A B2B fishery and marine platform in Indonesia is creating an easier, safer and more sustainable fishing ecosystem
Fishing For a Future
The most successful tech businesses started with simple questions: “Is there a better way to index and search the Internet?” or “Could homeowners repurpose spare rooms or entire homes to travelers?” In the case of Aruna, that question might be “Can rural fishermen extend their fishing expertise and sell supply beyond their local market?” The answer is deeper and more impactful than you can imagine.
For context, the fishing industry in Indonesia is huge and likely bigger than you realized. At more than 30,000 miles, the country has the second longest coastline in the world. As a result, it is also the world’s second largest base producer of seafood. In total, Indonesia has roughly three million fishermen. These numbers highlight the huge opportunity of the Indonesian fishing industry. However, the current reality is quite different. Most Indonesian fishermen live on less than $100 a month and members of coastal communities make up 25% of Indonesians living below the poverty line.
There are three overlapping issues at the heart of the challenge facing fishing communities. The first is reach. Due to poor infrastructure, most fishermen only have the ability to sell their fish in their local markets – which means constricted demand and low prices. Second is the monopoly power of local distributors. Outside the local population, there is often only one potential buyer for any surplus of fish, leaving fishermen with very little pricing power. Finally, there is the overall inefficiency of the current system. Even if fishermen do succeed in selling to a middleman, there are often up to seven layers in the supply chain between them and the end customer. This means almost all the profit ends up with the middlemen. These issues combined explains the ineffeciencies and reality for local fishermen - they get very little return for their labor.
Two of Aruna’s founders were raised in fishing families, so they deeply understand the challenges fishermen face and were determined to find a way to help.
As with many startups, the founders had severe limitations on capital and time. This meant the journey to start Aruna wasn’t easy or straightforward. However, the team got a boost by winning a hackathon in 2016, leading to an invitation to meet the Indonesian president. He in turn challenged the Aruna team to get an implementation of their idea up and running in only a month. The team not only met that challenge, but soon after, the first Aruna hub in Balikpapan, Indonesia was open and the company was in business.
Previously, fisheries only had access to the local markets. With Aruna, that access is now global. By cutting out the many middlemen between fishermen and the customers, fishermen have the potential to get paid over 75% more than was previously possible.
A BALANCED SOLUTION
The team found the business was more complex than they originally imagined. The initial pilot highlighted issues across the supply chain - with challenges for customers and suppliers.
From the customer side, the first and biggest problem is supply. How do you guarantee consistent supply when availability varies by season and by location? Then there is the challenge of scale. Customers often want fish in blocks of 1-2 tons at a time, where a single fisher may catch 20-30 kilograms of fish a day. Added to these are issues around sustainability. How can customers be sure the fish they are purchasing were caught in a manner that doesn’t damage fish stocks? At the same time, how do you ensure meeting the demands of discerning consumers?
The Aruna team refocused on knocking down these challenges. Their aim was to build an integrated, end-to-end solution. For buyers, the Aruna system now delivers essential information to customers to enable purchases - such as what volume of different fish types will be available in different locations, at different times in the year. That means that a buyer needing a consistent supply of tuna, for example, over the course of the year can be supplied from Sumatra and Kalimantan early in the year and from Java and Papua in later months to supplement.
On the other side of the equation, before Aruna, fishermen did not have access to broader markets for their fish, and they also didn’t even know what to catch to meet the needs of potential customers. Aruna guides fishermen to catch specific categories of fish at appropriate times of the year to match market demand. This has had a significant impact. At the most basic level, it has allowed fishermen to earn up to three times in income compared to what they were previously earning from their fishing. They can do this while actually catching fewer fish. At the same time, the focus on quality over quantity means they no longer use harmful tools or catch young fish. All this has a significant positive impact on the sustainability of fish and fish stocks.
The team also built a new system to ensure quality and traceability using ‘local heroes’. These heroes are mostly the fishemen’s children or younger family members. They understand how to use the technology while also having knowledge of fishing and quality control. They enable detailed traceability. For example, who caught the fish? What tools did they use? And what was the location of the catch? These insights ensure the highest levels of traceability and food safety for customers.
Meeting customer needs is essential, but they are only one side of the equation. The impact Aruna has for fishermen and their communities is even more profound. According to Utari Octavianty, Chief Sustainability Officer at Aruna, “Our mission is very simple. Our local heroes come from the coastal villages; they are the families of the fishermen. That means they don’t typically have the opportunity to think about childhood priorities like education. They are preoccupied about work and how to provide for their families. We want to change that. Our goal is to ensure the fishermen and the people that live in the coastal villages can have a better livelihood.”
We are customer-first and are driven by our Local Heroes. These young people can understand the technology and are dedicated to helping sustain their communities.
Aruna has also enabled increased employment for family members beyond the fishermen themselves. In addition to the ‘local heroes’ program for younger members, Aruna has increased the opportunities for female workers by providing them with flexible work opportunities processing fish. This increases the value of the catch and adds supplemental income to their families. Even fishermen not engaged with Aruna see tangible benefits. The addition of competition in their markets pushes traditional middlemen to provide better pricing.
Aruna’s expansion has also provided some communities with unexpected benefits. Many coastal communities are so remote they don't have consistent electricity or good connectivity. Without these essentials, the deployment of Aruna’s technology is a real challenge. To combat this, the company now collaborates with solar electricity suppliers and other technology companies to increase community access to electricity and Internet connections, again enabling better jobs and wages.
Aruna already has nearly 30,000 fishermen in their system and last year sold 44 million kilograms of seafood to customers around the world. However, with three million fishermen in total in Indonesia, there is plenty of room for growth. Aruna has distinct plans; by 2045, they hope to have every location in Indonesia connected to its market. The company’s ambitions don’t stop there. These communities have many additional needs, such as increased access to financing to pay for new equipment. Aruna wants to become a one-stop-shop for many different services. Its mission is nothing less than to raise up fishing communities across Indonesia and ensure they can have a better life.
There is an old idiom, “Give a man a fish, and you feed him for a day. Teach a man to fish, and you feed him for a lifetime.” Aruna is updating this for the 21st century. It turns out that if you help people fish more effectively and give them access to a larger audience, you empower them and their families for generations to come.