The Saco Seaweed Company hopes to raise $3.5 million for production upgrades while striking deals with new clients backed by celebrity Tom Colicchio.
Atlantic Sea Farms filed a private financing filing with the Securities and Exchange Commission on September 9. 23. A year ago, Atlantic raised $3.1 million in venture capital to help cover the cost of building a 27,00-square-foot processing facility in Biddeford. That’s four times the size of the company’s previous space in Saco.
The company offers a variety of gourmet products from Maine seaweed. The company started out as a mussel and kelp farm, Ocean Approved Inc. but since 2018, under the direction of CEO Briana Warner, Atlantic has expanded and now has 27 cooperative kelp farmers in the state, mainly in Lobster fishermen working off-season. These harvesters brought in 970,000 pounds of kelp this year.
It’s unclear what the new funding round might mean.
Atlantic Sea Farms spokesman and chief marketing officer Jesse Baines said the company plans to use the proceeds to expand the market and innovate at the Biddeford facility, without giving details.
However, on the day of the SEC filing, Atlantic announced a partnership with Plant Based Seafood Co., a Virginia company that makes seafood-like products under the Mind Blown brand. Atlantic Sea Farms kelp will be added to the brand’s new pink shrimp and pink scallop offerings this month, and to its crab cakes in 2023.The products will initially be available in more than 300 Sprouts Farmers Market grocery stores in the U.S.
Mind Blown’s products have always been in the spotlight, winning numerous industry awards. This spring, Colicchio, a judge on the Bravo TV network’s “Top Chef” series, invested in the company.
Sustainability of seaweed
Atlantic and Plant Based are both women-owned companies committed to environmental sustainability and ocean health.
The partnership is also an example of how Atlantic Ocean Farms is building demand for Maine-grown seaweed among environmentally conscious consumers. Kelp improves the water quality in the area where it grows by absorbing carbon and other nutrients that can lead to algal blooms, and by reducing the acidity of the water in the area where it grows.
“Other brands are very eager to have a positive impact through their own purchasing decisions,” Baines said. “Atlantic Sea Farms really comes out on top as a partner who can help them do that.”
Using domestic seaweed is emerging as a way to improve the social credibility of some companies, and labelling Maine seaweed as “renewable” is part of this trend. Atlantic Ocean Farm is working with the Bigelow Marine Science Laboratory in East Boothbay to quantify the potential of kelp to mitigate climate change and ocean acidification.
Nichole Price, director of the Bigelow Seafood Solutions Risk Research Center, said Atlantic Ocean Farms is working with the center and partners on several studies. One is to study how kelp reduces what Bigelow and the Island Institute call the “halo effect” — weakening shells in mussels and other shellfish due to ocean acidification.
“This study is undergoing peer review and has not yet been published, but we are fairly confident in the results,” Price said. “Three years in a row on a farm in Maine, we were able to detect this halo effect. When we transplanted mussels to grow inside a kelp farm, their shells became thicker and stronger.”
These studies are now being replicated in Alaska and Norway.
In other studies at Atlantic Ocean Farm, Bigelow is developing genetic tools to verify how much carbon kelp beds sequester in marine sediments and which qualities of kelp beds contribute to their ability to sequester carbon. The lab is also working with Atlantic Ocean to study how adding seaweed to animal feed reduces the amount of methane emitted by animals.
Substitute for Lobster
In addition to the environmental benefits of kelp farming, Warner was attracted by its potential economic benefits to coastal communities. Before joining Atlantic, she served as director of economic development at the Rockland Island Institute, supporting the resilience of coastal communities. There, she became concerned about the state’s reliance on lobster, which she called a “monoculture” in an interview with Talking Food in Maine.
“We’re at an urgent and critical moment on the coast of Maine right now, and we need to diversify,” Warner said in an interview last year. “Lobster will be there in 30 to 40 years, but not like it is today. We are now Diversification is needed and people have capital and they have water businesses.”
She sees that the Maine owner-operated lobster fleet is perfect for transitioning to winter growing kelp because they already have a boat and some necessary gear.
When she became CEO of Ocean Approved, she set out to form partnerships with fishermen, persuading them to get involved in kelp by providing them with seeds, training and technical assistance in obtaining leases. To further boost the deal, she also guarantees that Ocean Approved will buy all the kelp they can produce.
The company works to quickly build demand for seaweed grown in Maine. Ocean Approved has partnered with restaurants to include Maine kelp as a healthy ingredient in their menus. Sweetgreen, Chef David Chang, Legal Seafood and fast-food chain B. Good are all on board. Then COVID hit, so Ocean Approved turned to retail, changed its name to Atlantic Sea Farms, and developed a line of consumer products. It includes kelp nuggets for soups and seasoning nuggets for smoothies, fermented kelp salad and seaweed pickles, and the package features the story of a Maine kelp farmer.
Guaranteed purchase of kelp from all partners is an important move. A 2017 benchmarking study by the Maine Aquaculture Society found that only one in six seaweed farms was profitable, so it was initially difficult to get people interested.
“I think it’s critical that they guarantee purchases from cooperative farms, especially for new farmers who are learning,” said Sebastian Bell, executive director of the Maine Aquaculture Association. “By guaranteeing purchases, Atlantic Sea Farms significantly reduces the risk of farmers investing time and money not being able to sell their product.”
The 2017 study was done when the industry was just getting started, but the profitability of kelp farming has steadily improved since then, he said. The association is now conducting a new study, the results of which should be released by the end of the year.
“I think it’s clear that well-run farms are profitable because more and more working seaside families are getting involved,” Bell said. “If it’s not profitable, they’re not taking a risk.”
Baines agreed, noting that a co-op farmer at Atlantic Ocean Farms made six figures last year on a four-acre farm. But kelp farming is currently mainly used for supplemental income.
“It doesn’t replace the income they get from fishing, but it does cushion the blow of bad seasons,” she said.
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