9 Alternative Seafood Companies Saving the Oceans
Table of contents
We recently wrote about how plastic is choking our oceans and the different green packaging technologies being developed to wean us away from petroleum-based products. While we hope we can turn the tide, there’s already an estimated 5.25 trillion plastic particles currently circulating in the world’s oceans, and scientists are only now studying the potential health effects on humans. Yet seafood is big business, with global production hitting about 171 million tons in 2016 and valued at about $132.6 billion, according to the Food and Agriculture Organization of the United Nations. Aquaculture now accounts for about half of total production, and many of those farming operations are using advanced sensors and analytics to be more efficient and eco-friendly. Meanwhile, a number of companies are developing alternative seafood products to further relieve some of the pressure on Nemo and friends.
Disruption of the Seafood Industry
In a way, the seafood industry is facing many of the same challenges as the dairy industry, which is being disrupted by a cohort of startups that are milking concerns about climate change, animal welfare, and human health into a multi-billion-dollar business. We’ve already touched on the anxiety over plastic pollution and human health, but changes in the environment are also increasingly problematic for the seafood industry on two fronts. The consequences of higher seawater temperatures and ocean acidification – water becomes more acidic by absorbing carbon dioxide from the atmosphere – are already being felt. For example, salmon are dying off in Alaska because the water is too hot, while scientists are already seeing the effects of higher seawater acidity on commodities like shell-building oysters.
On the flip side, fisheries also produce carbon emissions, which a recent study said are much higher than previously estimated, though still just a fraction of the total carbon footprint from food production. And let’s not forget about seafood fraud around endangered species that comprise some of your favorite sushi meals like eel and bluefin tuna.
Alternative Seafood Still in the Guppy Stage
So conditions seem to be in place to support alternative seafood, and we’re not talking about the frozen fish sticks you pick up at the grocery store. Here the picture is different from dairy in several ways. First, the market is nearly nonexistent at this point. The only real numbers we have come from a marketing analysis commissioned by the Plant Based Food Association, which pegged the U.S. plant-based meat industry at $670 million, jumping 24% in just one year, ending in June 2018. That’s most likely driven by the popularity of alt beef brands like Impossible Foods and Beyond Meat (BYND).
Second, while there are a few plant-based seafood startups making waves, a lot of the activity in the alt seafood space actually seems focused on what’s become known as cellular agriculture, though lab-grown meat probably gives you a better idea of what’s in play – bypassing feedlots and slaughterhouses for culturing animals’ cells and creating meat far from picturesque meadows. That’s quite different from alternative dairy, where a handful of still largely early-stage companies are recreating proteins from milk and eggs through a fermentation process similar to beer. The process uses genetically modified yeast, a widespread technology for making all sorts of alternative proteins.
Cell-based Alternative Seafood Startups
Cell-based seafood, in contrast, involves placing the fish cells into a nutrient mix where they grow into actual meat – but without the toxins and microplastics. Let’s dive right into the five alternative seafood startups using cellular agriculture (or, more accurately, cellular aquaculture) to concoct crustaceans and cod out of animals’ cells.
Probably the most well-known of the bunch is Finless Food, a Berkeley, California-based outfit that we first profiled with other lab-grown meat (advocates prefer clean meat) startups a couple of years ago. Since then, the two-year-old company has raised $3.5 million in disclosed funding, though recently took in an undisclosed amount of money in June of this year. The company moved into a new facility in nearby Emeryville where it will further develop its cellular aquaculture platform:
Finless Food will begin with Pacific bluefin tuna, one of the many species being overfished.
Update 03/08/2022: Finless Foods has raised $34 million in funding to ramp up its strategic growth period. This brings the company’s total funding to $37.5 million to date.
Another California cellular aquaculture startup is BlueNalu out of San Diego. Also founded in 2017, BlueNalu caught our attention with a $4.5 million Seed round raised last year. And just a few days ago the company released its diabolical plot its plan for turning us all into fish people commercializing alternative seafood from fish cells from the seashore (say that five times real quick). The company plans to introduce products into a test market in two to three years, and break ground on its first large-scale production facility in five years. This cellular alternative seafood factory will be able to churn out 18 million pounds of finished seafood products per year when at full scale.
That’s the future. Today the startup is focused on producing whole seafood medallions and fillets before testing products in the next two to three years. BlueNalu already has the marketing down, with a campaign called Eating Blue, a riff on the going green theme.
Update 01/20/2021: BlueNalu has raised $60 million in debt financing bringing the company’s total funding to $84.8 million to date.
Yet a third California startup in the space, San Francisco-based Wild Type, raised a $3.5 million Seed round in 2018. The three-year-old company is looking to save wild salmon with its first cell-based fish product, and earlier this summer it featured its lab-grown product at a fancy schmancy dinner in Oregon. The company produced more than a pound of Wild Type salmon, enough to be included in six courses of what looks like a friggin’ awesome tasting-menu:
The company claims this was the first time anyone has offered cell-based sushi on a menu. We think they’re probably right.
Update 10/09/2019: Wild Type has raised $12.5 million in Series A funding to accelerate production of its cultured salmon. This brings the company’s total funding to $16 million to date.
Way on the other side of the fish-depleted Pacific is Singapore-based Shiok Meats, which claims first-mover status in the Southeast Asia region. Founded just last year, the company has already picked up at least $4.8 million in three fund-raising rounds (one undisclosed) this year. Meaning “fantastic and delicious” in Malay, Shiok is focused on cell-based crustacean meat like shrimp, crab, and lobster. It recently threw its own little tasting party, showcasing for investors a plate eight shumai, a standard dumpling that should be the measure for any good dim sum place. The platter cost about $3,600 – so obviously there’s still plenty of work to do in scaling the economics – though the Chinese are known for their penchant for paying big bucks for rare foods, eating their way to mammal extinction.
