【mizuhachi Co., Ltd.】Reclaiming Barren Sea Urchins Into Premium Urchins! Opening Up a 50 Trillion Yen Aquaculture Frontier with a Proprieatry Land Aquaculture System

Reclaiming Barren Urchins Into Valuable Resources: Ocean Challenges and the Origin of Entrepreneurship Experienced in Shakotan, Hokkaido

Thank you very much. My name is Yuto Takahashi, Representative Director of mizuhachi Co., Ltd.

We are a startup creating a sustainable future for the fisheries industry through our proprietary land aquaculture technology.

Currently, a serious crisis of "rapid growth in the seafood market and structural supply shortage" is occurring not only in Japan but also worldwide. In response to the rapid global demand for protein due to population growth, wild catches are on a steady decline. Traditional marine aquaculture is also exposed to natural environmental risks such as red tide, rising water temperatures, and environmental pollution. As a result, there is a rapid shift toward "land aquaculture" as a global trend.

However, traditional land aquaculture faces three major barriers: "high cost," "technical difficulty," and "low profitability." There are almost no successful cases at a commercial scale. Just like early plant factories, it was extremely difficult to make it economically viable.

Therefore, as our initial strategy, we began an approach focusing on the land aquaculture of "barren sea urchins." In fact, a serious environmental problem called "iso-yake" (barren shores) is now occurring in oceans worldwide. Overgrazing by sea urchins has led to the disappearance of seaweed beds, destroying the ecosystem where fish live and feed.

This is the sea in Shakotan, Hokkaido, my hometown. I took this photograph myself while diving in the ocean. The sea is overrun with sea urchins, and the seaweed has completely disappeared. The urchins in these barren shores are "barren urchins" with absolutely no meat (gonads) inside because they have no food. For fishermen, they are a nuisance with no market value, and in fact, they are paying money to cull them.

We purchase these troublesome barren urchins from fishermen at a reasonable price, regenerate them into high-quality urchins using our proprietary land aquaculture system, and sell them to high-end restaurants and overseas markets. It is a new, circular business model that creates value from unused resources and improves the ocean environment while generating revenue.

15x Growth Speed Formulated Feed and a Proprietary Tank System Keeping "Season" 365 Days a Year

What sets us decisively apart from other companies is that we develop all the systems required for land aquaculture in-house, from hardware and software to feed. Our core technologies consist of two main elements.

First is our proprietary "formulated feed." Normally, urchin aquaculture takes a lot of time and cost. However, by using our specially developed feed, we have succeeded in increasing the growth speed of the edible part (meat) to "15 times" compared to wild urchins.

Second is our proprietary "breeding tank system" that can constantly maintain the optimal environment. We can stably keep the water temperature, water quality, and stress-free environment preferred by sea urchins 365 days a year.

By combining these two technologies, we have achieved the stable production and shipment of extremely high-quality urchins with an edible yield of "15% or more" in a short cultivation period of about 70 days. "Edible yield of 15%" means that for every 100g of total urchin weight, 15g or more of meat is firmly packed inside. We can consistently reproduce the same high quality as the top-grade urchins distributed in the market, regardless of the season.

We have already secured numerous pre-sale allocations from high-end restaurants, including Michelin-starred establishments. We also plan to file six patents within this year, building a strong technological barrier.

Targeting a 50 Trillion Yen Fisheries Market with Sea Urchins as a Foothold: A Multi-species Platform Strategy

The current urchin market relies almost 99.9% on wild catches. Looking back at the history of the fisheries industry, once cultivation technology is established—as in the case of salmon and tuna—the market size expands explosively. Amidst the continuous rise in urchin prices due to declining wild resources, our land aquaculture, which can stably supply high-quality urchins at a fixed price and quality throughout the year, holds immense market potential.

Our competitive advantage lies in being the only startup that can consistently develop both the formulated feed and the tank system in-house. In addition, we adopt a "fully closed recirculating system" that highly filters and recirculates a limited amount of water, rather than the traditional "flow-through system" that constantly draws and drains seawater.

