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.

[Dino Pantelidis]

Awesome reply Carey! This helps target specific areas in question regarding aquaponics

I will try and look at some of these points and offer my opinions on them. I think its very important as a community to discuss these questions, and concerns.

Would love to hear from some of the existing aquaponic farmers out there, Gina from Green acres organics would have some wonderful input on the matter.

The first problem is that it requires a great amount of capitol.

Any serious business, with serious intentions will require a capital investment. One not being qualified to make the investment can be an entirely different issue. Opening a restaurant, as an example as small as 1300 sq. feet (and hoping you can even pay the rent!) can average upwards to $350,000-450,000 with competition on ever corner around you - all selling the same thing - food!

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.

Again, (IMO) if Aquaponics has been proven to be a more stable, cleaner, marketable product than hydroponics - then I would push for aquaponics. In simple terms, I would say well, hydroponics works, but wow, this Aquaponics idea sounds cool.. fish feeding plants, plants cleaning water.. "Marketable!" cool!

Not that there is anything wrong with growing organic, hydro lettuce within city limits. Whatever road you choose, be it hydro, or aqua. At the end of the day if you are getting XX amount of output of product  and you've paid for fish food, or fertilizer, paid your labour cost if any, covered expenses, most importantly SOLD your product. then you are on the right path! I believe an entrepreneur can do well with almost anything she/he can learn, market, and sell.

IMO commercial operations to date have been running on their own technical foundations. Hydroponics is a tested and functional business model.

If someone who lacks basic business skills will fail at anything their hand touches. My last restaurant was a tiny, 8 table, 800 sq. foot shack bringing in over 1 million a year in breakfast and lunch. The new owner new how to cook like a chef, but simply could not handle managing everything else involved. The restaurant now grosses 400k a year.

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.

Here in Canada, Aquaculture has been on the decline as most of the competition is coming out of Chile and other parts of South America. Of course, local is always marketable, regardless of the competition. There is a market that will source out, and purchase "fresh and local" I think it's been mentioned by many before that the fish in aquaponics is not where the profit lies. it simply pays for the "food for the plants" 

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.

You are probably right - here in Canada I have attended many Aquaculture courses. The most recent held by the University of Guelph in Ontario. There were about 30 people also attending this course. about half of them were guys who operate some very large farms in the Leamington area of Ontario (Our agri-rich region) They were all there looking into the viability of converting their greenhouses to aquaponic farms. For what reason, I do not know. could be rising fertilizer costs, I dont know.

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.

I couldnt agree with you any more regarding this. I would throw this is my first answer regarding being an entrepreneur. I can cook in my kitchen or for 300 :) Its a matter of learning, making mistakes, and learning from your mistakes. Start slow and small!

[David Waite]

With any venture the bottom line is what does your capital cost you. If you have land and cash you are way ahead. If you have to borrow to buy land and capital costs the deck is stacked against you in any agriculture business. Start small and grow using cash flow and not borrowed capital and you will be way ahead.

[Converse]

   I wonder what some people are considering "commercial aquaponics"?  At what point is one considered commercial as opposed to not?  If you supply a restaurant are you  commercial?  Two?  What if you also supply a retail store, not necessarily big box store....and amid each of the afore mentioned  you do turn a profit?  Or is it only a commercial operation if you are on the web, and supply big box stores, have a large CSA base and teach courses? 

  It is possible to start small and yet be commercial, and grow your business over time. Will it be a sole source of income right away (to live off)? No.  But you can do this without having to sign away your first-born to the bank.  Yes, you can go about it with loans and such, which is that way people seem to think a "good" business venture needs to be 'born' in order to be taken seriously and be considered viable.  (I am NOT slamming those who have gone this route.)   In this day of uncertainly, I would really baulk at putting myself in debt to start an AP business when it can be done from the ground-up little by little.

 

  There are options here.

 

- Converse

   

[Converse]

  One thing I did forget to mention is that if you are going to supply to, say the larger / posh resorts and or restaurants, many expect to buy at a lower-than-local-retail cost (kind of like a whole sale price.).  Here is where you need to consider that your profits come from volume of sales rather than a higher price on the smaller number of items for sale. Know your product.  Know what you can offer and still make a profit.  Know what is out on the market in the realm of naturally or "schmorganically" grown produce prices.  Here is where if you are certified organic you can command a higher price than conventionally grown. Naturally grown can command a higher price than conventionally grown. Education. Education. Education.  Teach these chefs about the plus of aquaponically grown produce. You can command the same price range as "schmorganic".

