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How a Local Bait Store Became a Key Player in the International Caviar Industry

  • 7 min to read

The strong scent of fish permeates a small whitewashed hatchery in Osage Beach, Missouri, but the pungent aroma doesn’t bother Steve Kahrs. “People used to complain about the smell when they walked in,” he says, “but Dad used to say it smells like money.”

Sixty-two years after Steve’s dad, Jim, opened Osage Catfisheries, the scent of money is stronger than ever, thanks, in part, to paddlefish caviar.

For years, the caviar market was dominated by one fish – the beluga sturgeon from the Caspian Sea, a massive freshwater lake, in Eastern Europe – but when an import ban on the fish was implemented in 2005 to halt overfishing, the market flooded with new varieties of fish roe. Salmon and whitefish caviar surged in popularity due to their lower price points, but the larger roe couldn’t compete with the quality or flavor of smaller and darker beluga caviar. To match the rich, buttery flavor of the beluga sturgeon, Jim turned to one of its relatives – the paddlefish, or spoonbill as it’s often called, which dates back before the first dinosaurs.

Fifteen years after releasing the first batch of farm-raised paddlefish caviar in 2000, Osage Catfisheries has expanded its acreage tenfold and also its client base, with international orders shipped across the globe, from Germany to Russia to Japan.

Family Affair

“It’s a long and colorful story,” Steve says. Seated at his desk inside the fishery, he is surrounded by evidence of the family’s 60-plus years in business. Black and white photos of his mom and dad cover the walls, and framed aerial shots depict the fishery’s colorful and expansive patchwork of ponds and lakes. On the shelves behind him sits a dusty collection of cleaned catfish skulls, autographs and a few preserved baby paddlefish that float motionless in test tubes.

Before making a splash in the international caviar market, Jim moved his young family to Osage Beach in 1953 and opened Osage Catfisheries, a small hatchery where Jim sold minnows.

“There really was no such thing as ‘Osage Beach’ when my parents moved here,” Steve says. Today, Osage Beach is a high-end resort community, and Osage Catfisheries, with its whitewashed office and stitching of lakes, has gone global.

“Dad was a visionary in the aquaculture business,” Steve says. “He was always looking to expand. If we were still just selling fish for people to stock their ponds, we would have been out of business a long time ago.”

Growing up, Steve and his three siblings worked summers at the fishery. The three children watched as the business grew and their dad ventured into new revenue streams. But when Jim decided to dive into the booming caviar market with the help of the giant paddlefish, some questioned the decision.

“Dad thought they were fascinating fish,” Steve says, “but the other fish farmers thought we were crazy, that there was no monetary value in paddlefish.”

The other fish farmers were wrong.

By the early 1980s, the coveted beluga caviar had skyrocketed in price and overfishing was rampant. In 1979 – 26 years before the import ban – Jim and other fish farmers began breeding paddlefish for its roe. Paddlefish caviar had been on the market for some time from commercial fishermen, but in 2000, 21 years after he started the breeding process, Jim harvested his first farm-raised roe (the mass of eggs found in the ovaries of female fish) under the name L’Osage Caviar Co.

Although the price was right – today at $35 dollars per ounce compared to beluga caviar, which can cost up to $281 per ounce – L’Osage Caviar and Osage Catfisheries were unknown in the market. “That was the biggest challenge,” Steve says. “Dad had to establish L’Osage as a premier caviar brand.”

To distinguish itself, L’Osage Caviar focused on flavor and quality mouthfeel. To make its caviar, roe is screened from the ovaries and then submerged in a salty brine.

Steve looks for bright flavor when he tastes the caviar. High-quality caviar has a buttery and rich flavor with some salinity, but shouldn’t be overly salty. Too wet, and the caviar loses its consistency and pop. It should be dry and stand up on its own when spooned onto a dish.

“I love good caviar,” Steve says. “It’s great plain, on melba toast or on top of scrambled eggs.”

Eventually, L’Osage Caviar was picked up by Rick Moonen’s RM Seafood restaurant, then in New York, and Fortune Small Business magazine ran a story on L’Osage Caviar in October 2006 that reported the company’s product had found its way into gift bags at the Academy Awards. Suddenly, the small-production business couldn’t keep up with demand for its caviar. Sadly, Jim passed away in 2006, before his prized paddlefish caviar really took off, but his legacy lives on as Steve and his brother, Pete, continue to run the family business.

In the past few years, Steve says a new challenge has surfaced in the industry – paddlefish are being poached from local waters. In 2013, more than 100 suspects from Missouri and eight other states were issued citations or arrest warrants for paddlefish poaching.

“There was a lot of caviar being sold on the black market, and you wanted to know who you were doing business with,” Steve says.

A cartilaginous fish, paddlefish have no bones and can weigh as much as 160 pounds and be as long as 7 feet. Their enormous size makes them valuable as a sporting fish for both their mass and their meat, but paddlefish are also targets for poachers who want to harvest their roe. The Missouri Department of Conservation estimates that a female paddlefish carrying 20 pounds of roe can be worth $4,000 on the black market.

Gentle Giants

Outside Steve and Pete’s office, galvanized tanks of all sizes hold schools of fish. There are bluegill, gar, catfish, largemouth bass and common carp. In total, Osage Catfisheries breeds 32 varieties of fish from the Missouri and Mississippi river valleys. Only one of those, the paddlefish, is bred for consumption. The rest are shipped across the country and the world for research and further breeding.

