A shrimp dream come true

Com­pany shows it can raise crus­taceans us­ing tech­nol­ogy, spe­cial­ized tanks far from the Gulf

Houston Chronicle Sunday - - BUSINESS - By Lynn Bre­zosky STAFF WRITER

LA­COSTE — Af­ter 18 years and $35.4 mil­lion in de­vel­op­ment, the founders of Nat­u­ralShrimp are con­vinced shrimp lot No. 180 at the com­pany’s re­mote Me­d­ina County fish-tank com­plex is their aqua­cul­ture pay dirt.

The translu­cent, beady-eyed crus­taceans zoom­ing through the salty wa­ter are now into their 22nd week of growth. They’re about 5 inches long and weigh about 18 grams apiece. They are gulp­ing down food pel­lets dropped hourly with aban­don, well on their way to a har­vest weight of 23 grams.

Nat­u­ralShrimp is one of the com­pa­nies try­ing to prove you don’t need a big body of salt­wa­ter like the Gulf of Mex­ico to raise shrimp — that

they can grow to com­mer­cial pro­por­tions in spe­cial­ized tanks on land. The busi­ness’s aim is to de­liver fresh shrimp to restau­rants and mar­kets far from the sea.

Sur­vival rates at the Nat­u­ral Shrimp fa­cil­ity are beat­ing ex­pec­ta­tions and could wind up be­ing well above the 50 per­cent rate con­sid­ered notable in the in­dus­try. For the first time, work­ers haven’t had to wade through the tanks with buck­ets, fish­ing out float­ing dead shrimp.

The next step is to re­stock af­ter har­vest and add three more 65,000-gal­lon in­door tanks to the com­plex. From there, the com­pany will at­tempt to repli­cate the process in places far from the sea, but a less than a half-day’s drive from metro ar­eas teem­ing with mar­kets clam­or­ing for chem­i­cal-free, never-frozen shrimp.

“We know it works — it’s just now ramp­ing up pro­duc­tion,” co-owner Ger­ald Easter­ling said. “It’s not a con­cept any more, it’s a re­al­ity.”

By “it,” Easter­ling was re­fer­ring to a pricey sys­tem of pumps, fil­ters and a pro­pri­etary de­vice, which af­ter the lat­est round of tin­ker­ing, is in its fifth it­er­a­tion. It es­sen­tially uses se­lec­tive elec­tri­cal cur­rents to de­stroy the bac­te­ria and break up the ef­flu­ent am­mo­nia, a waste prod­uct, that so far have de­stroyed crop af­ter crop of shrimp — and glob­ally made shrimp farm­ing a shaky propo­si­tion.

“It ba­si­cally singes (shrimp killing bac­te­ria) and dis­in­te­grates it so it’s not able to spread,” said Peter Le­tizia, CEO of Florid­abased F&T Wa­ter So­lu­tions, which part­nered with Nat­u­ral Shrimp to de­velop the tech­nol­ogy.

Elec­tros­tim­u­la­tion has been around for more than 100 years, Le­tizia said, and is com­monly used to ster­il­ize sur­gi­cal equip­ment. But it’s ex­pand­ing to com­mer­cial agri­cul­ture. Le­tizia also has been work­ing with fruit, veg­etable and mar­i­juana grow­ers to test its ca­pa­bil­i­ties as an al­ter­na­tive to pes­ti­cides and her­bi­cides.

But the ex­pense and com­plex­ity so far has kept the tech­nol­ogy from wide­spread use in food pro­duc­tion.

“Try­ing to just put elec­tric­ity in wa­ter is ba­si­cally the sci­ence, but there is an art be­hind ex­actly how do you do it,” he said. “What kind of elec­trodes do you use? What kind of power source do you use? What kind of spac­ing? How much vol­ume? There are all those in­tri­ca­cies that take it from a sci­ence and make it more like an art.”

Nat­u­ral Shrimp started in 2001 in a tank in the base­ment of co-owner and Chief Tech­nol­ogy Of­fi­cer Tom Un­ter­meyer, then a re­tired pro­gram man­ager from the San An­to­nio re­search and de­vel­op­ment or­ga­ni­za­tion South­west Re­search In­sti­tute. Jim Bloom, man­ag­ing part­ner at San Fran­ciso in­vest­ment firm Vopne Cap­i­tal, called Nat­u­ral Shrimp a “fun­da­men­tally at­trac­tive in­vest­ment.”

Nat­u­ral Shrimp is a penny stock, trad­ing at about 8 cents a share.

“Nat­u­ral Shrimp con­tin­ues to show signs of break­ing out af­ter un­der­per­form­ing in 2018 on in­vestors tak­ing note of the com­pany’s push to strengthen its growth prospects,” Bloom wrote in an anal­y­sis pub­lished Jan. 22. “The com­pany is fresh from re­ceiv­ing a new patent for the com­mer­cially vi­able sys­tem for grow­ing aquatic species in­doors. The com­pany now owns world­wide rights for grow­ing shrimp species in­doors lever­ag­ing its new-patented tech­nol­ogy.”

Vopne is not an in­vestor in Nat­u­ral Shrimp.

