When the United States Department of Agriculture earlier this year doubled its recommendations about how much seafood Americans should eat, it may have been doing a favor to the country’s hearts and waistlines. But it also added pressure of increasing demand to the world’s already-taxed seafood supplies.
And that could help spawn a sustainable aquaculture industry that some say is ripe for development in the U.S., especially in places like California and the Pacific Northwest. Figuring out how to drive much-needed investment and innovation to the industry – and how to make money doing it – was the focus of a group of investors, entrepreneurs and scientists gathered this week in San Francisco as part of the Ag 2.0 conference.
About half the world’s seafood comes from aquaculture, making it a $100 billion industry that is expected to swell in the coming decade. In the U.S., which imports about 85 percent of its seafood, only about five percent of seafood comes from domestic aquaculture operations.
“The future of most seafood is probably going to be aquaculture,” said Aaron Enz, a partner with Watershed Capital Group, a venture capital firm with a focus in sustainable aquaculture.
In the U.S., though, the industry faces hurdles including complex regulatory processes, high costs of coastal land and the hefty capital investments needed for new aquaculture ventures.
“We need a federal policy… and to take responsibility for our own consumption decisions,” said Michael Rubino, manager of the National Oceanic and Atmospheric Administration’s aquaculture program.
The agency, in conjunction with the U.S. Department of Commerce, is in the process of drafting national policies to support sustainable aquaculture. The new guidelines aim to drive research into aquaculture technologies, minimize adverse environmental effects of aquaculture and explore alternative feed stocks for farmed seafood.
The aquaculture industry is also up against concerns about its environmental sustainability, including issues of waste and harmful effects on wild fish populations. While practices in other counties lag behind, Rubino said domestic aquaculture has already made a shift to tighter environmental controls.
“The public perception of aquaculture hasn’t caught up with the reality,” Rubino said. “The government is trying to get word out about better practices that are already in place.”
Meanwhile, investors may be keeping a sharp eye on aquaculture, but they’re not making a lot of investments yet, Enz said, citing technical obstacles, seafood price volatility and a lack of early success stories.
That could shift, though. One venture fund, New York-based Aquacopia, focuses solely on sustainable aquaculture, and counts among its portfolio companies like Oberon, which makes fish meal replacement, and startups building open ocean fish farms.
“Once we have a few success stories I think you’re going to see a lot more investment,” Enz said.