There are many startup sectors contending for the recognition of being the industry that leads the financially beleaguered state of Michigan out of its post-auto industry struggle. Shrimp farming isn't one of them.
That hasn't stopped Russ Allen, who earned his sea legs in the 1970s in Ecuador, where he helped establish the region's shrimp farming business. In his first year there, Allen helped export 100,000 pounds of shrimp. A decade later, Ecuador was exporting 210 million pounds a year.
He headed to Belize in 1981 and pioneered the process there, launching what ultimately became Belize's biggest industry. Then, after 30 years abroad, he went home to Michigan in 1992. At the time, a legal structure for aquaculture didn't exist in the state. In 1996, with the help of then-Gov. John Engler, Allen helped pushed through Michigan's first aquaculture development act.
Allen's Shrimp Farm Market, situated in Okemos, Mich., just east of the capital of Lansing, harvests approximately 200 pounds to 400 pounds of shrimp per week. The market--which sells peel-and-eat shrimp, shrimp burgers, shrimp spread and shrimp salad to local consumers--is secondary to the farm itself, which remains in the research and development phase.
"We produce and breed as much shrimp as we do to do our research and sell in the market," he says. "Two main things in the R&D part of our farming is genetic improvement of stock and developing new feed formulations."
Shrimp farming, according to Allen, is more economical than producing pigs, cattle or chickens. He believes the U.S, which imports more than 1 billion pounds of shrimp per year, could monopolize the industry, thanks to the low cost of feed and high-velocity production system his farm is refining.
"Growing shrimp can be cheaper in Michigan than any other place in the world, yet China is the leader," he says. "We have cheaper feed costs than anywhere else in the world, and our high biosecurity measures mean we keep more shrimp alive than other countries and maintain a much higher level of production."
Allen has sunk more than $3 million over 15 years toward his goal of becoming the world leader in shrimp farming--if he can navigate the bureaucracy. A spokeswoman for the Monterey Bay Aquarium's Seafood Watch program in Northern California calls shrimp farmed in the U.S. "a good alternative," but Allen still fights an uphill battle. He plans to raise an additional $10 million from private investors. "My entire struggle has been to meet the legal requirements to raise capital to create a new industry," he says.
Allen regularly hosts teams of consultants who help him constantly refine his shrimp farming practices. Rooms in the facility have temperature and light control, scaffolding, tanks, pumps and carefully managed mating and feeding systems. But he is mum on his farming methodology for competitive reasons.
"We've developed the world's leading technology to do this," he says, "and we've given enough free stuff to China--we don't need to give any more."
This story appears in the March 2010 issue of Entrepreneur. Subscribe »
