In what could be an underwater gold mine, Orlando-based Darden Restaurants plans to create the world’s largest lobster farm in Malaysia, allowing it to sell the crustaceans in Asia and supply them to its chains such as Red Lobster.
The lobster farm would allow Darden to partially shield itself from rising seafood prices while creating a new revenue stream. But lobster farming, a field in its infancy because it has been notoriously difficult, could also keep prices lower for consumers and pose tougher competition for fishermen.
"If there’s a way to do lobster this way, it increases the supply of lobster," said Mark Kalinowski, a restaurant analyst for Janney Capital Markets. "It doesn’t necessarily increase the demand for lobster. All else equal, the cost of lobster drops."
Darden says it thinks its facility will be the world’s first commercial lobster farm.
Through a subsidiary called Darden Aquafarm, the company will work with a Malaysian group to build the 23,000-acre production facility. The farm will employ 12,000 workers and eventually churn out 40 million pounds of lobsters each year. That’s about $1 billion worth.
Darden says it will take a while to get to that point — at least 2029. It will take several years to start producing food and at least a decade before lobster sales have a big impact on the company’s bottom line.
Lacking big claws that their counterparts from Maine have, the spiny lobsters Darden will grow look different from what typically comes to consumers’ minds. So Darden will still use the North American species for its Red Lobster tanks and on the plates of diners who order whole lobsters. Darden already uses spiny, or rock, lobsters from the wild for some other dishes.
Whether there’s any noticeable difference in the taste depends on whom you ask. Spiny lobsters’ texture can get more rubbery if it’s not prepared properly, said Tom Matthews, an associate research scientist with the Florida Fish and Wildlife Conservation Commission.
Still, Maine lobster fishermen worry about competition and the possibility that the price of their catch could get driven down.
"It does put additional supply out there, and when you have oversupply, you can see a softening of the price," said Patrice McCaron, executive director of the Maine Lobstermen’s Association. "It’s definitely going to be something we’re going to have to contend with over time."
Aquaculture proponents say lobster farmers and fishermen can coexist.
"There’s a growing world demand for lobster products of all types," said Bill Herzig, Darden’s senior vice president of purchasing and supply-chain innovation. At the same time, he said, overfishing and climate change are threatening the supply.
The health of lobster populations around the world varies by region, according to the Monterey Bay Aquarium’s Seafood Watch program.
Darden has experimented with lobster-aquaculture projects in other countries. The company said it decided to base its farm in Malaysia because tropical storms are infrequent, lobsters there reach maturity relatively quickly and the government is encouraging toward economic development.
Most aquaculture operations take place overseas, particularly in Asia, where experts say costs are cheaper, regulations aren’t as stringent and citizens aren’t as wary about using waters for fish farms.
Growing the lobsters in Malaysia also gives Darden easier access to the Asian market it plans to supply.