Shrimp is the United States’ top-sell­ing seafood, with the av­er­age con­sumer eat­ing 4.4 pounds of it per year. As ocean stocks have de­clined from over­fish­ing and pol­lu­tion, farm­ing it has be­come a big busi­ness, over­tak­ing wild har­vest­ing in 2007.

Tra­di­tional shrimp farms are built on coast­lines that have a ready sup­ply of salt­wa­ter to fill open ponds. In­land shrimp farm­ing has been evolv­ing, but pro­duc­tion has been in­con­sis­tent and com­pa­nies have had to stock their ponds at low den­sity due to wa­ter treat­ments that in­tro­duce bac­te­ria and cloud the wa­ter.

“The rea­son we’re here, (why) we stayed with it, is we al­ways knew the mar­ket and the need,” Easter­ling said. “What we have here is phe­nom­e­nal. It an­swers all the prob­lems in the in­dus­try as far as rais­ing aquatic species in­doors.”

Texas leads in U.S. shrimp cul­ti­va­tion. But that pro­duc­tion has de­clined, from a 2003 peak of 9 mil­lion pounds val­ued at about $18 mil­lion to be­tween 2.5 mil­lion and 2.9 mil­lion pounds per year. Texas shrimp farms in 2016 gen­er­ated rev­enue of about $8.3 mil­lion.

Aqua­cul­ture con­sul­tant Granvil Treece said the farms have taken hits from young shrimp not sur­viv­ing the trans­port or ac­cli­mat­ing to man-made en­vi­ron­ments. Fewer than half make it to mar­ket. Bow­ers Shrimp Farm, which op­er­ates the state’s largest shrimp farm, near Matagorda Bay, had the state’s high­est sur­vival rate at 54 per­cent.

It’s the same for farms around the world. And even when the lar­vae take, shrimp in all pro­duc­ing coun­tries have fre­quently suc­cumbed to dis­ease out­breaks. There also are con­cerns about aqua­cul­ture op­er­a­tions dam­ag­ing estuaries and con­tam­i­nat­ing nat­u­ral fish­eries with toxic out­flows.

A 1999 dis­ease out­break in Ecuador nearly wiped out that na­tion’s shrimp farm in­dus­try, as well as some 100,000 jobs. Mex­ico in 2016 suf­fered dev­as­tat­ing losses to dis­ease and pre­ma­ture har­vest.

Many in the in­dus­try thought they’d found the so­lu­tion with biofloc, a wa­ter-fil­tra­tion method that uses pro­bi­otics to help neu­tral­ize bad bac­te­ria. But af­ter six years and an in­vest­ment of $15 mil­lion, Nat­u­ral Shrimp’s lead­ers con­cluded biofloc didn’t meet the needs of their high-den­sity busi­ness plan.

One week they’d sell out their shrimp at the Pearl Farm­ers Mar­ket, the next they’d be noshows. Har­vests would, within a few days, drop from 1,000 pounds to 40 as bac­te­ria quickly pro­lif­er­ated.

“We would have tanks full, and then we’d start hav­ing them die off,” Easter­ling said. By the time they no­ticed the first few dead ones, it was too late.

While Nat­u­ral Shrimp won’t har­vest the cur­rent tank un­til mid-to-late Fe­bru­ary, the goal for the 30,000-square-foot fa­cil­ity is 4,000 pounds of shrimp a month. The aim is to pro­duce 7,000 pounds each week once the new tanks are op­er­a­tional, send­ing truck­loads rum­bling past neigh­bor­ing corn, cot­ton and sun­flower fields to buy­ers like Michael Scott, the cor­po­rate chef at Rose­wood Texas Raised Wagyu Beef.

Scott first came across the shrimp about a decade ago at a Dal­las food show. He has since be­come a Nat­u­ral Shrimp share­holder.

“I thought they were Hawai­ian blues,” a va­ri­ety of shrimp, he said. “I walked over, snapped the head off and I bit into the tail raw . ... I said, ‘This is but­tery — this is very clean.’ I said this is like the ‘Kobe beef of shrimp.’ ”

Pho­tos by Wil­liam Luther / Staff pho­tog­ra­pher

Nat­u­ralShrimp Pres­i­dent Ger­ald Easter­ling, left, and Michael Pineda ex­am­ine al­most-mar­ket-ready shrimp in their La­Coste pro­duc­tion fa­cil­ity. Sur­vival rates at the fa­cil­ity are sur­pass­ing ex­pec­ta­tions and could wind up be­ing well above the 50 per­cent rate con­sid­ered notable in the in­dus­try.

In La­Coste, south­west of San An­to­nio, the com­pany seeks to ful­fill the needs of metropoli­tan ar­eas that are teem­ing with mar­kets clam­or­ing for chem­i­cal­free, nev­er­frozen shrimp.

Wil­liam Luther / Staff pho­tog­ra­pher

At Nat­u­ralShrimp, the sea crea­tures are raised in 65,000-gal­lon in­door tanks. A patented sys­tem uses elec­tri­cal cur­rents to de­stroy the bac­te­ria and ef­flu­ent that typ­i­cally de­stroy shrimp crops.

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