Commercial aquaponics.. viable or not.. and why?

[Dino Pantelidis]

So much discussions have come about regarding the viability of aquaponics as a business.

Can it work, or not?

and why?

In Canada (Toronto specifically) the focus for local has been huge. Being in a cold climate we cannot source certain products locally, and they come from California, or Mexico. I have no experience running aquaponics on a huge level (I've got a small setup on the second floor of my restaurant)

But what I dont get, is why is a hyroponic/greenhouse setup selling, say cucumbers viable?

We have greenhouses in Ontario growing peppers, cucumbers,  year-round in a cold climate. so these guys have heating costs in the winter, probably artificial light for the lack of sun in the winter - and I am sure they are turning a profit? (They wouldn't be in business if they werent making money!)

Regarding additional income streams such as consulting, training, farm tours

That is all part of the business IMO. My restaurants turn a profit from all aspects of the business. (ie. Catering) but are base is dining in/taking out)

If you look at my restaurant model, I've got 3 cooks, 2 waitresses, cost of rent, heat, hydro, enormous food cost (30-40% in many cases) TONS of competition, and at the end of the day we turn a profit.

from 7am to 10am we sell 3 eggs, 3 bacon, homefries, toast and coffee for 3.99!! plus I got to pay all those other costs. but money is made because of turn-over.

Why NOT aquaponics? (forgive my lack of knowledge)

But if you've got say, 4000 sq. feet of grow beds, ample lighting etc. and you follow what most of the experts are saying. (ie. say 27 holes per 2X4 raft)and decide to grow, say buttercrunch lettuce

4000 sq. feet should technically give you a gross production of 13,500 heads of lettuce?

obviously you stagger the harvest cycles, have an ample amount of seedlings ready to replace the harvest.

Is it unrealistic that 4000. sq. feet of grow beds, with proper lighting, fish to plant population etc. will output, say 10,000 heads a month?

am I missing something here? (again, forgive my lack of knowledge regarding aquaponics, growth times)

I'd love to dive in and learn aquaponics, grow year-round for the many, many local restaurants that "do" source locally but simply cannot find them.

I guess I am trying to figure out what one could expect out of total production, then discuss the input costs etc.

Would love to hear your opinions.

[Joe Johnson]

 

        Great question!! I do not have a operating system but your question is one of several that I also am curious about. Anyone in the commercal section on line.

 

 

[Dino Pantelidis]

I want to add the following into the scenario:

-Greenhouse facility is within your home facilities so your rent is technically nothing but your cost of living in your home.

-Assume (never assume) but in this scenario assume that your entire production is already sold to John and Jane Doe etc. which will purchase your entire crop. (market price varies so this variable would need to be determined based on demand/location/product.

[Jonathan Kadish NYC AA Chair]

As it is said, business is business. If you know how to run a business and you have customers for a quality product, it should be profitable. If you have no idea how to run a business than it can eat you alive, that is why 9 out of 10 businesses fail. I am counting on my 20 years in of running my businesses to make my commercial operation a success.

My Keys to success will be (In no order):

Low Overhead

Maximize retail sales

Focus on efficiency at every point in the design phase to reduce input costs

Develop and maintain great relationships

Ask for help often

Social media & local promotion

Research market demand

Be creative

Work really hard!

.

[John Marland]

Thanks for the response to this Jonathan, what type of business are you running? I am also looking for people who have successfully started and are running a profitable aquaponics business. I am very confident that a commercial system of a certain size will be profitable with the fore mentioned keys to success above, however my main consideration is ok, I have grown 10,000 heads of lettuce, what do I do now? I understand it's important to get this figured out before getting to this step, but could someone tell me how they would go about getting there products (both produce and fish) to market please?

Many thanks

[Dino Pantelidis]

I think the idea here is start small.. think big! Having been in the hospitality industry for most of my life, I have contacts in every sector. Restaurant, produce wholesaler, caters etc.

[Chris Lukenbill]

A lot of good points brought up so far. I am only in the planning stage of my process here, but I am confident in the fact that there are many aquaponics adventures out there that may not have it 100% correct but are still very successful commercially.

One point that I would like to bring up is that in the interconnected world that we are in now, the most important thing to do is find what you are good at and what you love to do and focus on where they intersect.

[Converse]

  It sounds like what you are asking is how to develop a market for your product.  That does take some knowledge of your area.  Do you want to focus on supplying the commercial realm or selling to the consumer directly?  Or both?  Each requires different approach...

    In our area our Farmer's Market 'association' has  annual Food and Farm Connection events.  The local chefs and places looking for local produce for their stores come to this event...and the Farmer's show up too!  This is a great meet-up and way to get your product known to those who would show-case it on menus and on store shelves. Maybe you have something like this going on in your area?  A great thing for you to attend even if you are not at the market-ready phase yet.  You'll know what is sought after.  The best way to find this out is to call your local Farmers' Market organizer.  They would know if there are events like this in your area.

    Is there an annual 'Who Is Your Farmer' guide published in your area?  This type of publication features the farmers in an area and the product they have for market.  Call your local County Extension Agent or the organizer of the local farmers' market to see if they know if there is something like this available n your area.

 

   Jonathan's list is excellent, by the way!  Nothing pays off better than a good plan, research, diligence, and a lot of elbow grease.  The point though is to work smart, not necessarily just to work hard. Congratulations to you, Dino, on asking the hard questions as you forge ahead.

