$100,000 Accelerator Award to Power Industry Innovations at Pensacola Bay Oyster Company

by / Newsroom Ink on April 28, 2017

Hatchery concept receives top award at 2017 Innovation Awards

PENSACOLA BAY, FL — A failing oyster industry in Florida and millions of oyster lovers across the country stand to benefit from a recent business competition in which $100,000 was invested in a newly forming hatchery in downtown Pensacola.

The Pensacola Bay Oyster Hatchery, an idea spawned from the Pensacola Bay Oyster Company, intends to provide a stable supply of oyster seed to the state’s shellfish ranchers, promote research and development within the industry, and educate Northwest Florida tourists and locals on the economic and environmental benefits of shellfish aquaculture.

The vision is possible, says hatchery founder Donnie McMahon, but the growth of Gulf Coast’s oyster ranching industry, particularly in Florida, has stalled because of a shortage of juvenile oysters, or “seed.”

Donnie McMahon, Pensacola Bay Oyster Hatchery
Photo Credit: Steven Gray Photography

“We have a really unique opportunity here in the panhandle to do much more than just grow oysters,” McMahon said. “As we talk to people in our industry more, the number one need for everyone is the seed, the oyster babies. If you don’t have seed, how are you going to grow your crops? We said, ‘We really have to get this.’”

“If we can help other people get into the oyster business with this, it will be a huge benefit for all,” said McMahon, who studied business and marine biology at Florida State University.

The hatchery concept follows the persistent failures in Florida’s oyster industry caused by water wars, overharvesting after the Deepwater Horizon oil spill, and multiple environmental factors such as drought and changing water quality in key oyster breeding regions.

Photo Credit: Steven Gray Photography

“You can plant pine trees or let them grow naturally, right?” McMahon said. “In the same way, it’s quicker to seed an area and grow clusters of oysters.”

That concept earned the Pensacola Bay Oyster Hatchery the top award — $100,000 — in Florida’s most lucrative business plan competition, the 2017 Innovation Awards hosted by the University of West Florida’s Office of Economic Development and Engagement. Twelve of 61 competing companies walked away with cash and prizes to help grow their businesses. At the heart of their proposal, McMahon’s group explained the innovation and research that will provide clean, high-skilled jobs, grow the region’s economy, and improve the environment.

Their presentation “Laying the Groundwork for a Sustainable Seafood Revolution” described how innovation and research drive success in raising oysters.

“If there is hope for the industry at all, it is in new, human-assisted techniques for raising shellfish. The roots of this revival lay not in skiffs and tongs (the traditional tools of the oysterman’s trade) but in tanks, lab coats and floating cages,” their competition pitch proposal said.

By using a process to ensure that each oyster has three sets of chromosomes (resulting in a “triploid” oyster), Pensacola Bay Oyster Hatchery will produce spat for faster, bigger oysters that are more resistant to disease, when compared to traditional diploid oysters.

Donnie McMahon giving a tour of the Pensacola Bay Oyster Company.
Photo Credit: Steven Gray Photography

According to NOAA, oysters usually reach market size (3 inches or 76 millimeters) three to five years after spat settlement, but in warmer and saltier waters such as those in the Gulf of Mexico, they can reach that size in as little as one to two years.

Sterile (triploid) oysters usually grow faster because they are not expending energy on reproduction, enabling them to reach market size up to five months sooner and to weigh 29-60% more than diploid oysters grown for the same length of time in the same place, according to NOAA.

McMahon’s business partner in the hatchery is Doug Ankerson, founder of Double D Oyster Nursery. He started his company in 2013 after studying off-bottom oyster ranching techniques at Auburn, and has since sold more than 12 million oyster seeds.

Currently, most Florida oyster producers rely on seed from two university-supported hatcheries, at Auburn (AL) and Louisiana State. Those publicly funded hatcheries have an obligation to ensure that the needs of ranchers within their own borders are met first. In the event of future shortages, this could present problems for Florida producers. Additionally, the university facilities do not have the capacity to meet existing demand or the desire to scale as the industry grows.

“We would gladly defer to private production,” said Dr. Bill Walton, known as “Doctor Oyster” at Auburn University. “We produce seed because there is a need, not because it’s a part of our mission.”

Demand outpaced Auburn’s production this year by 200%, McMahon said.

The hatchery plans to build public access into the facility design and to partner with Pensacola Bay Oyster Company on tours so visitors will be able to trace their meal’s entire journey, from hatchery to nursery to ranch to plate, without leaving Pensacola city limits.

The hatchery brokered a deal to use an abandoned concrete dock behind the Fish House restaurant and Atlas Oyster Bar on Barracks Street for its water operations. The dock, which was largely destroyed by hurricane and never rebuilt, will provide an ideal location for floating upweller systems, water quality monitors, and other necessary components for land and water operations.

“We’ll use maybe one hundred feet of that dock, and turn the dock house into a monitoring station,” McMahon said.

The oyster breeding concept beat an emerging baby brand, a robotics toy company, an eco-friendly smart water cooler, a manufacturer of respiratory escape systems, and an app that motivates kids to complete chores, among others.

The five judges for the business competition were: Joel Smith, chief technology officer at AppRiver, Kathy Chiu, managing director of the FAN fund in Orlando; Vernon Niven, president of Buy Like Me; Kathy Anthony, Northwest Florida chair for Vistage Florida; and Tommy Tait, president of the Pensacola market for Summit Financial Enterprises.

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