Undercurrent News is reporting live from the North Atlantic Seafood Forum in Bergen, Norway, held June 21-23
Undercurrent News is reporting live from the North Atlantic Seafood Forum (NASF) in Bergen, Norway, held June 21-23, 2022.
It is the event's return to a large-scale, in-person format since the coronavirus pandemic lockdowns. It is also being streamed online.
Day one features a "global aquaculture summit", before a panel on gender equality in seafood and a look at sector innovations. Days two and three will move on to the familiar sector-specific events on salmon, whitefish and coldwater shrimp, among other topics.
Day three will then see numerous listed companies present at Pareto Securities' "investor seminar", while dedicated events on land-based aquaculture and pelagics will also take place. Keep checking back to read the latest updates below.
The rising prices for cod saw Morten Jensen, the chief operating officer for whitefish for Insula, ask if the fish was becoming the new salmon in terms of its position in the market, in an interview with Undercurrent News a few weeks ago.
During the NASF whitefish summit on Wednesday, Jensen expanded his question to reflect the pressure the cod market could experience from cheaper species such as Alaska pollock.
“The big question is, is this a new price paradigm, or are the [high cod] prices driven by temporary matters? Will the prices go back, or will they stay? Is cod the new salmon? And is Alaska pollock the new cod?” asked Jensen.
Jensen highlighted the record raw material prices for cod and haddock, which are being driven by the salted fish sectors in Portugal, Spain and Italy.
Then, there was a decline in clipfish consumption in Portugal in Q1 (see below).
Although the high prices are likely a factor, this could also be “caused by the opening up of restaurants and people eating more outside of the home”, said Jensen. “But we see there is a decline.”
There’s a concern in the sector that consumers who started cooking more seafood at home during the pandemic are being put off by the rising prices, he said. “That’s not in anybody’s interest.”
In an earlier presentation, Simon Smith, CEO of Young’s Seafood, asked if UK consumers are falling out of love with cod. Smith said cod can easily be substituted for pollock or pangasius in many products.
The chances of the northeast Atlantic’s coastal states agreeing a full quota sharing agreement on mackerel, blue whiting, and Atlanto-Scandian herring are slim, believes Fishfacts founder and fisheries management expert Oli Samro.
Having literally written the book on fisheries management in the region, Samro said there was just one factor that decides quota-setting: politics.
“And politicians don’t rely on the advice of ICES [the International Council for the Exploration of the Seas],” he said.
“I don’t see there being a quota sharing agreement. I can only see unilateral quotas and bilateral agreements between the countries in whose waters the species migrate.”
Norway and Russia have professed their intentions to maintain cordial fisheries management relations despite Europe largely turning against Russia over Putin’s invasion of Ukraine. Samro noted that if their joint cooperation comes up for new negotiations, there will be several important areas for mackerel fishing that come “up for grabs”, as illustrated below:
Data presented by Ragnar Ronning, global sales and marketing director with Kontali, shows the extent to which the Faroe Islands has relied on the Russian market for exporting mackerel and herring.
In 2021, Russia imported 48,250 metric tons of mackerel from the Faroes and 62,060t of herring, as well as 13,851t of salmon. It also brought in 8,300t of blue whiting and nearly 6,000t of capelin.
That same year, Russia imported roughly 10,000t of frozen mackerel from Greenland and around half that from Ecuador – the Faroes was by far the largest supplier, and has been since at least 2016, when Kontali’s presented data began.
Russia was also 100% dependent on the Faroes for its herring in 2021.
“The question is, where will all these Faroese volumes go,” asked Ronning. “To the EU, probably, but we’ve yet to see how the data plays out.”
He also noted that prices to the consumer for salted herring in Russia were lifting, from already high levels, in 2022.
There is a growing food market segment driven by the “eco-anxiety” of consumers, according to Julius Palm, deputy CEO and head of strategy and brand with Followfood.
The German company first launched in 2007 as Followfish, and had the first “360-degree” sustainable, fully traceable and trackable canned tuna product, he said. It is focused on and built around full sustainability and “doing things differently” in the food production sector, and the encouraging thing is that this outlook has found its market, he said.
Followfood – which now sells all sorts of foodstuffs as well as its pole-and-line tuna, mangrove-sourced black tiger shrimp, and other seafoods – has found a wide enough range of buyers willing to pay extra for the level of traceability and trust it offers. So much so that the brand has carved out a position not just among Germany’s organic or sustainable foods, but among the general grocery segment.
Its original “unique selling point” was the ability for consumers to use an on-pack QR code to find all possible information about a fish catch; that has been widely adopted by other brands since. Followfood will be hoping that its moves since – such as detailed lifecycle analyses of a product – can also catch on.
Liv Malvik, CEO of industrial real estate agent KMC Properties, shared details of a new processing facility her firm is building for Norwegian processor Slakteriet.
The new slaughter and filleting facility is being built in Floro, Vestland county, and will come with robotic and automated tools, she said.
Altogether, the plant is budgeted to cost NOK 682 million ($68m), with Slakteriet to invest a further NOK 550m in machinery and equipment for the plant at a later date.
Construction has already commenced, with KMC Properties to formally acquire the property in Q4 this year. The final factory is due to be completed at the end of 2023/ early 2024.
Under the terms of the contract, KMC Properties will lease the factory to Slakteriet over a 20-year period.
KMC Properties currently has a portfolio of 46 properties across Scandinavia and the Netherlands focused on industrial and logistic purposes, Malvik said, with a focus on long-term leases. Seafood makes up 43% of the firm’s business, with major clients including acquisitive group Insula and Grontvedt Pelagic.
Icelandic Salmon, which owns the farming subsidiary Arnalax, is increasing the volumes of fresh fish it’s transporting to the US market by sea.
