“Before we changed our model to work with several growers and buy kelp at scale, the entire state of Maine grew no more than 40,000 pounds of kelp in the entire year – this year, our partner farmers grew more than 500K lbs. We have been able to grow the industry because we designed a supply chain to make it easy for fishermen to grow kelp with a commitment from us to give them free seed – and buy back every blade that they grow. For the first time, growers can now be sure that there is someone who will purchase their kelp and process it on the back end. The first thing to know about starting a kelp farm is that, if you don’t already have the equipment from fishing (like a vessel, and the knowledge of setting moorings and lines, social capital), it will be prohibitively expensive.. It is cheaper for fishermen and existing aquaculturists because it is cheaper for them to start a kelp farm than it would be for an entrepreneur starting from scratch. If you’re an entrepreneur without much experience on the water (or without a vote), it can cost about $50,000 minimum to set up your farm, not including the boat – which means it won’t be financially viable.. If you can lay your own moorings, or if you have your own large boat and old ropes, setting up can be pretty cheap. And then the next step to consider for financial viability will be if the grower has secured a buyer. People that grow potatoes don’t make potato chips and there is a reason for that, especially when you are talking about an innovative industry like seaweed – you can’t just sell kelp right off the farm at any scale to make money. Working with a buyer that can give a solid and truthful buying guarantee is essential to make any money unless the farmer wants to put a great deal of investment into building processing and marketing capacity.
“We want to expand a real market opportunity here for ocean farmers. And you can produce a lot of kelp on a small farm - 5 pounds a foot on 13,000 ft of line in a 4-acre farm is a lot of poundage. So, when you think about the sheer quantity that you can grow on a 3-4-acre farm, and the market availability for this product you’re looking are very incongruent projections. What we are doing right now is forging an entirely new market for wet product, which is heavier meaning we can grow more of it and it goes further in every way. This will enable people to grow a whole lot more kelp and make a whole lot more money from it and we are paying a very high premium for it. Our farmers make their money back in the first year when they are working with us, but we need to put a ton more money into the production side in order to make our products affordable to people. It’s exciting to continue forging this market and the capacity is not at its limit. Last year we quadrupled the amount of kelp in the entire state of Maine in one growing season, that just came from our partner farmers. There was 280,000 pounds of kelp grown last year and we were around 250,000 pounds of that total. This year we produced around 500,000 pounds and that is almost double what was produced in entire state last year so there has been enormous growth – but all of that kelp was produced on only 15 farms.
“When it comes to buying seaweed, we are loyal to our partner farmers first and foremost and we are very dedicated to that loyalty. We give them free seeds from our nursery, and we guarantee purchase of every single blade of kelp that they grow. We are committed to the integrity of that promise and recognize that growers depend on us as much as we depend on them – it’s a commitment that makes us who we are and ensures that our partner farmers are going to be able to sell all of their product that they grow. We have minimum daily harvest of 10,000 pounds a day that people need to get off their farm because it’s a real business – we cannot afford to take small lots or we won’t be able to continue to grow the industry. The harvest season is only two and a half months, so we need all of it to be moving on time and going into the freezer, so selling to us is a step up from just growing. Because of this everyone in our network is making money, we have a wait-list of people who want to join our network and it’s not a production capacity issue, we could figure that part out. You constantly hear we need more infrastructure – but it is more the case that we need to build the market which is an effort that takes time and millions of dollars of investment.
Have a buyer
“Do not get into seaweed unless you have a purchase agreement from someone you trust! That really is key. Several growers have seen these loose commitments for purchase fall out. If someone is planning on growing kelp, they must have a buyer because this market is not the same as oysters. Kelp is not eaten or marketed like a seafood; it is most successful as a value-added product. Our products don’t live in the seafood case and people don’t look for you it there because the people who eat cod are not necessarily the people who eat seaweed.
Case studies are authored by industry members at the request of The Maine Aquaculturist. Authors are selected based on experience and expertise in a key business aspect of aquaculture. See our About page for more information.