Fishing for returns

In 1887, Theodore Roosevelt and his hunting buddies formed the Boone & Crocket Club to promote fair hunting practices and encourage hunters to conserve wildlife areas that were rapidly disappearing due to unregulated hunting. Roosevelt and his club succeeded in establishing hunting quotas and setting up wildlife refuges, and the country began to shift from hunting to husbandry.

It was around the same time that aquaculture began to take root in the United States, with an eye to farming fish rather than catching them. More than 100 years later, as depleting stocks bump up against skyrocketing consumer demand for seafood, fishermen are beginning to look at conserving resources.

But this time around, the shift is much different: There’s no Roosevelt-style leader, fish “farmers” are involved, and there are billions of dollars in profit at stake.

Fish in the sea
American demand for seafood has risen steadily since the National Oceanic and Atmospheric Administration (NOAA) began collecting data in 1910. While U.S. demand for fresh and frozen seafood dropped slightly from its record numbers in 2006, per capita consumption is still up 168 percent over the last century, and an increasing number of those fish-hungry consumers are showing interest in more sustainably produced seafood.

As a result, large food retailers such as Wal-Mart (NYSE: WMT) and Whole Foods (Nasdaq: WFMI) have adopted sustainable seafood purchasing strategies, driving significant change among producers and demonstrating substantial opportunities for growth in the sustainable seafood industry.

Investors are recognizing the potential, as well. “Thanks to the aggressive and large-scale commitments made by various retailers, a whole host of opportunities have popped up,” says Jason Winship, managing partner of the Sea Change Fund, a venture capital fund focused solely on sustainable seafood investments. “It’s obvious when you look at the depletion of wild fish stocks and continuous growth of demand for seafood that aquaculture will play a role going forward,” Winship says. “There’s been substantial growth in the amount of affordable capital available to aquaculture businesses and much more fish coming out of them.”