The company, which is part-owned by Norway’s SalMar, used sea transport to move 89% of its fresh volumes for North America in Q1, compared to 71% in Q4 of 2021 and 67% of Q3, said CEO Bjorn Hembre.
Salmon is shipped on a vessel from Reykjavik to Portland, Maine, which takes seven days, he said.
Only the Faroe Islands and Iceland can ship fresh salmon to the US, said Hembre.
“Customers were worried due to long transport time. Now accepted in market and demand growing fast,” he said. “We have not had one quality complaint.”
Not only is there a “huge benefit in transport costs” with shipping to the US compared to air freight, the carbon footprint is also much lower, he said.
Arnalax salmon is going to North America in both fillet and HOG – head-on gutted form.
Cast your mind back a couple of years, and it was hard to move in the salmon industry without news breaking of another land-based farmer hitting the stock market.
Times may have changed, and the investor market cooled, but that isn’t deterring the Oostende, Belgium-based recirculating aquaculture system (RAS) project Columbi Salmon, according to chief financial officer and former Nordea analyst Kolbjorn Giskeodegard.
In order to raise the necessary funding to begin building the planned 12,000-15,000 metric ton capacity first phase, Columbi plans to launch an initial public offering (IPO) either at the end of this year or early in 2023, he said, though he did not specify the intended stock exchange.
The company was founded by eight members of the financial, technology and aquaculture sectors on March 7, 2020 — the very week that COVID prompted lockdowns across Europe.
Now, Columbi has secured the necessary 16-hectare plot in Oostende for the phase one site, as well as most of the necessary permits. Only the building permit remains, but Giskeodegard said Columbi should be obtaining this by early Q4, allowing construction to commence before the end of the year.
“In the current phase we are well funded; for the planning phase we raised €50 million over the past two years, which allows us to go full speed ahead on acquiring a project organization and hiring people,” he told listeners.
“Of course, this project will cost much more, so we will be seeking more funding – hence the IPO.”
Having marketed itself as a full alternative to conventional, imported fish, Atlantic Sapphire’s ‘Bluehouse’ salmon has remained largely unaffected by the spiking spot prices that have hit the market in the first half of the year.
Instead, it has maintained a fairly consistent price range — $12/kg for its premium 3kg+ salmon product, and $7.5-$8/kg for the rest of its harvest.
“The salmon price when we started out was considerably lower than it is today — at that point we were looking at a 150% premium — but we’ve kept our price very stable for several reasons,” explained chief financial officer Karl Oystein Oyehaug.
“Most importantly we’ve spent years developing our own consumer brand, the Bluehouse salmon, that’s not a substitute for commodity salmon,” he continued. “This is also the reason why we expect we will be able to maintain a price premium going forward.”
However, the firm now believes the state of the market means it can now begin pushing for a higher price for its premium product.
“When it comes to our price achievement through the rest of the year, we do expect that the premium price will come up with the new batches that we just started to harvest. The quality of the product is even better, and for us, that’s the perfect time to go to our customers and try to claim a little bit of a higher price achievement than what we’ve had the first six months of the year.”
As the company plans to begin ramping up volumes again after the installation of a new filleting line this month, Oyehaug believes Atlantic Sapphire should soon start expanding its retail footprint beyond the 2,000 stores in the US already marketing the ‘Bluehouse’ brand.
After a disastrous set of incidents in 2021 — a year which saw a fire wipe out its Danish land-based facility — recirculating aquaculture system (RAS) salmon farmer Atlantic Sapphire is thus far enjoying a largely under the radar 2022 marked by steady biomass growth at its main US plant.
“In the very short term, our key focus is stability,” chief financial officer Karl Oystein Oyehaug told listeners. “With the same stability that we’ve had since last summer, we’ve been able to do what we consider the funnest part of the job: focus on improvements.”
“This ability to focus on detail is very hard when we were running around putting out fires in the first half of 2021. But right now, we are there where we can really go on to the cost-cutting and fine-tuning of the systems to deliver better performance — this will deliver profitability.”
According to the company’s most recent May update, Atlantic Sapphire saw 500 metric tons of biomass gain during the month, and harvested 140t. A similar-sized harvest is expected in June.
“We’re waiting a little bit for a ramp-up expected in June because we’re installing a brand new filleting line as we speak,” Oyehaug said. Previous construction projects notably had a disruptive impact on the wellbeing and performance of young fish.
The most recent batches have shown promising performance, much improved from the initial batches when the company began production in 2020.
“We’ve had issues in the commissioning phase of phase one where there was a lot of challenges; we’ve basically taken over a system that didn’t work as intended,” he claimed. “It took a year to get things up and running, work through the long list of things that needed to be fixed.
“But once we got there we’ve basically had relatively stable production since last summer, and that’s reflected in the performance of the new batches.”
The company is currently utilizing 65% of its available tanks constructed as per the phase one part of the project, and still has further room to increase densities.
“On the medium term our focus is on economies of scale,” continued Oyehaug. “With phase two, our production goes from 10,000t-25,000t of salmon per year, and the fixed cost base with land-based salmon farming has enormous implications for margins.”
The wave of consolidation in the Chinese whitefish processing sector will be sped up by the COVID pandemic, said the CEO of Chang International, a big player in the sector.
A further 20-30% of Chinese processing plants will go under in the next five years, said Jerry Chang, delivering his NASF presentation remotely from Shanghai, during the lengthy lockdown in the Chinese city.
According to Chang, there were around 100 processing plants in the main hub in Dalian, Zhuanghe, in the past. This has reduced to around 85, but only around 43 plants have re-opened from the COVID shutdown which started last November, he said.
Although the plants that are still open have good orders due to the “big hole” in the whitefish market, the outlook is uncertain. “The industry is not sustainable. We may make some money this year, but we do not know what will happen next year.”
