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Russ: This is The BusinessMakers Show, heard on the radio and seen online at TheBusinessMakers.com. It's guest time on the show and we've got a unique business because with me now I have Sean Surcouf, Cofounder of Pink Gold Aquaculture; Sean, welcome to The BusinessMakers Show.
Sean: Thank you Russ, thank you for having me very much.
Russ: You bet. Well tell us about Pink Gold Aquaculture.
Sean: Well, Pink Cold - Pink Gold Aquaculture is a leading edge shrimp farm company. We are in the early stages of really shattering the paradigm of how shrimp comes to your table of your grocer.
Russ: Cool. Where do you do this, where's your farm?
Sean: Well our farm is in Panama about eight hours from Panama City. We're in a region called Bocas del Toro in Laguna Cherokee.
Russ: Okay. Now why did you select Panama?
Sean: Well, Panama is, let's just say, forward thinking. They are way ahead of the United States on the whole space of aquaculture; fish farming, shrimp farming. There's shrimp farming there that is terrestrial – on land, there are offshore aquaculture, uh, companies that are already utilizing the space, its right South of us, um, and the Panama Canal is certainly a nice advantage.
Russ: So you mentioned onshore and you mentioned offshore, where is the Pink Gold Aquaculture farm?
Sean: Well Russ, that's really where the paradigm, the shattering of the paradigm starts. Ninety percent of the shrimp that we eat comes from farms from Vietnam, China, Ecuador, Panama – and they're doing a great job. Everywhere you go there's shrimp, but those shrimp, they live in three foot stagnant water ponds, everybody hears the ills of some mass-produced shrimp farms, it's not the most pleasant idea. Well, we're bringing shrimp farming or the actual farm offshore – three miles offshore in crystal clear, blue waters, the ocean is our is the producer of our wave energy there.
Russ: Okay so help us visualize this, you know, three miles offshore, do you have these giant cages out there?
Sean: Yes we do. Most of the salmon we eat is farmed – farm raised salmon. We've taken the same hardware technology that farmers in Chile or Norway use to grow salmon – we've taken that technology, brought it to the tropics and applied it to shrimp husbandry.
Russ: Okay, so describe these kind of cages that you raise them in.
Sean: Yeah imagine a football field cut into about six squares, okay, that's the size and scope; that's what we call a six pack, okay, with nets that go around it making six individual nets that go about thirty feet deep – ten meters deep.
Russ: Okay, so what prevents these cages from, you know, some big luxury liner coming by Panama and messing up the whole inventory?
Sean: Sure, sure, it's a great questions. Well, we are not in shipping lanes. The – in fact, our – our – our cages - our farm is far off the beaten path. We – we're off the grid, the shrimp don't know that, but we're way off the grid.
Russ: But do you – are you actually, you know, do you have rights? Do you have warning flags up? Do you have to pay the Panamanian government? How does all that work?
Sean: Yes, yes and yes. The Panamanian government gives us a concession and it goes by hectare. But to give you the perspective, it's a very low cost proposition to rent for ten years at a time the sea floor and everything that's above it. So we could get the size of River Oaks for a few thousand dollars a year, yeah.
Russ: So, you know, you put them into your cages, where did you get them from to begin with in the process – the life cycle process?
Sean: It's the same life cycle process that is used for the shrimp industry – the shrimp farming industry all over the world, a shrimp hatchery and husbandry practices, there's nothing new about it. Every – there's been a million books written about it, it is done all over the world. And in Panama there's a shrimp industry – a terrestrial on land shrimp farming industry, um, those shrimp hatcheries are happy to sell more of their product to us.
Russ: Okay, so you buy what everybody buys, but you differentiate yourself once you put them in your cages and put them out in the real ocean.
Sean: Yes. The product differentiates itself by growing in a natural habitat; they grow at better rates, they become into – they become a – a more tasty, firmer, better colored product at the end. Um, the cost to raise them is vastly different because we're not spinning diesel engines to get water change over, to, uh, we – we utilize the ocean, uh, to flush our nets – our shrimp swim in the same water never. They're – they swim this – everyday they swim in different water, or every moment they swim in different water.
Russ: Okay. Yeah, and generally speaking I've heard that the industry gets poor grades for these that – that keep and grow the shrimp in sort of an isolated area because all kinds of things can go wrong, correct?
Sean: Yes. What you're number one risk is, is disease and if you have a lot of shrimp, uh, tons and tons of shrimp in a very small space in ninety degree heat in the sun with poor circulation, everything and anything will go wrong. So traditionally – traditional shrimp farmers have used chemicals, unsavory techniques and that's what you see on 60 Minutes and this expose or that. Shrimp farming has been, uh, not very tasty, not very – you know, you don't want to think about where your shrimp come from if it's farmed.
Russ: Okay. So when it's time to actually harvest the shrimp, how – what do you do? How do you catch them?
Sean: Well, all that technology's already built in, it's already been produced. The guys who've done it before us – nice to be the second to come along we've definitely applied new techniques to shrimp because no one's done this in shrimp before, but the first guy who did salmon farming years ago till now, they've really pioneered a very efficient way to use vacuums to suck the shrimp out of the nets as they – you – we make the nets a little bit smaller, they go onto the ice, and then we take these barges with all our shrimp and we bring them to shore and put them on trucks to the processor, processor to the ship, ship to the United States.
Russ: Okay, totally, totally fascinating. Now you've mentioned early stage, how early stage is the company?
Sean: Well, we've had one harvest it went great and we're now about thirty days away from our second harvest.
Russ: Okay. So, when you say it went great I assume that means that your production was great and the product was great, is that right?
Sean: The product was extra great. We brought it to some high on the food chain chefs to vet it out in their kitchens to the seafood distributors. Our, the amount that we produced, um, could be better because we changed some of the techniques – the husbandry practices, so I'd give my – ourselves an A+ on the product, uh, an A- on the volume that we produced.
