by Ryno Postma, www.hydrotowers.org

Making money should not just be an act of doing, it’s an act of passion. Steve Jobs once said: “The only way to do great work is to love what you do”.

The combination of your passion with current market trends equals growth opportunities (which translates to money). In this article we shall touch on different aquaponic market trends, evaluating each trend in the following categories: Pros, Cons and Sustainability. Your passion should drive your choice, that will be the difference between you and your competitor, the difference between success and failure!

High-value crops & niche farming

High-value crops can be defined as crops that are grown year-round with a relative to high sales price. Unlike commonly grown crops like lettuce, specialty crops are not widely grown and bring higher prices for growers. Your geographical location and consumer base will determine which crop(s) will be considered as high-value crops.

Pros

• Higher gross profit margin(s)
• Fewer competitors

Cons

• Nutritional demands differ between vegetables and herbs – consider nutrients per group of crops
• Your market is defined which implies greater risk

Sustainability

Highly sustainable when you have an established customer base.

Example(s)

Herbs (such as basil, arugula, and coriander) and certain vegetables (such as brinjals, cucumbers, and heirloom tomatoes) usually fall in this category.

Aquaponic training classes

Aquaponic training courses have become synonymous with aquaponic farms. These courses / classes provide the general public with a basic understanding of aquaponics, and in some cases a more technical understanding.

Pros

• Additional revenue stream (by-product of aquaponic farming)
• Great Return on Investment (ROI); initial time investment to create course material far outweighs subsequent time investment(s)
• Brand awareness
• Keep in touch with industry developments
• Maintain knowledge and skills used in aquaponic farming

Cons

• Marketing campaigns; this might be a daunting task for some farmers
• Your farm might not be equipped for entertaining large crowds; this equals additional costs which reduce profits.

Sustainability

Most commercial aquaponic farms have entered this market. The aquaponic market is experiencing significant growth which allows for everyone to enter this space successfully, albeit with some challenges. Be careful to build your business model around this trend as long-term sustainability is questionable.

Example(s)

Company A holds aquaponic training courses at Company B which is not too far from their farm. Company B is responsible for the marketing campaign, food on the day, the equipment and ensuring that the facility is spotless on the day.

Company A revenue                            $200 pp

Company A expense (Company B)      $135 pp

Company gross profit                           $ 65 pp

Further processing

Food processing combines raw food ingredients to produce marketable food products that can be easily prepared and served by the consumer. The goal of food processing is not only to add value to your produce, but to protect and prolong their shelf-life.

Pros

• Adds value to crops by processing
• In some cases, by export, earns valuable foreign exchange
• Is a major source of employment
• Provides opportunities for import substitution
• Protects and prolongs the shelf-life of your produce
• Benefits many small-sector players

Cons

• Additional working capital to be incurred; such as equipment, labour and packaging
• High operating / fixed costs, including the cost of cold rooms, storing, and transport
• Small-scale farmers do not have the advantage of economy of scale

Sustainability

Highly sustainable

Examples

• Salad mixes including herbs andgreen leaves
• Canned pet food products made from aquaponic fish
• Pickled or dried foods
• Spicy microgreens

Design aquaponic systems

For those who have an in-depth understanding of the micro-biology of aquaponics (the bacteria, aquaculture and plants), this trend provides for an additional revenue stream. The business model behind this trend is ‘tricky’ as there are many established and well-known system designs freely available on the internet.

The design package is where the value lies – what value can you add that your customer won’t find anywhere else? You then have to consider the different branches under this trend, do you want to provide digital solutions (DIY systems), be involved in the construction process (additional fees to be earned here) or even provide training on designing principles?

Pros

• Additional revenue stream (by-product of aquaponic farming)
• Great Return on Investment; a once-off time investment to design your system, including additional value-added benefits
• For aquaponic farmers, experience from your own system provides for more efficient designs
• Empowering aquaponic farmers to understand the micro-biology behind aquaponics
• Income from digital assets is passive in nature

Cons

• To the extent that your system may not function as intended, you could be held liable for the product / service that you provide
• This creates additional admin where customers come back with questions / queries – additional consulting fees cannot always be charged
• It takes time and energy away from your own production system

Sustainability

Highly sustainable

Example(s)

United States of America: Nelson and Pade Inc.

South Africa: www.ksba.co.za

Restaurant

One of the prestigious restaurants in South Africa that farms their own produce using aquaponic growing methods made the following statement: “It is an attempt to create a restaurant which in future can become completely self-sustainable by creating an entire “ecosystem” from the fish and vegetables to the livestock, that suits our idea of responsible, conscientious farming (and restaurant) where even ‘waste’ is turned into a functional part of the cycle.”

The statement sums it up, the synergies and cost savings provide for a highly sustainable operation that can withstand economic challenges.

Pros

• Additional revenue stream (by-product of aquaponic farming)
• Synergies & cost savings provides for higher profit margins
• Brand awareness

Cons

• Your brand can sustain damage if your consumers find fault with food or service
• Restaurants are known for the long hours: late nights and weekends are when you make your money
• Restaurant profitability is likely to grow over time, depending on factors like your location
• High starting capital required

Sustainability

Highly sustainable

Example(s)

Restaurant that serves aquaponic produce: Fermier in Pretoria, South Africa

Diversification

Diversification is a business strategy to enter into a new market or industry in which the business doesn’t currently operate, while also creating a new product for that new market. This

includes aspects mentioned above, creating digital assets for an example, but I want to focus on produce diversity.

This trend should be pursued with a specific strategy where you limit your risk and invest what you can afford to lose, consider following the same principles that we set out for aquaponic beginners: www.proagri.co.za/en/how-to-get-started-with-aquaponics

Pros

• Highly profitable
• Business risk is reduced through diversification
• Stabilises farm income
• Is a major source of employment

Cons

• You might not have knowledge of the industry that you want to pursue; this translates to time and / or money

Sustainability

Highly sustainable

Example(s)

Grow Gourmet and Medicinal Mushrooms

Farm Snails for Profit

Private Fishing Lakes (consider using tilapia)

Cost savings and synergy benefits

Synergies are often overlooked in the pursuit of increasing profits, and in most cases, it’s an easy and effective tool for increasing profits. This requires some clever thinking, evaluation of all possible outcomes and decisive decisions. Refer to the example for practical guidance.

Pros

• Immediate cost savings
• Cultivating an ‘out-of-the-box’ culture
• Synergies and cost savings provide for higher profit margins

Cons

• This could be time-consuming

Sustainability

This trend alone cannot drive the sustainability of your venture, along with other factors this trend does however promote sustainability

Example(s)

Nile tilapia is usually farmed in aquaponic systems. Red breast tilapia (Rendalli) grow slightly slower compared to their Nile family members, but their average fillet size is between 48% and 53% of their total body weight, higher than the industry norm. The Rendalli tilapia also has a greater tolerance for plant-based diets; you will save costs when incorporating organic plants into their diet (consider adding moringa and duckweed) and could benefit from their fillet size if you are targeting restaurants.

This article was published on https://hydrotower.org. Visit the site for many more interesting articles on sustainable living.