Shrimp are one of the most-consumed seafood globally and are also among the most unsustainable. The shrimp industry’s carbon impact is higher than that of chicken or pork. This is due to three factors: deforestation, feed, and fuel. Shrimp farms are often built by clear-cutting ecologically valuable mangrove forests. Shrimp are often fed fish, which themselves either require carbon to raise or run environmental and social risks to catch, and farm equipment such as generators and boats guzzle diesel.
For all these reasons, The Nature Conservancy (TNC) is focused on making shrimp farms more sustainable. They have a partnership with Bain that’s part of their goal to push the world’s aquaculture to greater sustainability by 2030. TNC and Bain initiated a project to investigate all the ways shrimp are farmed to craft a toolkit to help a broad range of farms reduce their carbon impact.
Developing and testing the plan
Bain’s consulting teams kicked off a case in Chicago to investigate how shrimp are produced around the world. They conducted retail store visits to understand the types of products shrimp producers should be selling and conducted broad surveys to understand how to position them with US consumers. This work produced a broad framework for interventions which the team applied to farms at opposite ends of the spectrum—big industrial farms and tiny smallholder ones.
That shrimp farming model identified three major climate-affecting factors:
Farmland—Are shrimp farms replacing ecologically important mangrove forests?
Feed—How sustainable is the shrimp feed?
Fuel—Are aerators, boats, and equipment diesel-powered?
The consultants aimed to produce an open-source toolkit that any company could apply. “We want to address the world’s toughest sustainability challenges and create systems that show everyone that sustainability is good business,” says Sasha Duchnowski, partner at Bain and the executive sponsor for this project. “We then share what we find because we want others to copy this work.”
The Bain and TNC teams first applied their shrimp farming framework to industrial shrimp aquaculture businesses in Ecuador, where the shrimp farms are so large, they require a helicopter to survey. There, they discovered that scale means the relative carbon impact was naturally lower. However, they were able to reduce it even further by convincing farmers to feed their shrimp deforestation-free soy, purchase solar-powered aerators, and more.
Then, the consulting team found a second opportunity to apply the framework to smallholder shrimp farms in Thailand.
How could Bain change behavior throughout the value chain?
How could Bain bring existing stakeholders together to do this work?
What retailers would be interested in carrying sustainable shrimp products?
Could lessons from Chicago and Ecuador be applied to Thailand?
What was TNC’s five-year vision for this project?
What would have to happen for that five-year vision to come true?
Applying the approach elsewhere
Based on the opportunity in Ecuador, the team focused its expertise on opportunities in Thailand. Consultants traveled there to tour farms and understand the situation firsthand. In Thailand, there are far more shrimp farms, many of them quite small—sometimes just a pond operated by one family. These smallholder farmers had few resources and, because they often cleared mangrove forests, their operations had a higher relative carbon impact. The interventions here would need to be very different.
Bain used the knowledge from its onsite visits plus the global research on consumer preferences to bring various shrimp farming stakeholders together for discussions. They built a fact base on demand dynamics in Thailand and the US, shortlisted interventions to implement, quantified those proposed interventions and their financial impacts, and looked for intervention partners who could bring additional, necessary technology.
Along with partners, they defined a pilot program, analyzed what it might achieve at full potential, and launched it. The data seemed to quickly confirm that by swapping in more sustainable feed and introducing new equipment and practices, they could significantly reduce smallholder farmers’ climate impact.
The Ecuador and Thailand pilots are now underway and have brought together farmers, financial institutions, non-profits, and retailers around three shrimp product segments. If they prove successful, TNC and Bain can repeat this model across other Southeast Asian countries, and elsewhere around the world. The hope is that all this shrimp aquaculture work, from Ecuador to Thailand, achieves the trifecta of good—reducing climate impact, helping farmers, and helping consumers—and that other organizations copy it and transform this market.