In addition to lower volumes of available headed and gutted (H&G) pollock raw material from Russia, financing is getting tighter, he said.
“The financing is getting worse and worse, banks watch closely, as the profit is so slim,” said Chang.
Then, in addition to producing lower volumes of H&G pollock in favor of single frozen, Russian suppliers also want cash payments, “not an LC [letter of credit]”, he said. “So, the Chinese processor has lower buying power.”
As has been much documented, plants are focusing on the domestic market in an effort to stay in business, he said. “More and more plants will switch to the domestic market.”
Then, there’s the prospect of another COVID wave in the autumn and winter, as the weather gets cold, he said.
The so-called “pipeline” of moving headed and gutted (H&G) cod and haddock from Norway or Russia to China for processing and back to markets in Europe or North America is now twice as long, said a top sector executive.
“The [H&G] fish we are buying now in the north of Norway is what we will sell at the start of next year,” said Frank Bodin, chief financial officer of Nordic Group USA, an importer based in the US.
China’s zero COVID policy and its impact on shipping into and out of the country, as well as the logjam in US ports, mean getting processed cod and haddock into the US market is far tougher, he said.
“The pipeline via China is now twice as long, compared to pre-COVID. If you did everything really quick, from northern Norway or Russia, you could have products in the US market in three to four months. Now, it’s more than six months,” said Bodin.
As a result, US imports of frozen cod from China were down in 2021, a trend that has continued in 2022. “We’re already behind 2021 which was already low,” said Bodin.
Overall imports show the shortfall from China has been somewhat offset by direct sales from Iceland, Norway and Russia, he said. However, Norway and Icelandic cod are used more in retail, not in foodservice, where the Chinese double-frozen products are utilized.
The overall market shortfall will be further worsened by the US ban on Russian seafood coming into play on June 1, he said.
Earlier this year, the land-based recirculating aquaculture system farmer (RAS) Nordic Aquafarms made the decision to demerge its farming operations in Europe from its planned sites in the US, and focus its efforts entirely on yellowtail production at its Danish and Norwegian farms.
It’s a decision that looks very promising in the current market, according to CEO Bernt Olav Rottingsnes.
“2020 was not the easiest market for us for a horeca product,” he explained. “But the price achievement for us over the past year has been incredible.”
“We are now averaging NOK 160/kg since March [for yellowtail], even higher these days and we are not able to supply enough.”
This year, Nordic is guiding for a 600 metric ton yellowtail harvest at its Danish plant Sashimi Royal, and a further 800-900t of salmon from its salmon farm Fredrikstad Seafoods.
The company has initiated an evaluation to convert Fredrikstad to yellowtail production — requiring approval from Danish and Norwegian authorities — which it believes will give the factory a harvest capacity of 2,000t due to the species’ shorter production cycle.
It also began an expansion of the Sashimi Royal facility in May.
“So for us, it’s important now to just increase volume and continue growing in the market.”
Faroese farmer Bakkafrost sees increasing its large smolt production in its home country and the UK, where it acquired what was formerly known as the Scottish Salmon Company.
A “big driver” of the company’s plan to hit 150,000 metric tons in Scotland and the Faroe Islands is large smolt, farmed on land to around 500 grams, said CEO Regin Jacobsen.
In the UK, where the company is now operating as Bakkafrost Scotland, a post-smolt hatchery is under construction in Applecross.
The hatchery in Applecross will have the capacity to produce around 8 million smolts at 250g by the end of 2022 and 10 million smolts at 500g by the end of 2023, according to Bakkafrost.
The focus on post-smolt production in Scotland will “help drive the biology in the right direction”, said Jacobsen.
Grieg Seafood, which is focused on farming salmon in Norway and Canada after selling its Scottish farms, is looking to move further downstream.
The company has ended its former sales joint venture with Bremnes Seashore, Ocean Quality, and built an in-house commercial team.
Grieg is looking to build “partnerships with processing partners close to key customers and markets”, rather than sell on the market looking only at the margin per kilogram, said Andreas Kvame, CEO.
The company is not looking at acquisitions in processing, but could consider a joint venture of some sort, Kvame told Undercurrent News.
“There’s a lot of capacity out there”, so building something would not be what Grieg is considering, he said.
The company is also looking to build up its post-smolt program, after a successful pilot growing salmon out to around 500 grams on land before going into the water in Rogaland. Capacity will then be expanded across all the company’s production regions, he said.
Norway-based global salmon giant Mowi is looking at investing in post-smolt production in the UK, where it farms in Scotland.
“We’re looking at a post-smolt program in Scotland as we speak,” said Ivan Vindheim, CEO of Mowi, speaking during the Pareto Securities investment forum on Thursday at NASF.
The company’s post-smolt program in Norway – growing salmon on land to around 500 grams — is expected to deliver 40,000 metric tons (GWT, or gross weight tonnage) of harvest volume by 2027, he said.
Mowi “will address post-smolt in Scotland as well”, he said.
The company has an “intrinsic” harvest capacity of over 500,000t GWT, with the harvest at a record 466,000t in 2021, according to Vindheim.
Addressing listeners at the start of the second day’s salmon aquaculture summit, Steven Rafferty, CEO of multinational farmer Cermaq Group, discussed the downsides of Chile’s aquaculture framework.
“There is a misunderstanding of the Chilean industry in my view,” said Rafferty. “I’ve got many comments from other farmers, other suppliers that say that Chilean companies just make a mess of it in Chile. Of course, I’m one of those farmers, so I take it a little bit to heart, but it’s not true.”
Chilean salmon farms, he said, are in form and function almost identical to their counterparts in Norway.
“It’s got great natural advantages in Chile, but the issue is the regulations are not suitable for purpose,” he explained.
