By Kevin Robinson-Avila / Journal Staff Writer
It’s still not possible to harvest ocean-grown shrimp in the desert, but the New Mexico Shrimp Co. in Las Cruces is doing the next best thing.
It’s growing all-natural, saltwater shrimp in indoor tanks through a sustainable operation that could not only help conserve ocean resources, but also provide consumers in urban and rural areas with plentiful harvests of locally grown, tank-to-table seafood that’s as fresh as shrimp at a seaside restaurant.
The company, which launched in late 2014, expects to produce about 13,000 pounds of shrimp annually at a new 12,000-square-foot facility that it opened last summer in Mesquite, just south of Las Cruces. And the company is now turning its operation into a franchise business, with three licenses already signed for facilities in New Mexico and Massachusetts, and another half-dozen in the works, said company co-owner Tracey Carrillo.
“We’ve created a license agreement and structure that allows anyone, anywhere in the U.S., to acquire the technology and know-how to rapidly open one of our saltwater shrimp farms,” Carrillo said. “Our goal is to licence 10 new facilities a year. We have six more people who plan to become licensees and are now getting their financing in order, and identifying buildings and land to pull the trigger this year.”
Local demand for the company’s produce indicates a winning operation. Its shrimp is regularly sold out to local restaurants and direct to consumers as soon as it’s harvested, Carrillo said.
With a retail price of $17 per pound and $15 for wholesale, the company expects to generate more than $200,000 in revenue a year from its in-house shrimp production. Plus, it’s selling franchise licenses for $35,000 in the U.S. and $100,000 in other countries, followed by a 2 percent share of gross sales from each franchised operation.
“We’re not profitable yet because we invested a lot in our new building to get up and running,” Carrillo said. “But we believe by next year we will turn a profit.”
The company has raised $750,000 in private equity to date, most of it from Indiana businessman Rod Rance, who co-owns the company with Carrillo.
The firm’s rapid growth reflects the appeal of its innovative, environmentally friendly technology and business strategy, all of which was developed at New Mexico State University. It grew out of agricultural research at NMSU, where Carrillo works as an agronomist and assistant director of campus farm operations.
Carrillo and his NMSU colleagues were developing an alternative variety of cottonseed that’s free of the naturally occurring toxin “gossypol,” which cotton plants use to fight pests. By eliminating the presence of gossypol, the cottonseed could potentially be used as a high-protein animal feed, adding more value to crops for growers.
To test the new cottonseed, NMSU chose fast-growing, saltwater Pacific white shrimp, which can grow from microscopic larvae to full size in just four months, thus providing rapid study results, Carrillo said.
The trials were successful, demonstrating cottonseed’s value as an alternative source of protein. And, after growing the shrimp, NMSU offered the fish for sale on the university website as a fresh, locally grown product.
“The response was overwhelming,” Carrillo said. “We sold everything we produced in just one to two hours. People were lined up around the building.”
That led to Carrillo’s eureka! moment: Sell fresh, locally grown, saltwater seafood as an alternative to the frozen, imported shrimp that floods today’s markets, and often includes preservatives and even antibiotics. In addition, by feeding shrimp with cottonseed, NMSU’s process could help decrease commercial depletion of ocean resources because today’s shrimp farms use fish meal. That’s fish harvested from the ocean, and dried and ground into aquaculture feed.
“That’s depleting ocean species and it’s not sustainable,” Carrillo said. “We’re basically using fish to feed more fish to then feed humans. We want to replace fish meal with plant-based protein.”
That could greatly lower shrimp production costs, since cottonseed currently sells for about $200 a ton, compared with about $2,000 a ton for fish meal. And that, in turn, could add a lot more value to cottonseed for growers, which was the original purpose of NMSU’s research.
Carrillo sought help from Arrowhead Center Inc., which manages all of NMSU’s technology commercialization efforts. Apart from patenting the technology, Arrowhead helped draw up New Mexico Shrimp’s franchise business strategy.
It also helped the company compete in the prestigious Fish 2.0 investment competition last fall, where aspiring startups compete for money, and get to network with deep-pocketed investors and entrepreneurs during Stanford University’s Sustainable Seafood Innovation Forum. The event helped the company line up more licensing deals.
“They have a great product and a great business model,” said Arrowhead Director Kathryn Hansen. “It’s NMSU research that led to a commercial opportunity and they’re building a successful business around it.”
Meanwhile, the company continues to develop its technology into an innovative, environmentally friendly operation. At the new Mesquite facility, the firm now recycles all tank water for use in growing saline-tolerant crops. It also uses fish waste to add nutrients to the plants.
“We add the waste to the growing beds because it’s loaded with nutrients like nitrogen and potassium,” Carrillo said. “The plants take up the waste, and we continue to recycle and filter the water. It’s a zero-waste facility.”
The company has created a comprehensive software system called Aqua Doctor to better manage its saltwater tanks. The company and franchisees can use it to input water quality data, which the software then processes using proprietary algorithms to provide management decisions.
The company is now integrating the software with hardware, allowing operators to place probes in the water tanks to measure salt levels and temperature for real-time decisions on water quality.
ATI is supported in part by the U.S. Economic Development Administration University Center for Regional Commercialization.