With new name, business rooted in aquaculture finds traction in multiple markets
South Dakota’s state soil became the foundation for a name designed to carry one of its most successful ag startups into the future.
It’s called Houdek – both the state soil and the company that is building its business truly from the ground up.
“We were looking to establish a brand that connected with our vision of better plant-based ingredients for a better life,” co-founder and CEO Mark Luecke said. “What better way to honor the farmers in South Dakota who are growing the crops we use to make these game-changing ingredients?”
Houdek encompasses the growing business lines of the company that began as Prairie AquaTech. That name still lives on in its aquaculture operation, which has gained international acclaim for its use of fermented plant protein to have a positive impact on the global aquaculture industry.
“Even though they are no longer a startup company, I think it’s fair to say that Houdek is just getting started,” said Joni Ekstrum, executive director of South Dakota Biotech. “We’ve been proud to support this company from the start, and I think as South Dakota begins to understand the incredible potential here, it will be clear why Houdek is positioned to do such big things.”
Prairie AquaTech, which was formed in 2012 out of research at SDSU, uses a natural, biological process to convert plant-based material, such as soybean meal and dried distillers grain, into high-quality ingredients fed to fish and shrimp. Aquaculture producers are finding that the ingredients in ME-PRO are so digestible that fish and shrimp aren’t polluting the water after they consume it.
“That’s a value proposition throughout the world, whether it’s in the fjords of Norway or the estuaries of Ecuador – everyone, everywhere is focused on the quality of our water,” Luecke said.
Houdek’s manufacturing base in Volga and its research and development operations in Brookings are where most of the nearly 75-person team is based. However, other corporate staff live in Sioux Falls and around the country.
“We have team members in St. Louis, Houston, Washington, D.C., and other locations, so it’s validating that our vision and our execution has attracted talent from across the industry, and we’re able to bring in the right talent wherever it’s located,” Luecke said.
Prairie AquaTech has launched a broad marketing campaign emphasizing the benefits of fermented plant protein for animal health and resulting profitability to producers.
“We’re able to make aquaculture producers more money,” Luecke said. “Cleaner water is better for the environment and for the fish or shrimp farm. Producers have better animal health and survivability, which increases the profitability of the farm. We are currently selling to blue-chip aquaculture feed manufacturers all over the world, and that continues to be our lead business.”
However, other market segments also are gaining traction for Houdek.
The benefits achieved in fish and shrimp feed with Houdek are translating to dogs and cats, opening up big opportunities with major pet food manufacturers.
“After the pandemic, a lot of people adopted companion animals, and they’re treating them like family members more than ever before, so they’re really focused on the companion’s diet,” Luecke said. “And there’s a major trend to increase plant-based ingredients in those diets. But one problem is that plant-based ingredients have anti-nutritional factors; fermentation eliminates those factors.”
The resulting pet food ingredient, named Protéger, is being tested by the world’s largest pet food manufacturers, Luecke said. “The name Protéger is French for ‘protect,’ so we look at the ingredient as a way to protect your companion animals, and we’re seeing a lot of interest in terms of the sustainability of our product.”
Testing is being done to demonstrate that it’s nonallergenic. The effort resulted in Houdek becoming the state’s first company to be certified as a Safe Quality Food, or SQF, site, an industry designation that allows it to enter the growing pet food marketplace.
At the same time, Houdek is beginning to leverage its fermentation science for use in human food.
“It’s been part of our vision because the world needs more protein, and you want to get protein to people as efficiently as you can,” Luecke said.
Again, Houdek’s fermented plant protein can be used in plant-based foods, with a number of potential applications.
“Cereals, nutritional bars, snack foods – cookies, chips,” Luecke said. “One thing food manufacturers want to claim is that a food is a ‘good’ or ‘excellent’ source of protein. And we’re hoping to encourage them to use our product as a way to support that claim.”
Houdek is testing its product in partnership with a Minneapolis firm formed by former food company executives, with the expectation of approaching food manufacturers yet this year.
“The testing has gone exceptionally well,” Luecke said. “We’ve replaced ingredients from egg protein to milk protein to wheat flour, all types of ingredients that are typically used in food products.”
Finally, Houdek also is finding growing momentum with its precision fermentation capabilities. As U.S. manufacturers have used federal subsidies to ramp up biodiesel production, which uses soybean oil as a feedstock, it’s creating a more abundant supply of byproduct soybean meal.
“That’s what we currently purchase to make our ingredients,” Luecke said. “There is projected to be a huge increase in soybean meal, and it has to go somewhere. We’re the only patented technology available to upcycle this byproduct, so we expect to see an increase in production, both inside and outside South Dakota.”
That’s leading to new market opportunities. Once Houdek ferments the protein it needs from soybean meal, it’s left with a sugar stream. Because of the proprietary fermentation process, “we’re left with a very unique media source that is what makers of nonanimal-based food products need for what’s called precision fermentation,” Luecke said. “So we’ve been hosting companies from all over the world in South Dakota to visit our facility and test our media source using their proprietary microorganisms to make their cell-based food products.”
The complete use of soybean meal “is game-changing,” he added. “We’re not leaving anything behind, and in terms of sustainability, that’s so critical. We’ve got a very low carbon and water footprint, and we’re very proud of that.”