“I think a lot of people in Chile would say we grew too quickly at certain times in an unsustainable way. There were ISA issues, there was an earthquake, a volcanic eruptions, algae blooms, all sorts of external factors, and we grew a little bit too quick.
“And what the government tried to do with good intentions is put restrictions on the growth to make it sustainable, but what they’ve managed to do is make regulations that are a bit contradictory to each other and it makes it very, very hard.”
According to Rafferty, certain regulations are directly contradictory to other rules, meaning the Chilean industry faces higher costs trying to comply.
“And then in the western or northern hemisphere, you’ll read that another Chilean company was fined for doing this or that, but it’s nothing intentional — it’s a misinterpretation of the legislation,” the Cermaq CEO continued. “Even the government bodies and the Chilean companies interpret it differently.”
Following the appointment of the new president, Gabriel Boric, earlier this year, Rafferty said that he hoped a new, less opaque set of rules could be established.
“Cermaq will definitely help to support anything that can be learned from Norway to make the whole thing more simple. Chile’s dear to my heart and I’d really like to say in 10 years time that Chile has a much more sustainable way of working without the current legislation.”
Mowi intends to launch a new range of commercials this fall starring Norwegian actor Kristofer Hivju, known globally for playing the role of Tormund Giantsbane on TV series Game of Thrones.
The new commercials feature Hivju eating Mowi-branded salmon at various remote fjords in Norway.
“He is now going to be the ambassador for the Mowi brand going forward,” said Ola Brattvoll, Mowi’s COO of sales and marketing. “He has a very strong traction among younger consumers, especially Milennials, they love him. He’s authentic, he’s trustworthy and he has a Nordic personality, which fits very well with the personality of the Mowi brand.”
Since launching its own branded range of salmon products in 2019, Mowi has entered 13 different markets. The company used Poland as its first pilot market, before spreading to France and the US the following year.
“Just after we launched, the pandemic hit — of course that was not part of our plan, but what is very promising for us to see is that despite all the challenges we had during the pandemic, the brand is performing in these two markets,” said Brattvoll.
Last year, the company followed up by launching its brand in the UK, Belgium, Italy and Spain; and in 2022, Mowi has begun making inroads into Latin America and Asia.
After three years in Poland, brand awareness has reached 59%, while awareness is lower at 37% and 30% respectively in France and the UK.
“We have a very strong transition from brand awareness to ‘ever tried’ and ‘regular users’,” continued Brattvoll. “So we are actually able to establish a habit among consumers of eating our product.”
The Barents Sea cod and haddock total allowable catch (TAC) could be cut by as much as 20% in 2023, said the CEO of Norway’s largest whitefish harvesting firm during the NASF whitefish summit on Wednesday.
“The forecast for next year is a 20% decrease for both species [cod and haddock],” said Eldar Farstad, CEO of Leroy Havfiske, the trawler company owned by salmon and trout farming giant Leroy Seafood Group. Then, on saithe, there will be an increase.”
A 20% cut in the cod TAC from 708,480 metric tons in 2022 would give a level of 566,784t for 2023, excluding any uncaught volumes carried over.
Morten Jensen, chief operating officer for the whitefish business of Insula, which is backed by the owners of salmon producer SalMar, agreed on the likelihood of a 20% cut on cod. “But I think haddock will be 10-15%.” The haddock TAC for 2022 is 178,532t.
Saithe is likely to increase 20%, said Jensen.
On June 16, Undercurrent News reported the catch advice for the Barents Sea cod and haddock fishery jointly managed by Norway and Russia will be delayed until later in 2022, as the latter nation’s scientists are suspended from the International Council for the Exploration of the Sea (ICES). The advice was expected in June.
However, ICES has advised a hike for saithe in the northeast Arctic from 197,212t — the figure at which the TAC was set — to 226,794t for 2023.
Norwegian salmon farmer Eide Fjordbruk has reduced its CO2 emissions from 4.04 per kilogram produced in 2018 to 2.56/kg in 2021, said CEO Sondre Eide.
The company has overtaken frozen pollock fillets for the low level of CO2 produced, according to data Eide, a third-generation salmon farmer, presented at NASF.
According to his data, the company’s salmon has the lowest level of CO2 produced per kg of any type of seafood.
Eide Fjordbruk has overhauling nuts, which produce 2.3kg of CO2 per kg produced, in its sites. We’re nuts about getting past nuts,” said Eide.
US agribusiness giant Cargill has just officially opened what it claims is the world’s first aquafeed factory without local CO2 emissions.
“We were really proud last week to open our factory in Bergneset, in the north of Norway, as a fully decarbonized factory,” said Dave Robb, head of Cargill’s SeaFurther sustainability initiative, during a panel at NASF.
Click here for the full story.
After the coronavirus pandemic and new Brexit regulations, the UK foodservice sector is sorely short of skilled chefs and other staff, noted Mike Berthet, director of consultancy Aquasea.
While this means tough times for the restaurant and pub sector — especially when inflation and recessionary trends are taken into account — it could be an opportunity for coldwater shrimp, he suggested.
As a cooked and frozen product, coldwater shrimp are versatile and easy to use for any level of foodservice operator, he said. It has also long overperformed in the UK, where it is viewed as an affordable luxury.
Still, he noted there were various market trends that could see fierce competition to sell to UK foodservice; there are shrimp (both coldwater and warmwater) that are seeking markets with Russia and Ukraine taking far less, as well as the strong production on the US West Coast (see the previous blog post).
While Oregon’s jordani landings are at high levels, their prices are at their lowest since 2013.
“The UK is familiar with jordani,” said Berthet. “We’ve not had it in large volumes for a while, but foodservice is familiar, and you can bet Oregon will be pushing to sell to Europe and to the UK.”
