It’s not easy being in the health and organic food business. Companies that make claims on nutrition, the purity of the supply chain, attention to sustainability factors, and the humane treatment of animal sources are subject to intense public scrutiny in what is already a highly regulated industry.
To meet this challenge, attorneys such as John Held are valuable. Supplier contracts and regulatory compliance are on his shoulders, as are other transactional aspects of business law. But in his role as executive vice president and general counsel for the Houston-based Omega Protein Corporation, Held had to manage something that was literally explosive in 2010 when the Deepwater Horizon disaster—also known as the BP oil spill—essentially wiped out an entire fish harvest season that is essential to the company’s fish oil supplements.
The event was the largest accidental marine oil spill in the industry’s history, resulting in billions of dollars of losses to individuals and businesses throughout the Gulf Coast region. Omega’s losses drove the company to scramble to find alternative sources of fish. “The oil spill took the Gulf of Mexico out of production for a year,” Held says. “Of our three plants in the region, one was completely shut down, and the other two curtailed operations.”
The company shifted its fishing fleet—refrigerated steamers that launch purse boats with nets, aided by spotter planes the fish—to the mid-Atlantic area. However, the firm was also among the first companies to win a settlement to recoup its losses. The win was sizable: Omega received nearly $45 million from the court-established BP claims fund.
Held credits his outside counsel who worked with him on their strategy, which was to position the case to be settled early in the process. That way, Omega was able to keep all of its employees on the payroll while BP could point to the payout to win positive PR for making amends.
The case and its outcome underscore how Omega is dependent on a few, narrow sources for what it produces. The fish species in the Gulf is the menhaden, which is considered a production stock—too small and bony to be served on a plate but suitable for making fish oil and agricultural fertilizer. It’s a sustainable species, but it has a limited season in which it can be efficiently fished. To supplement its fishing business, Omega Protein Corporation also provides nutraceuticals sourced from fruit and vegetable extracts as ingredients to the food industry and fresh dairy whey from artisan cheese makers who adhere to USDA organic standards.
The rigorous quality assurance practices required by each of these product lines are business tasks with a number of legal issues attached, such as being compliant with organic standards as stipulated in customer contracts. So, it’s no accident that Held has been in this position since 2000. He’s an attorney who enjoys business. Prior to joining Omega Protein Corporation, he held senior executive positions, including that of president and cofounder of two firms, Red Hawk Industries LLC, a bank equipment company, and American Residential Services Inc., a consolidator of HVAC firms. Both were successfully sold under his guidance.
“I was always interested in corporate law, securities, and acquisitions,” Held says. “As a principal in transactions, I learned to work with imperfect information. The law has some gray areas as well, but business lacks the luxury of time. Decisions—such as when to invest in capital—need to be made quickly.”
In the seventeen years that Held has been with Omega, consumer awareness of and demand for fish oil has risen considerably. He says the company had previously harvested fish for animal feed, but acquisitions of a series of four human nutrition companies helped transition the company to human food and supplements markets. This includes Omega-3 ingredients and other specialty oils and essential fatty acids sourced through black currant seed oil and hemp seed oil.
Although Omega is diversifying its business to source more from the land, Held must still ply treacherous waters of the administrative type: bank financing, government loan programs, corporate transactions, working with the Securities and Exchange Commission and the New York Stock Exchange, an alphabet soup of other regulators (FDA, FTC, MARAD), the Coast Guard, and getting proper fishing licenses. And while the company maintains what Held describes as a rigorous training and safety program, employee injuries are managed and compensated for through the Merchant Marine Act of 1920, a unique set of laws that pertain to businesses that operate on the high seas.
From bony fish to Washington regulators, Held’s job goes far beyond case law. “Legal training is great,” he says, “but if you love to wear multiple hats, this is the fun place to be.”
Omega Protein is based in Houston, which is essentially the heart of America’s fossil fuel industry. And yet, it serves a global customer base that is focused on clean nutrition, which is culturally adjacent to concerns for the environment.
So the company has a strong orientation to sustainable practices, wherever and however it can do so. Omega reduced water use at fish processing plants by eighteen million gallons annually, is phasing in new fishing vessels that burn 56 percent less fuel, and recaptures hot air from a Wisconsin facility boiler for use in drying operations. The Mississippi Department of Marine Resources also sunk a retired boat donated by Omega to create a species-supporting reef.
“Congratulations to John Held on this well-deserved recognition, honoring his dedicated leadership and commitment to advancing Omega Protein Corporation’s national reputation, safety and compliance culture, and environmental stewardship. We are thrilled to work with you in support of your business goals.” –Gregory F. Linsin, Partner, Blank Rome LLP