May 26, 2022

This paid piece is sponsored by South Dakota Biotech.

The pieces had been put in place for a global product launch, and Mark Luecke was adding up some serious frequent flier miles.

“We were starting to make a big push in the global aquaculture marketplace,” said Luecke, CEO of Brookings-based Prairie AquaTech.

It was the first quarter of 2020. Prairie AquaTech, which was formed in 2012 out of research at SDSU, uses a natural, biological process to convert soybean meal to a high-quality ingredient fed to fish and shrimp.

The business already had commissioned a 30,000-ton-per-year plant 5 miles west of Brookings in Volga to ramp up production of its protein ingredient, which is then sold to manufacturers who distribute feed to aquaculture producers.

“We had done a 30X scale-up from an engineering standpoint to get from pilot capacity in Brookings to Volga, and that’s a big number,” Luecke said.

Which meant it was time to sell the product, called ME-PRO or Microbially-Enhanced Protein.

“We were traveling to Latin America, Europe, Southeast Asia. We were everywhere, week after week,” Luecke said.

“And then everything completely shut down.”

Fortunately, the relationships he had been building around the globe at the beginning of 2020 translated to virtual conversations that led to sales.

“The personal relationship was started before we couldn’t have a personal relationship,” he said. “And we spent the next six months trying to work out deals on videoconference. We were fortunate it worked out the way we hoped.”

In the U.S., young swine and trout customers “very quickly picked up on the product,” he said.

Then came Atlantic salmon customers in Europe. Then shrimp feed customers in Latin America.

“By the summer of 2021, we had sold out of the production capacity of the plant,” Luecke said.

The success of Prairie AquaTech, a company serving the aquaculture industry from the landlocked state of South Dakota, shows the potential to support the industry here, said Joni Ekstrum, executive director of South Dakota Biotech.

“Prairie AquaTech is an incredible, inspirational startup success story for us,” she said. “From showing the research capabilities of our universities to the commercialization ability of our state, this company proves that innovating in agriculture can connect South Dakota to customers far beyond its boundaries. In many ways, they are just getting started.”

That’s likely true, as Prairie AquaTech recently was named Small Business Exporter of the Year by the Small Business Administration South Dakota District Office.

“We’re exporting 75 percent of our production capacity,” Luecke said. “We work with customers from Norway to Turkey, Panama, Ecuador, Vietnam, and they’re all repeat customers. Many buy each month, and that validates that the product is working.”

It’s not easy connecting customers with their orders, though, particularly given costs and constraints related to shipping containers.

“We’re putting it on a truck and then on a rail and then on an ocean vessel,” Luecke said. “That’s how it ends up at the port of destination, which is a 60- to 90-day timeline from when it leaves South Dakota to when it gets to the customer, and that’s twice as long as it used to be, and it costs four times as much.”

The award from the SBA was especially timely, he added.

“That recognition was crucial for our team members who have been struggling with this challenge for the last 18 to 24 months,” he said. “We’ve learned to adapt, but it hasn’t gotten easier or cheaper.”

Prairie AquaTech has grown its team to more than 75 people and is “hiring aggressively,” Luecke said. “We’re growing very rapidly.”

Aquaculture producers are finding that using Prairie AquaTech’s ME-PRO is allowing them to increase the stocking density in their ponds because the feed is so digestible that fish and shrimp aren’t polluting the water after they consume it.

“One producer in Panama has been able to go from stocking 15 shrimp per square meter to 700 shrimp, so it’s an order of magnitude improvement,” Luecke said. “As consumers, think about what that means in terms of price per pound at the grocery store, and suddenly we’re able to talk about shrimp costing the same price as chicken per pound, so that’s a dramatic impact we didn’t expect.”

The company is looking specifically for talent with fermentation experience, where it has a patented process for the fermentation of plant-based proteins. While it’s been used in creating feed for aquaculture, there are numerous other applications.

Food for dogs and cats is one of them that Prairie AquaTech has developed.

“We got exceptional results,” Luecke said. “A lot of things we learned in weaned pigs and salmon and shrimp produce the same health benefits in dogs and cats. Our fermentation process reduces the allergens you sometimes find in pet foods that create skin and GI problems.”

The technology also can apply to human foods, which increasingly are using plant-based ingredients in everything from snacks to cereals.

“A lot of companies are looking to Prairie AquaTech for help in designing ingredients, and that’s what we do really well,” Luecke said.

The next step is to continue research and development while expanding production capacity, he said.

“Volga is a perfect place because we have access to great raw material – South Dakota soybeans – and we did some overengineering, so we have the opportunity to double or triple the capacity there,” he said.

“We’re not even scratching the surface. We’re a tech company with our fermentation platform, and one of the things we’re trying to do is really seed the market for growth and show animal owners and veterinarians the value that using a high-quality ingredient like ours can create value for the animal and the production system.”

To learn more about the state’s growing biotech industry, click here.