 

   Having contacts in the Hospitality industry may help.  A huge thing you will have going for you is knowing how to work with people.  If you have local connections, use them.  One thing we run into out here is finding very local markets ( thus the need to connect at the chef/farmer events)...the transportation issue (fuel costs are a main factor) is always a factor...if you have a small restaurant wanting only a bit of produce and fish, it is not cost effective for you to deliver it very far...all things to consider.

      Exposure at a Farmers' Market is a great way to develop loyal clients.  You may be able to move from the Farmers' Market venue to just selling directly off your farm/greenhouse after you have this public exposure. DId you know that many high-end restaurants looking for great produce sources do send staff to farmers' markets looking for top knotch sources?  Put up a sign at the market stating your willingness to connect!  This is the time of the year may Farmers' Markets are ramping up for the season.  Go the orientation meetings and ask what sold well in the area. 

     At our Farmers' Market meetings I found out that the produce that was an "interesting color" sold very well.  Purple. Purple Kale, broccoli, carrots, etc..There may be something that is sought after in your area.  Is there an ethnic market niche for you to fill?

   And samples are a great seller...Be sure to check you local health reg.s for doing this if providing samples at a market of event. 

 

  Please excuse this if all of this is "old news" to you.  Just trying to be helpful.  My best to you as you forge ahead!

 

- Converse

 

  

[John Marland]

Great reply Converse, thank you - you've given me and probably a few others some great ideas for marketing. I guess the real key is to start with a small system that is easy to add on too and expand as your customer base grows. Also maybe not quit your day job until you reach that tipping point where you can make the leap to full time income from produce sales etc.

Many thanks.

John

[Chris Lukenbill]

Converse, that is great information!

Really the same things that apply to starting any small business apply to starting any commercial aquaponics venture in my opinion.  However, Converse was able to touch on some very specific points that relate especially to Aquaponics.  One point that I'd like to add with Converse's "niche market" comment is that Aquaponics is a great way to take advantage of creating a controlled environment system that will allow you to not only create beyond organic food but also food that is completely "out of season" for your market with a little planning and focus on creating the proper structure.

Here are a few links that I've collected in my research phase that may be helpful to you...

Sylvia's 10 things to consider before taking the plunge into Commercial Aquaponics: http://theaquaponicsource.com/2010/10/14/commercial-aquaponics/

Backyard Aquaponics information page which is a complete gold mine of information:

http://www.backyardaquaponics.com/information/47-information-and-li...

A specific report off of that list which includes a massive amount of data including a cost/benifit analysis:

http://www.backyardaquaponics.com/Travis/Master%20Aquaponics%20Repo... 

[Jonathan Kadish NYC AA Chair]

I'm in the music business and have been doing retail sales for since 1993. One of the reasons I'm diversifying and moving into aquaponics is that you can't make lettuce digital and than steal it! Just like i started that business, I'm starting small to build my relationships. The more relationships you have the more lettuce or other widgets you can grow.

Don't fall in to the hidden Underpants Gnomes trap from south park season 2 which was during the internet bubble.

Their business model was

1) Steal Underpants

2) ?

3) Profit

Every person wanting to start a business should have to watch that. Here is how most people here are thinking

1) Grow fish and plants

2) ?

3) Profit

Have 2 figured out before you start 1

John Marland said:

Thanks for the response to this Jonathan, what type of business are you running? I am also looking for people who have successfully started and are running a profitable aquaponics business. I am very confident that a commercial system of a certain size will be profitable with the fore mentioned keys to success above, however my main consideration is ok, I have grown 10,000 heads of lettuce, what do I do now? I understand it's important to get this figured out before getting to this step, but could someone tell me how they would go about getting there products (both produce and fish) to market please?

Many thanks

[Carey Ma]

The first problem is that it requires a great amount of capitol. The ability to manage and balance two systems simultaneously and be good at business. Too many business fail not because the technology is failing but because they lack something fundamental ie experience in some facet of their business. Profitability is all about balance.

IMO commercial operations to date have been running on their own technical foundations. Hydroponics is a tested and functional business model. Aquaculture and more specific recirculating aquaculture also has their own set of techniques. Two completely different businesses with two sets of skills and routines. Each one able to be profitable on its own. So if we were to combine two (successful) operations under the same footprint; I believe commercial AP systems are possible.

I think it would be easier for a proven practitioner of aquaculture to add the hydroponics side by hiring an experienced hydroponic greenhouse operator than it would be the other way around. The problem with solid waste is a minor technical problem.

The hobby systems we play with, that we term AP is like comparing raising a few angel fish in a fish tank with a five hundred (or more) tank commercial breeding program.

Just because one can raise a few backyard chickens does not mean one has the skill set to operate a chicken farm.

To set up a commercial operation requires full knowledge of all facets of both operations plus good management practices as well as a full compliment of business skills. Then you have to be able to finance the darn thing. Lacking any of these would be a good foundation for failure.

In other words: Stop dreaming and stop thinking it is simple. It is not! I would not encourage anyone to even think about commercial until they have a solid five year of operating and expansion before going commercial.

But that is just my opinion.

[RupertofOZ]

And I agree completely Carey.... and most current "commercial" operations are at the limit of what 1/2 people can physically sustain, particularly with a direct marketing model...

 

And scaling beyond that... with the employment of labour... incresed distribution logistics.. or change to wholesale of produce... is a whole new ball game and with incorporation of food safety compliances.. which are sometimes an anamtha to many, but which will inevitably be enforced....

 

It becomes a whole new set of figures... and an increase of scale that I don't think many have as yet envisaged...IMO...