Therefore, there is no need to build giant facilities near the sea, and aquaculture can be started inside cities or right next to major consumption areas (urban land aquaculture). The ability to minimize logistics costs and the risk of freshness deterioration during transport is also a major strength.

Furthermore, our vision is not limited to urchin cultivation. Our team includes top-class engineers who have specialized in researching land aquaculture at universities for many years. We already possess land aquaculture know-how and platform technologies for "17 species" of fish other than urchins.

First, we will build a solid business foundation through urchin cultivation, which has extremely high profitability and unit price, and achieve profitability at an early stage. From there, we will horizontally expand the platform to salmon and other premium fish species to target the massive global fisheries market worth 50 trillion yen.

We are currently conducting pilot tests for scaling up production, and in the winter of this year, we plan to start offering the highest quality urchins grown by our hands to general consumers at specific partner restaurants. We hope you will support our challenge to sustain the global food supply with technology from Japan.

Q&A and Feedback

Commentator (Mr. Mori): Mr. Takahashi, thank you very much for the highly passionate presentation. I felt that the business model, which resolves the social issue of marine barrenness while efficiently producing high-end food, is extremely logical and holds high social value.

Let me ask a few questions. First, regarding profitability: in this business model of purchasing barren urchins cheaply, land-cultivating them, and wholesaling them to high-end restaurants, what is the estimated production cost per cycle and the projected profit margin?

Mr. Takahashi: Thank you for your question. Regarding profitability, once the first production module is on track, we project that we can sufficiently achieve an operating profit margin of "20% or more."

Specifically, we assume a tank system with a production capacity of "50,000 units" per cycle as our initial module. Since our system completes one cycle in 70 days, we can run "5 cycles" a year. This means that a single module alone can stably produce 250,000 high-quality urchins annually and ship them at high unit prices, yielding extremely high profitability after recovering the initial capital investment.

Mr. Mori: I see, 250,000 units annually with 5 cycles. To conduct aquaculture on a scale of 50,000 units, how much physical facility space or site area is required? Also, please tell us how you secure space when deploying in urban areas.

Mr. Takahashi: While we are currently validating the exact area in our STG environment, our tank system adopts a multi-tiered structure that maximizes space utilization efficiency. Therefore, compared to traditional flow-through land aquaculture facilities, it can be installed in an amazingly small, space-saving area.

Furthermore, since it is a recirculating system with low drainage processing load, we can start aquaculture in empty warehouses or inside buildings in urban areas near demand centers instead of the seaside. This enables us to deliver at the highest freshness while reducing distribution costs.

Mr. Mori: You overcome space constraints by utilizing multi-tiered systems in urban empty spaces.

As a second question, regarding risks when expanding the business: generally in land aquaculture, there is a concern about the risk of mass mortality of marine life in tanks overnight due to sudden changes in water quality or disease outbreaks. What measures do you take against this technical risk? Also, please tell us if there are any risks on the sourcing side.

Mr. Takahashi: As you pointed out, with the traditional flow-through system that draws seawater as it is, there is always a risk that red tides, pathogens, or temperature changes in the outer sea will directly affect the tanks, leading to mass mortality.

However, our system is a "fully closed recirculating system using artificial seawater." We constantly monitor water quality parameters with sensors and recirculate the water while maintaining a near-sterile environment using advanced filtration. Therefore, the risk of mass mortality due to disease or outer environmental changes is theoretically eliminated. This is the greatest strength of our self-developed system.

On the other hand, the risk we monitor is on the "sourcing side." We currently source wild barren urchins from fishermen. If stormy weather prevents fishermen from harvesting urchins for days, sourcing could temporarily stop. To hedge this, we are dispersing our sourcing cooperatives and bases across multiple domestic regions to minimize the risk of sourcing delays.

Mr. Mori: You prevent the risk of mass mortality by fully controlling the water, and hedge sourcing risks by dispersing sourcing bases. The realism toward commercialization was strongly conveyed. I look forward to eating your urchins at Michelin-starred restaurants this winter. Thank you very much.

Mr. Takahashi: Thank you. We will do our best to deliver delicious urchins to everyone.