Growth and Sustainable Innovation in the Aquaculture Industry

The depletion of wild fishery stocks, coupled with global population growth, has paved the way for the rapid expansion of the aquaculture industry. This article analyzes the drivers of growth in the aquaculture industry, the environmental issues arising from this growth, and the startups developing solutions to these issues.

Growth Drivers

The aquaculture sector's rapid expansion is primarily attributed to the confluence of overfishing and marine environmental changes on the decline in capture fisheries, alongside escalating protein demand driven by population growth. These dynamics have positioned aquaculture as a pivotal contributor to global food security. From 2000 to 2020, aquaculture production soared from 43 million tonnes to 122.6 million tonnes, (encompassing both freshwater and saltwater species). In 2020, the industry's estimated farm gate value reached 281.5 billion USD. The burgeoning aquaculture sector is poised to exceed $400bn by 2030 with a 4.5% CAGR, driven largely by the expanding global middle class and a preference for fish to fulfill dietary protein requirements. Aquaculture is the fastest-growing industry in the food production sector and has an indispensable role in the contemporary food landscape. The ocean fisheries' inability to satisfy current and future demand underscores the necessity for sustainable, diversified aquaculture production on a large scale, to meet the demand of the growing global population.

Historically, wild fisheries have satisfied the bulk of human demand for fish, but given widespread fisheries collapse from unrelenting overfishing, supplementary aquaculture production has grown to exceed wild fishery production. Global aquaculture production surpassed wild-caught fishery production for the first time in 2012, with aquaculture outpacing wild-caught fishery production every year since. 

Accompanying the proliferation of aquaculture operations on land, in oceans, and wetlands, there has been a corresponding surge in businesses developing ocean technology to tackle some of the most pressing challenges in the aquaculture industry. Some 380+ venture-backed ocean tech companies directly serving the aquaculture industry are operating as of November 2023, these companies have amassed over $720M in venture capital in the year 2022 alone and are on course to outpace that number in 2023 (Pitchbook). Upward trends in venture capital investment and total deal count in aquaculture startups throughout the past decade indicate vast opportunities for innovations to increase the production efficiency, profitability, and sustainability of global aquaculture systems. 

VC Deal Count: Ocean Tech serving the Aquaculture Sector (2014-present)

VC Dollars Raised: Ocean Tech serving the Aquaculture Section (2014-present)

Environmental Impacts: Key Considerations in Scaling Aquaculture Production

Growth in the aquaculture industry brings with it significant environmental challenges. Key among these are the depletion of wild fish stocks for fishmeal production, disease spread in dense farming conditions, and nutrient pollution from waste runoff. Addressing these issues is critical for establishing enduring sustainability in the industry.

Environmental issues and solutions: 

Alternative Feed Types to Combat Overfishing for Fishmeal: Traditional aquaculture relies heavily on fishmeal, derived from forage fish, which contributes to wild stock depletion. The fishmeal market is expected to grow to $10.8 billion by 2030 as aquaculture production scales, exacerbating this issue. A promising solution is to develop alternative feeds, such as those based on algae or other proteins, which can meet nutritional needs without the overexploitation of forage fish. This shift is not only environmentally crucial but also economically viable, given the rising costs of traditional fishmeal. Some companies addressing this issue include Ittinsect, Lemnature AquaFarms, Aquanzo, Syaqua.

Integrated Ecosystem Approaches for Waste Management: Nutrient pollution from waste runoff is a critical environmental issue, especially in ocean-based operations. Integrating aquaculture with marine plant farming, such as macroalgae or seagrass, can create symbiotic systems that manage waste effectively. These integrated systems not only mitigate harmful algal blooms and oxygen depletion but also expand potential farming locations, reducing operational costs. LISAqua introduces technology leveraging this solution.
Disease management to decrease operational mortality rates and pathogen transfer to wild populations: Disease spread is a major concern in densely populated aquaculture settings, posing risks to farmed and wild fish populations. Orally delivered vaccines and therapeutics emerge as a practical solution, offering a stress-free and efficient method for mass immunization. This approach, particularly with plant-based vaccines, is cost-effective and scalable, aligning with the industry's need for sustainable disease management strategies that minimize operational burden. Some companies providing various tech solutions include Aquit, ViAqua, Konree Innovation, Biofeyn.

Real-time data collection and monitoring solutions: Depending on the system and scale, aquaculture operations lack the real-time data monitoring necessary to identify critical issues of deoxygenation, pH change, invasive species infestation, and more. Manual sampling or disparate monitoring devices fail to meet the data collection needs to measure and thus maintain environmental conditions that maximize operational efficiency. Some companies addressing the data gap in aquaculture are Sumadra, ReelData, Bioceanor, ANB Sensors, Dynaspace.

Rapid, Large-Scale Biofiltration to Meet Needs of Recirculating Aquaculture Systems (RAS): Stringent environmental regulations in the United States necessitate the meticulous management of production waste in RAS. While these systems offer benefits in water conservation and reduced ecological impact, they encounter a pivotal bottleneck: the capacity of biofilters to process waste effectively. The current limitations in biofiltration technology directly influence the size and scalability of land-based RAS operations, a constraint hindering the operational scale, profitability, and efficiency of RAS. Some companies addressing this issue include Innovasea and Clean Valley.

What’s Next for Aquaculture

The future of aquaculture hinges on adopting sustainable practices and leveraging ocean technology to responsibly scale systems. Innovations in feed, disease management, and waste reduction are both environmentally imperative and economically beneficial. Companies like Tidal and eFishery are at the forefront of these advancements. Tidal, backed by Alphabet's X, harnesses machine learning and underwater cameras to optimize fish farming practices, enhancing both yield and welfare. eFishery, on the other hand, offers an automated feeding solution that not only reduces feed waste but also improves the efficiency of resource use in aquaculture. These companies have marked significant milestones, with Tidal being recognized for its innovative approach in TIME's 2023 Best Inventions, and eFishery recently hitting unicorn status after a $108m Series D fundraise and rapidly expanding its reach in Southeast Asia to over 70,000 farmers. There’s a tremendous role for disruptive ocean technology to play in increasing productivity, profitability, and sustainability in aquaculture. As the industry evolves, balancing economic growth with ecological responsibility will be key to ensuring its long-term viability and the health of our oceans.