Australia’s Oyster Coast: Australia’s largest producer, processor and distributor of Sydney Rock Oysters

John Murphy: Devin, thanks for hosting us at the beautiful Wapengo this morning. Could you please give us an overview of Australia's Oyster Coast and it's journey to become the largest rock oyster producer in the country?

Devin Watson: Absolutely, John.

It's a little bit fresh today, but you've picked a glorious day to be on the water here at Wapango Lake. AOC really began a decade ago. Its foundations was around a principle of improving industry standards with the idea to take the rock oyster to the global market.

We've absolutely grown the business into Australia's leading producer and processor, marketer of Sydney Rock Oysters.

The main aspect of our growth story has been keeping our core identity, and that's really been about that leading the industry standards, and we've built the whole business around that principle.

John Murphy: You've been on the journey with us now for close to seven years, initially joining as our inaugural CFO back in 2018 before being promoted to CEO in 2021. Could you give people a sense of the growth and key milestones that the business has achieved over that period.

Devin Watson: Look, it's been an interesting journey, plenty of ups and downs, but I think consistently we've grown the top line revenue. So that's been year on year growth from the initial outset of Roc Partners investments, we've increased it five times.

Really to be able to achieve that is underpinned by the securing of 191 hectares of aquaculture leases. We've been able to create 2 significant processing facilities, one in Batemans Bay and the other in Sydney.

And so that's really allowed us to expand and control the product through vertically integrated business and go from hatchery all the way through to house of brands.

Beyond the numbers really there's a lot more to that with the people, and the culture, and the passion that we've we have as a business. And that's both past and present staff that have really bought into what we're trying to do and achieve at AOC.

John Murphy: So Wapengo go here Devin, is one of our seven farming operations that span from Merimbula in the South to Port Macquarie in the north. Could you give us a sense of the key commercial and operational advantages that go with having a diversified farming portfolio such as ours?

Devin Watson: Yeah, absolutely. So I think the key there is it's been a strategy, diversification. We know that agricultural businesses do have environmental conditions and risks at play.

So to counter as best we can mitigate against the largest impacts, we've set out to diversify across a range of aspects of a business.
So yes, you mentioned the farming operations, we're along 900 kilometres of NSW coastline, but we stratify that operation through splitting up the nursery components to grow outs to finishing farms.

On top of that we have wildcatch across different estuaries and that's then backed up by hatchery production. So, you know, really we're trying to achieve something that's not reliant on environmental conditions, even though we're governed by them.

And I think the other part about that is from a customer standpoint, it allows us to really provide the product all year round. And that consistency of supply really gives the chefs and the consumers in the end a quality oyster whenever they choose.

John Murphy: Chefs and consumers alike are becoming more discerning as it relates to provenance, quality and the flavour profiles. Our Appellation programme has been central in that journey and the supporting lexicon that goes with the range of flavour profiles in the industry.

Could you please give us a sense of what makes an Appellation oyster and how it has become the benchmark for quality in our industry?

Devin Watson: Yeah, so I think the Appellation programme has been a game changer for us.

It's really about promoting the rock oyster as best in class, going through the provenance story of each of the estuaries so our chefs and ultimately the consumers can really understand how it's grown, where it's grown.

But to get to that point we need to grade it, and we have a very strict grading process. Samples are selected, quality assured, with the condition of the oyster inside and also whether it's true to its flavour profile as well.

Then on the bench it's hand selected and hand graded for size, weight and shape. So it's a well-presented oyster when it gets onto the plate.

The point about the Appellation is it's shucked live for the consumer so it gets the best quality as it can possibly get.

John Murphy: In 2023 Australia's Oyster Coast launched a mid-tier brand Oystersmiths. Could you please give us a sense of the customers that that brand is catering for?

Devin Watson: So we saw a gap in the market between the everyday oysters and the Appellation brand that we had already provided. It's something that we wanted to be versatile and enable a broader audience to appreciate oysters. And that segment really is for that retail and casual dining space.

So what makes Oystersmith so versatile is it's multi-species, multi-format. So, it covers rocks, specific oysters in both live and half shell formats.

At the end of the day, we want more people to experience and enjoy oysters.

John Murphy: Devin, oysters are very much a product of their marine environment, so it's unsurprising that sustainability is a big focus of the industry. Could you please give us an overview on AOC’s sustainability activities over the course of the last few years?

Devin Watson: We start with a beautiful product. It's a product that emboldens and encompasses sustainability in itself. There's no additives, it's a natural product that can be grown in all estuaries.

So everything we try and do - simplify things, make sure they're efficient, reduce waste, reduce energy usage all the way through the supply chain. The way we look at it is to minimise our touch throughout that process.

One of the examples that we're putting through our system is the use of bulk bins. So that's removing polypropylene bags, which is the typical transportation of oysters from farm all the way through to processes.

But not only that, it's actually a safety thing as well for our people. They're not having to lift bags, so everything's moved in bulk bins. The sooner we can harvest and get it into the cold chain, it increases shelf life again, reduces waste it just comes back to leading industry standards at AOC.

John Murphy: Now for a slightly self-serving question, what have been the advantages and key value add of having a private equity partner such as Roc Partners along for the journey?

Devin Watson: Roc Partners has been a real asset. Not only have you brought growth capital to this business, but the strategic insight and long term vision has just been such a great benefit.

I think it takes a good partner to really understand the agricultural and aquaculture nuances, particularly through the ups and downs that we've had in this industry. But broader than that, it's been the partnership and the supportive nature of Roc Partners that we're building a business for the long term of this industry.

John Murphy: Looking ahead, where do you see the future for AOC over the course of the next three to five years? And are there any themes in consumer preferences or aquaculture that are particularly interesting to you?

Devin Watson: Look, it's something that we've now built a platform that we can actually expand upon. So that that makes it quite simple. We're going to grow a whole bunch of our business whether through new markets in export, through you know expanding the current brands that we have.

But we really tap into, I think the overall sense of consumers wanting to understand where the foods come from, how it's farmed, the fact that it's a such a good protein and nutrient rich source of vitamins and minerals. It's such an easy story to tell.

And I'm really happy that we've built the business to where it is at now.

Ultimately, the last seven years of investments will set us up for the next three to five years of growth.

John Murphy: Thanks for hosting us here today, Devin. It's been a pleasure and I've really enjoyed working alongside you for the last seven years and look forward to continue working with you in the future. Thanks, Devin.

Devin Watson: Thanks very much.

John Murphy: Thank you.