The back of the fishery is a maze of larger tanks. Flashes of metallic silvers and blues catch the sunlight when the large metal garage door is opened. One tank filled with largemouth bass is headed to Bass Pro Shops for display in the stores’ aquariums. Another, filled with Asian carp – one of the most invasive species in the region due to its ability to outcompete native fish – is contracted to the federal government.

“We raise them so government agencies can rid waterways of them,” Steve says.

Next to the Asian carp is a large tank filled with what appear to be tiny spoon-billed platypuses no more than 4 inches long. These are baby paddlefish.

Babies are trained on food pellets for their first three months of life before they’re transitioned onto a natural diet. Young, slippery bottom-feeders flap onto their sides when Steve tosses a handful of pellets into the water. At the moment, the dark blue fish are small enough to hold in the palm of your hand, but they won’t stay that way for long. This past March, one angler hooked a 140-pound paddlefish on Table Rock Lake outside of Branson, Missouri – the largest fish ever caught on record in the state.

If that sounds big, hold your breath, because the paddlefish is nothing compared to the beluga sturgeon, which can live to be more than 100 years old. The largest beluga sturgeon ever recorded weighed more than 3,000 pounds, and belugas are the largest freshwater fish in the world. Although the paddlefish is drastically smaller, they’re still quite a sight to see, and the prehistoric fish are surprisingly agile. “Bump into them in the water and they’ll rocket the other way, if you can even get that close,” Steve says.

The Kahrs family keeps several adult paddlefish in the lakes along the golf course they own, just a stone’s throw away from the hatchery.

“If a golf ball lands in the water or a cart startles the fish, they’ll actually breach the water like a whale and come splashing down,” Steve says. “It’s really amazing to see a 60-pound fish come straight out of the water like that.”

Once the paddlefish reach 5 to 7 centimeters, they are transferred to the nursery before eventually being transported to the ranching program’s numerous lakes, which are at least 5 acres each in order to sustain the mammoth fish. About 12 years later, when paddlefish have reached their ideal weight, they are gathered into large gill nets and hauled to the processing facility.

Because good caviar requires cold temperatures to ensure quality eggs, Osage harvests its paddlefish from January through April, as long as temperatures are cool enough. Male fish are processed into large bullets, which means the head, guts and tail are removed, while the ovaries of female paddlefish are removed and the roe is screened off before the meat is processed into bullets. The paddlefish’s tender white meat makes it popular on the seafood market, especially smoked paddlefish, and ensures Osage’s processing is nearly waste-free. But the real breadwinner is the caviar, which is packaged for sale in the U.S. and overseas.

Keep Swimming

In the ’70s and ’80s, at the height of the beluga caviar craze in America, a teaspoon of the tiny black pearls was considered a true indulgence given the price tag. There was – and still is – proper etiquette for serving it: Caviar should be spooned off utensils made of mother of pearl, tortoiseshell or bone, and never metal, as it can ruin the fresh, untouched flavor of the roe.

In 2014, Osage Catfisheries sold roughly 1,300 pounds of caviar under the L’Osage brand, nearly all of it wholesale. Of that, 1,000 pounds were devoured by the international market. Steve says he’s seen a shift in domestic consumers in recent years – fewer young people are buying caviar in America, but the same isn’t true elsewhere in the world, where caviar is more embedded in cultural traditions.

“Young people just don’t want caviar anymore,” Steve says. “But in places where caviar is built into the culture, like Russia, China and the other Eastern European countries, caviar is still in high demand.”

Today, L’Osage’s domestic caviar sales have slowed since its boom in 2006. Still, a handful of Midwest chefs feature L’Osage’s paddlefish caviar on their menus.

Chef Craig von Foerster – a California transplant who served as executive chef at Sierra Mar restaurant in Big Sur – has spooned out L’Osage caviar in multicourse dinners hosted in the Ozarks for the past few years. Recently, Foerster opened his own restaurant, Harvest, in Rogersville, Missouri.

“I first tried the caviar years ago right before Valentine’s Day,” Foerster says. “I loved it. No one had any idea that someone in Missouri was making great caviar.” Foerster has been serving it ever since. “It’s hard to describe the flavor, but the main description is clean and crisp. It’s probably the best domestic [paddlefish] caviar I’ve ever had.”

Chef Wes Johnson of Metropolitan Farmer in Springfield, Missouri, sampled the caviar more recently and is now looking for ways to incorporate it onto the restaurant’s menu.

“I would love to serve it at the bar as an appetizer with Champagne,” he says. “It has a great mild flavor that’s not overpowering.”

When Jim Kahrs founded Osage Catfisheries 62 years ago, he couldn’t possibly have predicted the far-flung (or far-out) direction his business would take, all thanks to the oddly shaped paddlefish. Today, his sons are carrying on his work, running the family fishery and ensuring the scent of money continues to hang in the air.

“My dad loved this business,” Steve says. “He had his kids around him, and none of us left. Every day was a wonderful day for my dad – even in the bad times. Every day was a good day.”

To learn more about L’Osage Caviar Co. or to purchase a 1½-ounce jar ($67.50) or 4-ounce jar ($180), based on seasonal availability, visit osagecaviar.com.

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