He expects to see Oregon taking chefs out to the US, and running other promotional measures, he said.
Global coldwater shrimp catches were up 2.5% year-on-year in 2021, at 282,076 metric tons, according to an update by Gemba Seafood Consulting.
Essentially each of the important harvesting regions saw landings climb with the exception of Russia, where catches fell from 28,000t to 22,000t.
Catches by Greenland, by far the largest producer, remain stable, and its 2022 quota is flat y-o-y at 115,000t.
US West Coast landings of pandalus jordani hit a six-year high in 2021, according to an update from Pacific Seafood director Charles Kirschbaum.
Catches by fishers in Washington, Oregon and California have been climbing steadily since 2019, and in 2021 rose to 30,752 metric tons; higher than the five-year and 20-year averages.
This was driven mainly by a hike in Washington, though Oregon’s also rose.
The number of peelers and peeling facilities did not change year-on-year. Vessel numbers too have been very consistent.
Kirschbaum said the outlook for 2022 looked promising; the “carryover of zero-to-one-year-old shrimp looks good, and landings should be pretty stable on 2021”.
Despite a clear reluctance to forecast the long-term salmon market in such unusual times, market analysts from both Kontali and Pareto Securities said they foresaw year-on-year production growth from nearly all major producing countries in the second half of 2022.
“We see that most of the production regions will see a shift from a notable decline to a moderate, marginal supply growth,” commented Ragnar Nystoyl, chief analyst with Kontali.
“Chile in the second quarter has aready seen some price reactions as supply increased compared to a year ago,” he added, noting that Chile was the only major producer to see production growth in Q2.
In Q3, Kontali is forecasting a year-on-year production increase of just under 5,000 metric tons out of Norway, a further 5,000t from the other European producers, 7,000t y-o-y improvement from Chile, and a small 2,000t dip from Canada and Australia combined.
A further y-o-y increase of just over 20,000t is expected from European producers in Q4.
Carl-Emil Johannesen, an equity research analyst with Pareto had a similar outlook.
“In the second half we expect to see a shift, prices will come down from where they are now,” he told a room filled with salmon industry representatives. “Of course the NOK 100/kg [spot price] that we saw in the first half is probably too extreme to expect going forward.”
Despite this, prices are still likely to settle at a higher level than the NOK 60/kg pre-COVID norm, Johannesen said, as H2 supply growth will likely be insufficient to prompt a return to earlier price levels.
Nystoyl added that there will still likely be some demand disruption in the aftermath of this year’s record prices, as processors come to terms with the “struggles and losses” of the last six months.
Aquaterra – a company producing fish oil from genetically enhanced canola – claims its products could meet all the global demand for fish oil by 2030.
The firm, which is owned by agritech firm Nuseed, also claims it could do that with 1.5 million hectares of land – less than 5% of the current canola crop area.
It has taken genes from algae and bred canola that can now independently produce long-chain omega-3, doubling the normal omega-3 content of standard canola.
Its oil has been proven as a stable and effective ingredient in aquafeed, and Aquaterra currently works with “most of Chile’s fish feed suppliers”, said Pablo Berner, the company’s aquaculture business lead.
“There is room to improve the efficiency, the life cycle of canola, but already the production of our canola is identical to standard canola,” he said. “It’s a closed-loop production system from seed to oil.”
The far lower carbon footprint of seafood compared to land-based protein needs to be better communicated to consumers, said executives on a panel at NASF.
Mowi’s total salmon production creates 2.1 million metric tons of CO2, compared to 4m for the corresponding amount of land-based animal production, said Catarina Martins, chief sustainability and technology officer for the Bergen, Norway-based global aquaculture giant.
The 1.9m metric tons of net CO2 avoided by consumers eating salmon and not beef, chicken or pork is the equivalent of taking 421,000 cars off the road, she said.
However, consumers are buying seafood more because it’s healthy, not that it’s a “low carbon alternative”, she said. “They [consumers] need to understand that key message.”
Martins called the move to consumers eating “blue foods” such as seafood as a “triple win”, as it’s “good for the planet, good for the people, good for the economy”.
Maria B. Helsengreen, a partner focused on aquaculture at the Norwegian arm of Ernst & Young Global, said “planet first” is emerging as a major buying trend for consumers (see chart below). However, more needs to be done to tell the story and label food, she said.
Mowi’s Martins presented a chart of the company’s “decarbonization journey”, which stated it cut CO2 emissions by 8% in 2021.
Moves like the company’s move to hybrid generators on sea sites, as well as connect them to land power, have been partly financed by the Norwegian government, she said.
The company would like to see such funding available in other countries, as it helps keep seafood costs down. This means the “transition isn’t so painful from an industry point of view and seafood loses competitiveness with other proteins”, said Martins.
“Green” sectors, such as seafood production, will get cheaper financing compared to unsustainable “brown” industries, said the top seafood banker from Norway’s DNB.
It’s “becoming more expensive to finance ‘brown’ [unsustainable] industries, even if you can get capital at all”, said DNB’s Anne Hvistendahl, during a panel at NASF. “Banks are stopping the financing of the oil industry”, she said, as an example.
Big investors in Europe have ESG [environmental, social, and governance] mandates, with more “money going to green than brown”, she said. According to Hvistendahl, a client from the seafood sector raised money from an unsecured green bond at a cheaper rate than bank financing.
DNB and other banks must “classify their portfolio” in terms of “green and brown” companies in the future, she said.
The bank is “concerned about greenwashing” on ESG, however. As a result, the “KPIs [key performance indicators] targets in the [green] loans must be real and stretched solutions”, she said.
French biotech firm Agronutris has called on the aquaculture industry to embrace insect meal, stressing that such firms need partnerships to achieve the economy of scale necessary.
