Aquaculture Magazine

Octuber-Novembrer 2016

Aquaponics is AgTech and AgTech is booming. The question is, are we ready?

The other day Aquaculture Magazine editor Dr. Greg Lutz posted an intriguing article from the “Beef Central” website. “Aquaculture shapes as beef’s big protein threat, says financial guru.” The thesis was that between 1969 and 2009, global per capita animal protein had increased from 38 kg to 60 kg and that seafood was now the largest source of it at 160 million metric tonnes (mt) annually, leaving beef a bit in the dust at only 68 mt.

By:  George B. Brooks, Jr. Ph.D.

According to the article, of that 160 million mt, capture fisheries have flattened out at a little over 90 million mt with aquaculture steadily growing to make up the difference. Why? Well it seems much of what aquaculturists have worked on over the past 50 years is having a positive effect. Improved genetics, improved growth rates, improved feed conversion ratios, new technologies and decreased costs have all played a role.
The article was to say the least inspiring, but for a different reason for me than one might expect. The statistics I was already familiar with to some degree having heard them in various forms at World Aquaculture Society conferences over the years. What was interesting is that the larger society is now taking a greater notice. This is encouraging. In my humble opinion, it is becoming more and more clear to all that in just a few decades we are going to have to figure out how to feed nine billion people. Simultaneously, I am seeing in papers and articles that the world also is beginning to understand that climate, economic and political changes are making traditional farming more and more difficult and thus to feed that nine billion people, solutions like aquaculture are needed.
The question is what is the role that aquaponics will play in providing new food resources for the nine billion? Or for the case of this article, how is it going to be paid for? To this latter question, allow me to propose one possible solution. Have your ever heard of AgTech?
AgTech is short for Agriculture Technology.  It refers to the growing list of often high-tech solutions we use to enhance and expand our ability to grow food, fiber and energy. Though unfamiliar to many, with $4.5 billion dollars invested in 2015 according to the website Agfunder, it is the latest player on the high-tech business scene.  Some are suggesting the benefits that Agtech brings to agriculture may allow for a second “green revolution.” This possibility is apparently not lost on the investment community. The website also mentions that in 2015 large corporations including Syngenta and Monsanto have increased their levels of participation. In addition there were major Agtech business summits in Silicon Valley in 2016 hosted by Forbes and others where technologists, governmental reps, farmers, and venture capitalists came together to talk about the future of farming. Other significant players that have taken note include the Bill & Melinda Gates Foundation, Google, Stanford University, and the University of Texas Investment Management. 
According to investor Brian Colwell, “Before Monsanto acquired Climate Corporation in late 2013 for nearly US$1 billion, few investors gave much thought to technological innovation in our agriculture system.” Today to properly manage a farm you need labor automation, bioengineering, remote sensing and an understanding of climate extremes to be successful. These needs now put the entire $177 billion US food industry in play for technological change.
The US National Oceanic and Atmospheric Administration (NOAA) states that America imports nearly 90 % of its seafood. Local aquaponic farms are unlikely to ever compete in price, volume or diversity with the millions of tons of seafood grown annually by the great producers of the world. However, thanks in part to the desire for cost effective local urban food systems, the potential is never the less there for them to replace some percentage of the imported product with competitively priced locally grown food. This suggests that if more aquaculture innovators embrace the proper business models, there may be a major opportunity for aquaculture to significantly expand.
The business model aspect is critical. There appears to be a fundamental difference between the classic aquaculture business model, and the model used by high tech startup business and others. To the credit of the industry, aquaculture businesses are driven by the constant improvement of products. Early majority mainstream companies however, focus on creating solutions for their customer’s problems. The products they provide say food, are but the means to the end. A great example of how this idea works would be an airliner. Boeing does not spend a billion dollars developing a new aircraft and then try to market it. Instead they ask their potential customers what are your needs, what are the problems that you have? Once they understand this, then they design the airliner having a much better idea beforehand if their investment will meet the market need. For that matter they don’t even build the first one till they get an order.
The aquaponic aquaculture industry does not have the luxury of being Boeings. Never-the-less aquaponics fits perfectly into this scenario. Aquaponics is an innovation and innovations evolve to solve problems. Its multifaceted nature supported by a wide variety of technologies, allows it to be used as a tool to address an abundance of challenges.
For example, as suggested by a speaker at a recent Aquaculture America conference, the future for development of large-scale land based aquaculture systems in the US may be limited. Available water and land for multiple acre farms, drought, regulations, price, financing and other issues present significant challenges. In other words, it is getting more and more difficult to get a big farm off the ground. Conversely however, more and more cities want to develop sustainable circular economies, so they are opening the doors to the opportunities that urban agriculture, including aquaponic aquaculture, can address including economic development, food security, jobs, water conservation, STEAM education and much more.
The Fish 2.0 website demonstrates that investors are already picking up on these opportunities. At their November 2015 Sustainable seafood business competition held at Stanford University, 37 companies were selected for the initial pitch competition to investors. Of the 18 shortlisted finalists for US$195,000 worth of cash prizes, fifteen were focused on aquaculture in some manner including “land-based aquaculture, deep-water aquaculture, wild capture, rights-based management, supply chains, fish feed, and aquaponics.” 
To conclude, as part of a parable, Geoffrey Moore in his book “Jumping the Chasm” presents the following cautionary tale:
“The company failed because its managers were unable to recognize that there is something fundamentally different between a sale to an early adopter and a sale to the early majority.”
In other words, one of the biggest challenges for any technology to jump to mainstream success is to understand what the mainstream market wants. So it seems that the stage is set for a boom in US and perhaps world aquaculture where aquaponics could play an important role. The money is interested and the markets identified.The question is, do aquaponics innovators understand the needs and expectations of this new world so they may close the deal?  Time will tell.

*Dr. George Brooks, Jr. holds a Ph.D. in Wildlife and Fisheries Sciences from the University of Arizona in Tucson and served as that institution’s first Aquaculture Extension Specialist. He is currently Principle at the NxT Horizon Consulting group and also teaches Aquaponics at Mesa Community College. Dr. Brooks is co-chairing the upcoming Aquaponics Association conference in Austin Texas. He may be reached at george@nxthorizon.com

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