Posted tagged ‘myth’

Aquaculture Myths That Constrain Investment (Part I)

November 6, 2011

I hadn’t intended this blog to become a running advertisement for the Aquaculture Means Business LinkedIn group, but lately the discussions have been so diverse and interesting they’re making it very easy for me to feed the blog beast.  Last week I launched a discussion called: Top 10 Aquaculture Myths That Limit Its Access to Private Capital. As so often is the case, the conversation has ranged beyond the initial question to range over the breadth of topics related to aquaculture’s difficulties appealing to private investors. Some excerpts:

Some excerpts:

From Durwood M. Dugger, president of Biocepts International, Inc.:

Myth – Access to a “niche” market for an aquaculture product is a viable basis to start and aquaculture business. Niche markets are ephemeral in the best case and you better have a business plan production cost structure capable of competing with the industry low cost producers. Relates to why many people don’t go the venture capital route.

Myth – “I’ll start small and grow my aquaculture business on its profits.” Wrong. Aquaculture is like modern agriculture where success is generally based on achieving optimum economies of scale. If you want to have any hope of profitability you need to start within the optimum economies of scale or be prepared to subsidize your losses until you reach them. Relates to why many people think they can avoid the venture capital route.

Myth – You should borrow money to start your aquaculture venture. You don’t finance high-risk aquaculture start ups on debt – ever. Anything involving a live product is high risk. 

Patrick Wood, whose LinkedIn profile describes him as “expert at seafood for Europe & warmwater aquaculture”, suggests that it is not myths but basic VC  psychology that constrains access to private capital for aquaculture:

 Most investors probably don’t think it is an easy call so don’t get involved. They are also not interested so much in long-termism and, if not sexy enough (yes they need to be tickled) and not rewarding enough they will tend to shy away.

Another “myth” addressed is that of  “farmed fish never taste as good as wild.  Dave Conley,  Founding Partner – Aquaculture Communications Group, LLC, responds:

 I have seen a number of articles/reports about blind taste tests using wild and farmed salmon and the results showed that the average person cannot tell the difference, and in some cases they preferred the farmed product. Even some so-called experts could not tell the difference. Having lived on Vancouver Island, the hot-bed of anti-salmon farming activism, I have heard this comparison ad nauseam so I used to take farmed salmon to various neighbourhood BBQs and offer it to people without telling them what it was. Guess what…they liked it! 

Honeylette Conol, veterinarian at Tres Hermanos Catfish and Panagasius Farms, adds:

A farmer can design his own fish taste according to what feeds he is giving and the quality of water he is introducing. Hence, most consumers prefer these products.

I’ve only scratched the surface of the discussion here and strongly encourage anyone with an interest in the business of aquaculture to check it out and contribute.  I will be mining the discussion for more posts over the next few days; these people make a lazy aquaculture blogger’s life very easy!

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