BlueNalu predicts 75% profit margin for its cultivated seafood

Cell-based seafood maker BlueNalu says it can make a 75% gross profit in its first year of producing cultivated bluefin tuna toro when it operates at scale in its planned commercial facility.

It will take some time for the company to get there. Lou Cooperhouse, co-founder, president and CEO, estimates that the commercial facility will begin production in 2027, and BlueNalu needs to receive approval from the FDA to be able to make cultivated meat for general consumption. But, according to a recent techno-economic analysis looking at the company’s full cost and outcome perspective, they can reach that profit margin with tuna grown from cells that is sold at the same price as that coming from fish.

“That gross margin is very achievable and attainable at price parity,” Cooperhouse said.

This kind of breakthrough has been central to the mission of BlueNalu from the beginning, Cooperhouse said. The company was not founded to prove that cell-cultured seafood could be made, he said. Instead, it was founded to find areas in the market where cell-cultured seafood could make a difference — increasing access to sought-after premium seafood products that are sustainable, free of environmental contaminants, and come from a predictable supply chain with consistent prices.

“The company was really founded not on proof of concept, but proof of scale — and how we can identify methodologies that would ultimately enable large-scale production,” he said.

BlueNalu’s planned commercial facility, which Cooperhouse said they are at the very beginning stages of planning, will be able to produce up to 6 million pounds of seafood a year, the company says. It will be about 140,000 square feet, with eight 100,000-liter bioreactors. And the company’s newest breakthroughs will facilitate this level of efficiency and profitability, said Chief Technology Officer Lauran Madden.

More cells, less time

A development Madden said is key to reaching that high profitability margin is its development of cells that can grow in a single-cell suspension, completely on their own in a bioreactor, Madden said.

Cells that can grow on their own can develop better with fewer processing steps, better toleration of pressure from all sides and easier transitions between growing vessel sizes, she said. There is no concern about clusters of cells that need to be broken apart. And there is no need for microcarriers, which are small balls placed in a bioreactor that provide surfaces for cells to grow on. With these cells, each bioreactor has the capacity produce more muscle cells.

BlueNalu’s cells are all non-GMO, so they were not altered in any way to make them grow in suspension. Madden said this is the result of a lot of work finding the right cells and the right processes. BlueNalu works with a lot of different cell lines, she said.

“I think of it a little bit as like Olympic trials, where you have a lot of contestants and you use different technologies to assess” how they perform in different environments and processes to get the behavior and observable characteristics that you want, Madden said.

A new approach to a seafood delicacy

Bluefin tuna toro, the fatty belly portion of the fish, is what BlueNalu is developing as its first product.

While the company had previously said it would first make cultivated mahi-mahi, Cooperhouse said conversations with chefs and international distribution partnerships led them to focus on the tuna delicacy. While mahi-mahi is popular in the United States, it is not as sought after in Asia or Europe, where BlueNalu has distribution and marketing partnerships. Bluefin tuna toro is popular everywhere, Cooperhouse said, and the potential of a steady cultivated supply of the meat excited chefs.

And there’s another reason it’s a good first product: It gives BlueNalu a chance to show off its technology, Cooperhouse said. Madden explained that to make production as efficient as possible, BlueNalu wants to be able to use just one cell type to make the fatty tuna belly. And to do that without having to separately grow fat cells, they developed “lipid loading,” which adds fats and other lipids directly to the muscle cells. Madden said this helps recreate the exact nutritional profile of bluefin tuna toro from an animal, with omega-3s and saturated and unsaturated fatty acids.

Bluefin tuna toro is unique, and Cooperhouse said their cultivated product will show that BlueNalu is working to genuinely recreate what people love about seafood.

“[It is] a very high sensory product that we’re excited to bring forward as our demonstration, our commitment to really delicious, great tasting seafood,” he said.

To develop products after the cells grow, BlueNalu currently is not using scaffolds — structures on which cells grow into formats similar to meat consumers are familiar with. Madden said they are taking the cells and using a process similar to extrusion to create them in a form that consumers are used to. The products BlueNalu is developing are 100% cultivated cells and have no additional components.

More swimming to go

While these announcements are good news for BlueNalu, the company needs to get regulatory approval for its cultivated seafood from FDA in order to even get close to making any profits. BlueNalu has been working with federal regulators for three years, Cooperhouse said, and he feels good about the progress that has been made. There are no published regulatory standards for cultivated meat or seafood so far in the United States, and no cultivated meat companies have received the green light yet.

BlueNalu is also pursuing regulatory approval in several other countries, including nations in Asia, Europe and the Middle East, Cooperhouse said. The company is not currently working on manufacturing facilities in other countries, but has initial plans to export its seafood to other nations where it can be sold.

There’s also a matter of facilities. BlueNalu just moved into its Southern California 38,000-square-foot pilot facility and innovation center earlier this year. Cooperhouse said this is intended to be where it develops and optimizes new products, but it can produce a small amount of product. Actual site selection and work on the commercial-scale facility will come in the next couple of years.

BlueNalu has developed cell lines for eight different species of fin fish, and Cooperhouse said they have big plans to change the fine seafood market.

“Our goal is to ultimately enable [restaurant operators] to displace as many [traditionally fished] products as possible, and make many more applications from our bluefin tuna and other species to follow on those menus,” he said. “It’s all about that premium food service solution that we’re really targeting here.”