operations. If you’ve got a sea cage, it’s 10 seconds between a fish going to the toilet and it being in the outside environment. If you've got a flow through farm that's discharging into the Great Barrier Reef, that's going to be out in that environment quickly.

Whereas we've taken responsibility for our fish and the impacts that they create, and we deal with that in-house through the creation of this wetland; we’ve created this saltwater habitat which relies on the nutrients from those fish. We have a saying, if it’s not comprehensively resolved, it’s not comprehensively resolved. 

It means we have to use very minimal interventions with the fish. Our low-level mortalities are probably not achieved by any anybody else. There’s virtually no use of antibiotics in the production system. Animal welfare is at the front.

Our mission is to responsibly produce beautiful Australian barramundi while demonstrating our genuine care and commitment to our people, our fish, our environment and our partners. So our people means both our internal team as well as our community. Our fish is about animal welfare and ensuring that they have the best life they can right through. Our environment is about stewardship of natural resources, and then our partners are everyone from our financiers to our market partners and everyone in between.

We hold ourselves and everybody in our organisation equally accountable to delivering that.

You've mentioned that co-evolution with crocodiles. What's your approach to co-habitation with them and preventing crocs from getting to the fish?

We have a crocodile management plan, and we have a fence around the outside. We have detection and capture protocols so if a crocodile does get into the farm, we can catch it and remove it. We have a relationship with a local crocodile park who we take those crocodiles to. We can’t release them because they then know that’s a really good place to eat and you’ll never catch them again.

There’s around 150,000 crocodiles in the Northern Territory, and that’s a great story of recovery from near the brink. If we go back to the 1960s, crocodiles were hunted to near extinction, and now there's hundreds of thousands of them. The challenge is for the population. Here in the Territory, just because your parents were able to swim in that spot doesn't mean that you're still able to, because of that tremendous recovery story. It's a reality of living up here.

And what about the number of barramundi in your ponds?

Across our whole business we’ve probably got about five million barramundi in the works, all the way through from microscopic babies through to large fish that are ready to be harvested tomorrow. It’s a big population of animals and it's a big job – we’re 24/7 operations, we've got people that are caring for those animals day and night.

How many people do you need for an operation like that?

We’ve got about 150 people, so we’ve grown from just volunteers and family to a professional organisation with everything from electricians and mechanics, fish whisperers, hatchery specialists, fish help people, the whole shebang, right through to sales professionals in the market. We’ve grown something from a backyard operation into an iconic Australian brand. We've become the largest Australian-owned fish producer, on the site of what was the Humpty Doo Rice Project, a failed agricultural venture from the 1950s. We converted those rice paddies into fish farms.

Not only that but now you're achieving sashimi-grade production. What kind of cold storage and post-harvest operations do you have in place to make that work?

We've got a great operation. We've got everything from our nursery through to our packing and dispatch and chilling all on site, so it’s all quite easy to share resources across the team to be able to help each other. We make more ice than Darwin makes to enable us to chill that fish.

We’ve always got that ability when we're pulling those fish out of the water to get them to optimum temperature in super time. We've got our own proprietary systems that get them cold really fast, and that enables us to maintain the highest quality fish and the tastiest fish. So they're naturally silver in the environment that they live in at our farm, which is presented beautifully, but then we're able to get the fish all around the country and even now overseas in that same condition.

We’re in the Australia Pavilion at World Expo Osaka, so Australia's chosen Humpty Doo Barramundi to be its iconic fish in Japan on the world stage, and Qantas Business Class has our fish on outbound flights from Australia.

Obviously, Sushi Izu, Australia’s largest sushi chain that’s owned by the world’s largest sushi chain, has rolled our product out nationally. They started at one store in December last year, then went to Queensland and rolled out in March, and in June they rolled out nationally. Sushi and sashimi are recognised for being the highest quality product.

What's your split currently between foodservice and retail sales?

It’s roughly half-half. We like to have a diversified market, and similarly with increasing interest in the export product we like to service the demand but also ensure we're spreading our risk.

When it comes to export we are targeting discerning, ethical buyers and consumers. We've got product going to Singapore and Hong Kong, and now increasingly in the USA as well. It's a big market over there, and there are are discerning buyers at that top end who are really willing to give an ethically produced, quality Australian story product a go.

You mentioned earlier that Humpty Doo Barramundi's growth has been a compounding story, but are there any particular moments that stand out, that made it easier to generate the cashflow necessary for you to expand?

When I finished uni there was no economic opportunity. The business was too small to be able to afford to pay, so I spent a decade in another industry in environmental management. When I joined the business full-time there were four of us and we were doing four tonnes of fish a week. We weren’t vertically integrated, and so the business has grown just by resolving those issues, just by removing the thing that's stopping it from moving forward.

For decades we delivered about 30 per cent year-on-year growth, but those numbers get bigger over time.

There have been many things, whether it was setting up our own national packing and distribution operation, setting up our own breeding program with CSIRO so that we're selecting the best fish for our environment, or picking up the national retail contracts, they’ve all added to making the business more robust.

And there's the development of the brand, which we're continuing to invest in, because there's always been cheaper protein. But what we offer is about quality and ethically produced food, and something that’s quite different.

How does the everyday consumer know if they're buying your barramundi?

For the last reporting year we produced just a little over half the barramundi produced in Australia. But it's also worth noting that up to two thirds of the barramundi which are sold in in Australia remain imported. The Federal Government's just passed the legislation for mandatory country of origin labelling in foodservice, so if you're buying Australian barramundi, there's a 50-50 chance it's mine. If you go to Woolies, the fresh behind the glass is mine, although it's not branded, and we've got branded products in the packaged seafood and in the freezer there. 

It's remarkable that you've been able to achieve this while still being a family-owned company, without needing to take on private equity investments.

Look, it has been a conscious choice. It's not that we haven't had the calls regularly enough, but we are a values-based organisation. For me, I've got no interest in compromising on our values and our mission. If you've got people who just want to rip the guts out of things and get out again in five minutes, that's not really what we're about. It hasn’t stopped us from growing, but it’s enabled us to be true to what our mission and goals are. We invest very heavily in our people and development of our culture.

We've got a program we run with our local school. We’ve brought 16 kids through, and three years later 14 of them are still with us full-time. We’re proud of investing in our community, and then we’re also working with a remote Aboriginal community at Wadeye to try to support them to develop their own enterprises. This is important work and it's not something I'm willing to compromise.

Finally, between the export opportunities and your deal with Izu Sushi, do you actually have more land in which to grow? Is there space to expand your wetlands?

We certainly have the ability to more than double the size of the operation. What's really limiting the business right now is profitable markets. We've had tremendous growth over time. There's been a bit of a slowdown the last few years with the cheap protein piece, so we've recognised that and we're addressing that. When the time is right we'll be able to continue growing, but we want to make sure it's a sustainable business so we're not rushing into unprofitable growth.

I think it's important to keep it real. There's nothing like farming fish out amongst the crocodiles to keep it real.