Mehdi Barrada, CEO and co-founder of Agronutris, said the company is preparing to open its initial production facility in 2023. The 15,000-square-meter plant in Rethel, northeast France, will be fully operational early in 2023, he said, with a production capacity of 5,000 metric tons of protein derived from black soldier fly.
However, its goals are much, much larger. With enhanced visibility, the company can lean on current backers, and attract more, with a view to scaling up to 230,000t by 2030, said Barrada.
At 5,000t of production, Agronutris’ product has a carbon footprint two-times lower than fishmeal, and three-times lower than deforestation-free soymeal, he claimed. At greater scale, those figures become more and more attractive.
As well as Barrada, who has a background as an investment banker and a successful CEO of food group POULT, Agronutris also boasts the expertise of Chris Haacke – formerly of MSD Animal Health and global aquaculture lead with Corbion – as its director of business development.
Haacke joined the firm in November 2021, after four years with fellow novel feed ingredient producer Corbion.
Novel feed ingredients have a big role to play in reducing mortality rates among salmon farmers, believes Ian Carr, global business development director with Dutch algal oil producer Veramaris.
According to the FAO, 35% of all fish, crustaceans and molluscs are wasted before reaching plates. In Norway alone, the mortality rate is around 20%, with the feed conversion ratio gradually increasing year-on-year, Carr said.
It is the belief of Veramaris that a large chunk of this mortality is caused by “sub-optimal nutrition”, he said. As vegetable oil now comprises the majority of aquafeed formulations, the company believes that the higher resulting proportion of linoleic acid in the feed is responsible for various inflammatory issues in the fish.
As a result, Veramaris is pushing its algal oil to farmers as a means to increase the omega-3 content of its feed without necessarily raising the fish oil content.
Two Norwegian adopters Leroy Seafood Group — which has invested NOK 250 million in its alternative feed program — and Norway Royal Salmon (NRS) are already incorporating algal oil into their feed, though Carr added “there are others”.
Currently, Leroy uses algal oil to provide 20% of the fatty acids in its feed, while NRS has gone further with a 28% share, Carr said.
Prices for some of the key aquafeed raw material ingredients are unlikely to ease until 2023 at the earliest, according to Carlos Mera, analyst and head of agri commodities markets, with Rabobank’s RaboResearch division.
Since late 2021, fishmeal prices have lifted strongly, as have soymeal prices, both of which can be found at Undercurrent‘s prices portal.
Stocks of commodities such as wheat and soy globally are very tight (especially for wheat), with La Nina weather conditions hitting the Americas in particular. Plus, of course, the war in Ukraine has taken away a massive portion of the world’s available grain harvests.
China holds around half of the world’s wheat stocks – and will not be exporting them – while India, which has 26% of stocks, recently brought in an export ban due to food security worries, he said.
The impacts of La Nina may not ease until 2023, Mera added, while the situation in Ukraine looks set to go on well beyond that.
On the demand side, 2022-2023 looks set for the first dip in global animal feed demand for 10 years, Mera said. However, that “flexibility” in demand is not going to offset the significant loss of raw material production.
Kicking off the NASF’s aquaculture feed summit, May Helene Holme, CEO of Skretting Norway, addressed the exceptionally strained market situation for aquafeed at present.
“Prices are going through the roof, and availability is coming down,” said Holme. “12 months ago, our experts said that this is unprecedented. It really goes to show that we need an alternative approach, we’re already struggling to get high quality raw materials.”
The main drivers of the price hikes are a combination of COVID-19’s impact on global supply logistics, spiking energy prices and climate change hitting traditional producing countries, she said.
Energy prices in particular are hitting the cost of ingredient production, the cost of processing, and the cost of transport. “So every increase in price is hitting us many times,” Holme said.
Equally, heatwaves and flooding are putting a dent in ingredient production from countries such as India, she said. Similarly, some countries have imposed export bans on food, which further eats into raw material availability.
“Local and regional sourcing is a good idea but there are not many countries that can actually do it. Norway, for instance, only has 6-8% of ingredients locally sourced,” she explained.
Still, the feed industry has been “extremely good” at developing alternative formulations, she added, thereby creating flexibility so that they’re less reliant on specific ingredients.
Furthering the feed industry’s dilemma, Holme added that a 32% growth in aquaculture production is expected by 2030 – which translates to producing an additional 40 million metric tons of aquafeed ingredients per year.
US biotechnology firm BioFeyn was announced as the winner of this year’s Seafood Innovation Award by Bjorgolfur Havardsson, innovation manager with the NCE Seafood Innovation Cluster.
“BioFeyn micropackage nutritions and vitamins so they are easily transported to the digestive tract of the fish, and taken up at the right place. To a large degree they reduce the spill through the feces,” Havardsson explained.
According to the company’s website, these micropackages, or ‘feyns’ are incorporated into specially-formulated feed pellets.
BioFeyn was the unanimous winner of the award in both the jury and public vote, with Havardsson adding that its feed efficiency solution was particularly timely given the current shortage of feed ingredients since the start of the war in Ukraine.
Timothy Bouley, CEO and founder of BioFeyn, was not in attendance to collect the NOK 100,000 ($10,020) prize for winning the competition.
In an online message, Bouley said that BioFeyn already has investors in Norway, namely Planet 9 Capital and Katapult Ocean.
Anders Milde Gjendemsjo, associate partner with US consultancy firm McKinsey, addressed the unprecedented rise in salmon prices in 2022.
According to McKinsey’s consumer feedback, salmon is widely regarded as the highest quality fish species on offer among most western European countries, and hence consumers are willing to keep paying as prices rise.
Such has been the increase in global demand for salmon, however, there is a growing gap developing relative to current supply volumes.
McKinsey’s model forecasts that conventional global salmon supply will grow by an average of 3-4% per year, while a tentative 400,000 metric tons from land-based sources and 300,000t from offshore farms is on the cards by 2030.