Russ: Wow, from where I come from that's still straight A's so that's pretty good.
Sean: Well it's not what I'm giving me, I can't wait until my new investors – I'm looking to see what their grade's gonna be, that's the important thing, right?
Russ: Absolutely. So what makes Pink Gold Aquaculture shrimp taste better, look better, feel better?
Sean: If Pink Gold shrimp was the exact same as the shrimp that's produced all over the world, well we're thrilled with that because we consider ourselves a low cost commodity producer but the attributes that our product has, um, when cooked in the highest of high chef, uh, kitchens, um, had incredible taste, incredible texture and brilliant color. Our shrimp was tested side by side with fresh gulf caught shrimp. So, no shrimp farmer in the world would be willing to do that, they're absolutely apples and oranges. The chefs that tasted our shrimp thought that we not only contended but we had some advantages.
Russ: Cool. Okay; all in the taste category too, right?
Sean: Because our shrimp have a natural diet – what shrimp in the wild eat because our shrimp are in the wild, just in cages in the wild, um, they taste like shrimp. The color – what looked like shrimp, bright pink, the texture wasn't mushy like a farm raised shrimp, they were nice and firm; they cooked up really nice.
Russ: Okay. When you say because they're eating in the wild, I mean, do these large nets that you describe have the ability to let the kind of things into the net that the shrimp actually eat or do you actually insert food for them?
Sean: Both. We do use a pelletized food source but we've also created an ecosystem that allows the shrimp tremendous amounts of surface area to just be shrimp. Shrimp are lazy, they just want to be shrimp and just sit around, but it also creates a – a place where nice little yummy crustaceans, zoo plankton and algae to be there for the shrimp to eat. And so what we've done is we've created a buffet within the shrimps' home, an ecosystem that's self sustaining. We believe we're gonna be – we're going to be in the clean tech and sustainable, uh, food space.
Russ: Do the shrimp breed within your nets?
Sean: They don't. Like most farmers you harvest your animals at the point – right at the point of sexual maturity because that's when growth rates plateau off. So our shrimp become sexually mature around – right around the hundred and fifty day mark; fortunate for us that's the time period that they become the size of 2125s – that means – that's the vernacular in the shrimp world 21 to 25 per pound. That's the sweet spot that chefs want.
Russ: Okay. And is that – would that be considered a large shrimp?
Sean: That's the size shrimp that you'll get at anywhere in the white table cloth restaurants for a plate, twenty dollars, twenty-five dollars a plate like a shrimp scampi or a grilled shrimp, yes.
Russ: Okay, so you – you've mentioned white cloth restaurants, uh, have you actually taken the product? You mentioned having some, you know, upper end chefs test it, is that what you did?
Sean: Yes and, Russ, that was one of the most exciting days of my professional career. I – we got a chance to walk into, um, a – I can't wait to disclose who it was because we'll be on their menu – but, a chef that has a lot of brand equity, has a lot of appeal and, I stood there in this chef's kitchen and I watched our product cook next to the gold leader, the gold standard. Fresh caught browns and we did fantastic.
Russ: That's exciting.
Sean: Yeah, yeah.
Russ: What triggered the idea one day for Sean Surcouf to say I'm getting into – to the shrimp farming business?
Sean: Well, it didn't start in shrimp, it started as just a passion for harnessing the abundance of the ocean; and when I say abundance I mean volume and energy. There is very little doubt that we – the ocean can't keep up with our demand for seafood. Mother Nature is saying I can't give any more and our desire to eat seafood is only growing. Growing up in Southeast Louisiana I saw shrimpers going out of business; how could they go out of business if they lived right there on the coast of Louisiana? They had to go farther and farther to catch smaller and smaller shrimp. I didn't know it would be shrimp, I knew it would be offshore aquiculture. I'm type of – I'm a – I'm a dreamer, I'm kind of futuristic and I just saw that there's a need; there's a need to produce more. The supply chain for seafood is broken and it's not keeping up and that's what put me on the hunt, the trail to partner with Biologists who thought the same way that I do.
Russ: So is that the your Cofounders, is that the category you'd put them in?
Sean: Yes yes. My Cofounders are all from – their training is all from RSMAS in Miami – Rosenstiel School of Marine and Atmospheric Science, it's more of a Harvard of fish farming, for aquaculture in the United States and you want to talk – they're – if I'm passionate about it they‘ll blow your socks off.
Russ: Right, really cool. Well Sean, I really appreciate you sharing this, it sounds exciting. Before I let you go though, what do you think – what do you hope the company's like five years from now?
Sean: I, like I said, I'm futuristic. I believe that this company can – has the ability to be on the cover of Time Magazine, I really do. What we can do it infinitely scalable. We're talking about producing a protein source that's healthy, that's cost effective, that can be clean tech, can be sustainable; it's delicious, the people like, um, not just in Panama, uh, it can be done on just about anywhere within the tropics throughout the world. So I believe that in five years this company will be probably having a liquidity event. We'll have our series C, or our next round of financing in 2013 and it'll take us about four years to seriously scale up and that's probably when one of the other large, global seafood produce – producers will – will take us on. And, um, from there I don't know where we go but, with their type of buying power the sky's the limit, or I guess the bottom of the ocean is the limit.
Russ: All right, great. Well I want you to stay connected with us so you can let us know about the progress because this does sound exciting. And thank you so much for coming in and sharing your story with us.
Sean: Well thank you for having me, I appreciate that.
Russ: You bet. That's Sean Surcouf, Cofounder of Pink Gold Aquaculture and this is The BusinessMakers Show, heard on the radio and seen online at TheBusinessMakers.com.