Update 09/30/2020: Shiok Meats has raised $12.6 million in Series A funding which will go towards constructing a pilot plant to make their shrimp which are expected to launch in 2022. This brings the company’s total funding to $20.4 million to date.
Finally, there is Cell Ag Tech, which we know very little about except that it was founded in February of this year and the co-founders listed on Crunchbase are both based in Toronto. There is some generic language about its mission, but we’ll stay tuned for further developments.
Plant-Based Alternative Seafood
Plant-based seafood obviously doesn’t have the cachet of its beef counterpart, but that may soon change thanks to a company at the forefront of the plant-based industry – Impossible Foods. Founded in 2011, the Silicon Valley startup has raised a hefty $687.5 million, including a $300 million Series E in May. While Impossible has cut its teeth on developing plant-based burgers that bleed (thanks to the same fermentation technology used in the dairy industry and elsewhere), the company is testing the waters with seafood. The New York Times reported that the company recently produced an anchovy-flavored broth made from plants. Eventually, Impossible believes it can engineer plant-based texture along with taste. It has some competition in a handful of other alternative seafood startups.
Founded in 2016, New York-based Gathered Foods has netted $18.7 million over the last year, including a $10 million convertible note to continue building a factory in Ohio to produce its plant-based seafood. The company’s flagship line, Good Catch, features a plant-based tuna that is a combination of six plant proteins: pea, soy, chickpea, lentil, faba, and navy bean. Algal oil and seaweed powder help add that fresh-from-the-ocean flavor to this alternative seafood product.
Founded in 2015, New Wave Food has taken in about $250,000 in disclosed funding to make plant-based shrimp out of seaweed, soy protein, and a few other flavors sources from the flora kingdom. It’s low in fat and cholesterol-free to boot. Coming soon: kosher and halal versions.
Update 01/06/2021: New Wave Foods has raised $18 million in Series A funding to scale up production and expand sales and marketing. This brings the company’s total funding to $20.3 million to date.
Also founded in 2015, Ocean Hugger Foods is a New York startup of master chef James Corwell. The first item on the plant-based seafood menu is sushi tuna, Ahimi, made from tomatoes and a few other things the chef had sitting around the kitchen. The company is also working on Unami, an eggplant-based eel alternative, and Sakimi, a carrot-based salmon alternative.
Genetically Modified Salmon
Speaking of salmon, our final company on this list is offering real live fish as a different kind of alternative seafood – one that’s been genetically modified. Founded way, way back in 1991, Boston area AquaBounty Technologies (AQB) is publicly traded in a minor league version of the NASDAQ. The company has been trying for more than 20 years to get its GMO salmon into the U.S. market. It appears to have finally cleared the last hurdles this year. It actually started selling the fast-growing fish in Canada in 2017.
Canadian scientists genetically engineered the Atlantic salmon using a growth hormone from chinook salmon and what’s called a gene promoter from an ocean pout, which looks like an eel and has a sort of antifreeze protein in its blood that helps it survive in very cold waters. That combination leads to a higher concentration of growth hormone in the blood, causing the salmon to grow faster with about 25% less food and ready for market in half the time. The resulting frankenfish is about 99.99986% genetically identical to Atlantic salmon. Dig in.
Conclusion
While fish and crustaceans lack that certain charismatic fauna look that makes many of us pause to eat beef or pork, there are plenty of other reasons to avoid seafood these days. That’s opened the floodgates to a new wave of alternative seafood companies, though the industry is still learning to swim. That’s particularly the case with cellular aquaculture, where the efforts are pretty small scale. So while there’s quite a lot of activity on that front, we’d expect plant-based alternative seafood to rise to the top of the category pretty quickly, given the success of its beef alt counterparts like Impossible Foods and Beyond Burger.
Share
AquAdvantage is genetically modified salmon, that can grow to market size in half the time of conventional salmon with 25% less feed used compared to current farming methods. In 2020, the company produced its first harvest. The company currently has two active farms and they are expanding to a third farm. Third farm will finally push AquaBounty into profitability, CEO says…
AquaBounty has market cap $283M and they have $204M in cash.
ARK has a position in AquaBounty – that provides some validation.
One of the main risks is how customers are going to respond to GE salmon. I think it will be a positive response, but it may take some time.
Seriously? The company that pulled in $227,390 last quarter is talking about profitability? How about they start by showing us some meaningful revenues. Sell some salmon. Which brings up an interesting point. Why is this company building salmon farms instead of simply selling their new strain of salmon to professional salmon farmers and taking a high-margin royalty? It smells a whole lot Intrexon’s pivot from synbio to selling apple slices. And that’s fitting considering AquaBounty was borne from Intrexon.
AquaBounty started selling salmon this year from its Indiana farm (no 2). Indiana farm will have the capacity to produce 1200 tons per year, but currently is producing 450 tons per year.
The game changer is farm no 3 being constructed in Ohio – that will be the first large scale farm. The construction will cost $200M and the company already has enough money for it. That farm should be constructed by end of 2022 and it will have capacity 10,000 tons per year.
We’ll look forward to seeing those revenues pouring in then. Once they’ve done more than $2.5 million in a single quarter – about 10X what they’re doing now, then maybe we’ll take another look.