However, even in that optimistic scenario, global demand will still outstrip supply by several hundred thousand tons by the end of the decade, McKinsey believes.
As a result, Gjendemsjo suggests that €7/kg could rapidly become “the new normal” baseline for salmon raw material prices.
Maritime economy advisor DNV has forecast that demand for ocean and coastal space will intensify dramatically by 2050, Lisa De Jager, the organization’s global seafood director told listeners at the start of the event’s second day.
Much of this will be the spread of offshore wind farms, which DNV forecasts will require 82% of the available coastal area to meet energy demands.
Furthermore, Asia is set to become a dominant force within the so-called ‘blue economy’, while investments are set to transition away from oil and gas and into renewable energy and aquaculture between now and 2050.
“We forecast that world desalination capacity will also triple by mid-century to meet increasing demand for freshwater, as freshwater supplies are impacted by climate change,” De Jager said.
“We also see the important role of marine aquaculture as we take efforts to transform the global food system to a more sustainable one.”
DNV is chairing the NASF’s first ever session devoted to decarbonization later on March 22.
PricewaterhouseCoopers (PwC) is encouraging seafood sector businesses to begin voluntary reporting of their green credentials, even if the EU’s “taxonomy for sustainable activities” won’t require them to yet.
PwC’s Daniel Næsse and Kristine Twomey outlined the EU’s classification system, which aims to establish a list of environmentally sustainable economic activities and to “play an important role helping the EU scale up sustainable investment and implement the European green deal”.
“The EU taxonomy would provide companies, investors and policymakers with appropriate definitions for which economic activities can be considered environmentally sustainable. In this way, it should create security for investors, protect private investors from greenwashing, help companies to become more climate-friendly, mitigate market fragmentation and help shift investments where they are most needed.”
In its earliest stages, only the largest companies will be called upon to report their green operations. But PwC sees it as “very worthwhile” to begin reporting under this basis for any company, as investment and capital will increasingly require an in-depth knowledge of this area.
“The EU taxonomy will affect all businesses to some extent in the future,” said Twomey. “We’d urge them to understand the implications, and to capitalize on the opportunities.”
Norwegian research body SINTEF has also been working on “climate accounting”, the term it gives to establishing the climate impacts of a business or industry.
As shown below, it has combined both an “environmentally extended input–output analysis” approach — a very macro-view of a sector — with an “environmental life cycle assessment”, which is far narrower, to come up with its best estimate of different seafood items’ carbon footprint.
Wild-caught pelagic and whitefish come out with the smallest footprint, and remarkably “green” compared with other proteins.
For farmed salmon, feed dominates the carbon footprint, though for salmon flown to China, for instance, transport can play a huge part.
Mortality rates in salmon can also push the carbon footprint up, as they can slash the efficiency of feeding. SINTEF has also found that wellboats and service vessels — which many companies have been investing in making “greener” — do not play as large a part in the footprint as might have been thought.
In 2022, SINTEF is undertaking an analysis of the carbon footprints of different salmon production methods, revealed Senior Research Scientist Ulf Johansen; a move he said “should be really interesting”.
As the European seaweed industry continues to grow, there are now a number of issues that have become fairly commonplace across the sector, explained Cecilie Linn Wathne, project manager of the Norwegian Blue Forests Network.
Chief among these is eutrophication — as the waters around the coast of Norway are repeatedly enriched by salmon farm waste nutrients, so too is the spread of fast-growing algae presenting a greater threat to the survival of kelp forests, as algal blooms form a blanket that effectively suffocates the underwater ecosystem.
Similarly, the widespread presence of marine net pens along the Norwegian coastline is effectively “shading” underwater forests and cutting off their access to sunlight. “Encouragingly, moving aquaculture sites further from the coast solves this problem,” said Wathne.
Lastly, Wathne noted that while wrasse cleaner fish populations — many of whom are found in kelp forests — have been threatened by their newfound application as a natural sea lice remover, wrasse stocks are now being more closely monitored by relevant authorities.
“Seaweed cultivation is the fastest growing mariculture sector,” she told listeners. “But there’s still a long way to go before it becomes a major industry outside of Asia.”
As previously reported by Undercurrent News from the show (see earlier post), the FAO’s most recent data shows that 90% of global seaweed production is produced by China and Indonesia combined.
Norwegian research body SINTEF has been looking into the nature of the country’s applicants to the development aquaculture license scheme, according to senior research scientist Trine Thorvaldsen.
As can be seen in the image below, almost one-third of applications were based on closed-containment units like Hauge Aqua Solutions’ “Egget”, while 25% were based on PE rings — the traditional plastic net-pen in use now.
SINTEF also broke down applications by how many have been granted development licenses, and what level of tonnage they have been granted:
100% of those awarded licenses — according to the Norwegian government’s acceptance letters — promised to prevent sea lice infections. 91% aimed to prevent escapes, and 70% would promote fish welfare, they said.
Only 43% were designed to collect waste.
Speaking earlier in the day, a representative of Norway’s Institute of Marine Research revealed the body was working on taking the sludge from salmon farms — currently dried and burned as biogas or used for fertilizer — and finding better uses for it.
One route is using the waste to produce insects, which can then be turned into a salmon feed input, “closing the loop” and making use of the nutrients still present in the waste from salmon farming.
Presenting the results of a paper co-produced by Norwegian researchers, Olav Kjesbu, principal scientist at the country’s Institute of Marine Research, examined how sensitive separate fishery stocks are to climate change.
Kjesbu’s paper, published earlier this year, measured the impacts of increased temperature on a variety of proxies, including adult fish mobility, prey specificity, and spawning cycles, among others.
