Challenge

A Native American Indian Nation in California, with direct access to the Pacific Ocean and protected usage rights, received funding through the Tribal Tourism Grant Program (TTGP) to explore the feasibility of establishing an Abalone Research Center & Aquaculture Facility. The TTGP-funded study aimed to assess whether such a venture could enhance the quality of life for Tribal members and the broader community by increasing revenue, creating employment opportunities, and boosting economic activity in the region.

Capacity Consulting, Inc. was engaged to evaluate the potential scenarios, weighing the advantages and disadvantages, and to determine the technical and economic viability of the proposed abalone aquaculture facility and research center. This analysis was critical in providing Tribal leadership with the insights needed to make informed decisions about the future of the project.

Opportunity

Abalone is of great cultural and ancestral relevance to the coastal Tribe. Abalone occurs naturally in the nearby ocean and can be harvested quite easily for personal use among

Tribal Members. Commercial harvesting is prohibited by the state of California, and only a few abalone aquaculture companies exist in the state. Additionally, due to climate change, kelp forest loss, and overfishing, all West Coast abalone populations are at risk of extinction.

The Tribe sought to establish a non-profit research, education, and advocacy center supported by a for-profit aquaculture farm, with the goal of revitalizing the endangered species, rebuilding depleted populations, and ensuring sustainable commercial harvests.

Process

Capacity Consulting, Inc. leveraged its network of industry experts, including California abalone business owners, leaders from the California Aquaculture Association and Proquaculture, Inc., and engineers to provide the Tribe with essential industry intelligence. The team conducted primary and secondary research into aquaculture and aquaponics, market and geographical analysis, and reviewed government regulations. This comprehensive approach included on-site visits to understand the unique opportunities and challenges of the proposed facility, resulting in the development of business plans and financial projections for feasible operations.

Recommendations

Abalone farming is a capital-intensive business because it takes abalone three to four years to reach marketable size, so a business must have sufficient cash reserves to cover all expenses until the first harvests and sales are realized.

Capacity’s feasibility study and financial projections offered the Tribe a realistic outlook on return on investment and growth potential. The goal was to provide transparency and realistic expectations for this capital-intensive venture. To move forward, the Tribe was advised to hire a skilled general manager to oversee the planning and development of the abalone farm facility, guided by Capacity’s system recommendations and financial insights.