    Out where I am, there is quite a push in SOME food establishments for unique, sustainably grown, and naturally grown produce on the menu.  Here is where AP  can shine.  Luckily, the posh resort restaurants are those looking for this type of produce.  Until the chefs know AP is top quality though, the produce from an AP system is just another 'fish-from-the-sea' in a world of naturally grown produce... Here is where communications skills come in and those meet-and-greet events are sooo important.   ........So produce from AP systems stay fresher longer. Less waste due to less need to trim off dead/wilting leaves over time spent in their cooler.  This leads to less volume the food establsihments needs to buy and a better profit margin for them. IF this is one of your selling points (I am only using this for an example), be prepared to give a chef a bunch of leaf lettuce (as an example) to see this claim in reality...

   So yes, there is a bit of a difference when supplying some food establishments as opposed to selling off your farm/greenhouse to the consumer directly.  This does need to be taken into consideration when planning for your planting/marketing/profits.

 

- Converse

[Nate Storey]

What no one is talking about is Opportunity Cost.  Unless someone can answer me how they are going to outcompete hydroponic producers on a cost/quality basis, I'm going to say that raft won't work.  I've done the numbers, and they don't add up- especially in greenhouse production.  Rafts were never supposed to be used outside of the tropics and sub-tropics.  They aren't productive enough to justify a greenhouse- especially with the intensive capital entry costs of AP production.  So, a challenge:  How will you outcompete the hydroponics guy next door?  Niche markets? (good luck with that one)  Product differentiation? (if you're doing conventional sales, packaging, etc. it isn't going to happen)  On a cost basis?  (Ha ha ha ha ha ha ha. . .)  Until someone can answer this and prove it, the answer to raft produciton in Northern climates has to be a resounding "NO."  

[Dino Pantelidis]

Hey Peter Thanks for the input:

I got that number for Chris smith in hawaii. I spoke to others in the forum regarding this issue, and some of the other numbers were higher so I went with the lower number to be conservative.

I was asking for others experience regarding lettuce such as buttercrunch and thats what I got back :)

with regards to price: In Canada many of our products go by case count rather than weight. unless your buying a packaged and cut ready to serve product.

these are what my wholesaler is paying for his product, adding in most cases 15-20% on top and selling to the restaurants.

Organic-Head/Iceberg United States Ctn 24 $50.00

Field-Leaf Green United States Ctn 24 $32.00

Field-Leaf Red United States Ctn 24 $38.00

Again, these are all food terminal prices. Restaurants do not pay this price in Canada. it is 20% more expensive (these are yearly average prices, sometimes its higher and lower)

Looking at some of the successful operations: Lets use Green acres organics as an example. the girls started out small, and from what I have been reading they are doing better than ever, to top it off in a poor economy! and they were in the construction business before this! My hat goes off to the girls for doing that, its a wonderful success story.

So I guess my original question was: how much production could you get out of 4000 sq. feet of grow beds on a buttercrunch lettuce.

[Dino Pantelidis]

Nate: I have a friend in the Laurentian mountains 45km outside of Montreal.

He has been doing raft aquaponics now for I believe 4-5 years.

http://www.cultures-aquaponiques.com/

and ironically, he is half an hour away from Canadas largest hydro-lettuce grower!

He tells me he is doing well.. thats all I know. and sells all of his product to 5 or 6 major high-end restaurants in the Montreal area

Check it out, get in contact with him! I believe he is making it work.. he has been there that long!

[chris taylor Swamp Creek Farms]

your head is in the right place,     so when are we starting ?

Carey Ma said:

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.

[Dino Pantelidis]

Dont get me wrong, I am doubts about whether this works or not as well.. This is a good way of evaluating the business. Lots of smart guys here from all corners of the world!

One part of me sais yes, while the other sais no!

[Wil Miles]

I say go for it you already have a small system just add to it little by little but do a little more research as far as system design you want the most out of the least space while being efficient.And i agree with Carey get with someone who has knowledge of large systems its not the same. But good luck keep us informed seems like you have everything in place except plants you only live once do it all

[Dino Pantelidis]

LOL at Wil.. I like your outlook!

I always thought the larger systems were more "stable" than smaller ones. much like an aquarium.

[adam harwood]

Hello, My Farm was built, and operated by my family. We also work our daily chores, this requires FIVE  Skill sets,

 My training in the field is only One skill set the others took 25 years to apply,

 So you are correct, commercial farming is a mystery at best, We turn a profit every day!!!!

 Our numbers are real, I use the work. where. you . live. concept.

 I also have buying practices that are very skillful.

  This style is not for everyone, remember this, the system will work and produce, it is ONLY WHAT YOU DO WITH THE FUND YOU GET THAT MAKES THE PROFIT!!!!

 wE ARE THE ONLY VERTICAL FARM OF ITS KIND!!!!

 Simply put aquaponics does work, the first skill set is real life experience, and do not out think the process.

 What we preach is it!!!! ps the training part is a total loss to my ability to make money, WE MAKE MORE MONEY FARMING  on a daily basis, I quote " those who can not do teach"

 positive is how we live, love and blessings adam harwood designer/ builder/ operator/ of the Lilypad Farm,

 www.globalaquaponics.net  ask questions