Research published by Kjesbu’s team suggests that Polar cod and North Sea cod stocks will likely be the worst hit by an increase in ocean temperature.
However, the reaction of certain stocks across the region is highly mixed — those species more comfortable in warmer waters such as Atlantic mackerel and European hake, are set to grow in number as the oceans warm.
Interestingly, reaction to climate change is split within species depending on geographies. North Sea cod, for instance, are set to suffer as the climate increases, as the prevailing southward current from the spawning areas in the north creates a trap for young fish, advecting them into warmer climates where their standard prey is less plentiful.
However, cod and haddock numbers in the Norwegian and Barents sea are set to develop positively, as the melting ice cap should create larger feeding areas for the fish.
Aquaculture sector veteran Einar Wathne — investor, adviser and lecturer and assistant professor at the Norwegian University of Life Sciences — laid out his advice for the shrimp industry to try and go some way to catching up with salmon in terms of development.
He noted the Norwegian salmon sector had benefitted from strong government backing, including investment in R&D and a licensing model that absorbed a good deal of innovation risk for companies.
Shrimp, on the other hand, has had less funding, less organization, and all the risk has rested in the hands of private companies. “That holds innovation back,” he noted.
Salmon is ahead of shrimp in terms of feed technology; health management, genetics, and farming tech, while “the shrimp industry is still debating whether intensive, super-intensive, or the Latin American model is the best”.
On the funding front, Wathne continued, Norwegian salmon businesses (and, increasingly, others too) have benefitted from an engaged investing environment around the Oslo Euronext stock exchange. The shrimp sector, on the other hand, has been limited to local investments or those spurred by the supplier sector.
In this latter case, he pointed to Grobest Group’s “Gro-farm” model, through which the Asian giant helps fund farm modernization and feed improvements (subsidizing purchases of its own products). “This is an interesting model that reminds me of the early stages of the salmon industry,” Wathne said.
Looking at the production of farmed fish and crustaceans worldwide, Manuel Barange, director of the FAO’s fisheries and aquaculture division, noted that all continents around the world had seen reasonable production growth in 2020 — except for Africa.
“The contribution of African aquaculture, 2.6% [of the global whole] — this is actually a contraction. The production of Africa’s aquaculture was contracted by 1.2% [in 2020].”
“This is mainly because of drops in Egypt, which is the top regional producer, and Nigeria, which is the top sub-Saharan producer,” Barange continued. “But in the rest of Africa, aquaculture has been growing — in fact it grew in 2020 by 14.5%, so it is actually not that simple.”
Altogether, the most important continent for aquaculture production remains Asia, accounting for 88% of the global whole in 2020 through a combination of catfish, carps, tilapia and shrimp, among other species.
Regarding global production of seaweed and algae, Barange noted that China and Indonesia continue to collectively represent 90% of the world’s total.
The EU’s Directorate-General for Maritime Affairs and Fisheries (DG MARE) is preparing to launch a new Europe-wide communications effort that will aim to improve perceptions of aquaculture, said Emilia Gargallo Gonzales, trade officer with DG MARE.
An important part of increasing the supply of sustainably farmed seafood in the EU is to improve public acceptance, DG MARE knows. Hence, part of its current strategy is to try and increase trust levels in aquaculture produce.
It will aim to communicate EU member states’ commitment to supplying quality and sustainable seafood, she said, while noting that higher levels of data transparency and monitoring would not only contribute to better performance levels for farmers, but also to trust and perceptions.
There is great scope for EU member states with ocean access to engage in multi-use spatial planning, said Bela Buck of the Alfred Wegener Institute Helmholtz Centre for Polar and Marine Research.
As the EU strives to plan wind farms to safeguard future energy needs, joint planning from the earliest stages could open the door to mussel and seaweed farming, he said.
His institute has conducted several studies working with companies planning wind farm “tripods” rather than traditional, “single-stem” structures, but the outcomes were largely “don’t try it” — “your opponents will be not just the environment, but the wind farm company and the insurers too, the stress is too great”.
He also said that in Germany, at least, there has been a lot of resistance to wind farm and aquaculture tie-ups, due largely to the perception of aquaculture and the usual “not in my back yard” issues the industry faces.
Kicking off this year’s forum, Manuel Barange, director of the fisheries and aquaculture division at the FAO, broke down the latest global aquaculture production data.
According to Barange, 123 million metric tons of aquaculture produce (live weight equivalent) were harvested worldwide in 2020 — the most recent year in the FAO’s records — of which 87m metric tons was animal protein, and the remaining 35m metric tons were a combination of seaweed, algae and cyanobacteria.
Breaking down animal aquaculture volumes, 54m metric tons came from inland production while 33m metric tons came from marine sources.
Compared to 2019, animal aquaculture production grew by 2.7%, while there was growth of 1.4% from the algae sector.
“These numbers were clearly affected by the COVID-19 pandemic but nevertheless have shown growth,” Barange said.
The first sale value of 2020 production came to just over $280 billion, Barange added.
NASF’s organizers expect the event’s program and schedule to go ahead as planned this week, despite a strike of aircraft technicians in Norway adding to difficulties in traveling around Europe.
Over 100 technicians were expected to be striking as of June 20, reports News in English, with some international and domestic Norwegian flights likely to be canceled.
On June 21, Andre Akse – managing director of NASF – told Undercurrent News that as of that morning there was “no direct info about serious problems”.
“Some are a little delayed but yes, we are all set and people are checking in,” he said when asked if the program would go ahead as planned.
Contact the authors [email protected], [email protected], [email protected]
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Undercurrent News is reporting live from the North Atlantic Seafood Forum in Bergen, Norway, held June 21-23
Undercurrent News is reporting live from the North Atlantic Seafood Forum (NASF) in Bergen, Norway, held June 21-23, 2022. [...]
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