Thursday, Nov. 30, 11:00 a.m. PST
How do you market land-based fish?
When the Monterey Bay Aquarium Seafood Watch program bestowed its coveted “Good Alternative” yellow rating on BC pen-raised Atlantic salmon earlier this year, the move might have had an unintended consequence on land-based produced salmon.
In effect, the upgrade in the ranking for BC salmon might have taken some of the marketing steam out of land-based products, which appear to be lacking a clear marketing message for consumers – other than it is potentially a more sustainable form of production.
Guy Dean of Albion Farm and Fish in Vancouver has been at the forefront of marketing salmon produced by land-based producer Kuterra.
In preparing to market the fish, Dean discovered that the concept of land-based produced salmon was hard for consumers to comprehend. So rather than solely focus on the difference between conventionally raised salmon and Kuterra’s land-raised fish, Dean focused on building the Kuterra brand.
Branding, he said, has helped the fish break into retail markets, without totally relying on its land-based pedigree to differentiate it in the market.
“You have to be highly focused on multiple positive attributes to engage with as many consumers as possible, but stay true to the brand,” he said.
Just how land-raised fish will be marketed as their numbers and market presence increases still seems a very open question.
Thursday, Nov. 30, 10:00 a.m. PST
5 million metric tons?
Jelena Kolarevic of NOFIMA began her presentation by addressing the big question of how much salmon will Norway be producing in the future.
A 2012 study pinned the number at 5 million metric tons annually by 2050. Current production from Norway is around 1.3 million metric tons.
At the time of the release of that projection, however, Norway’s production had been steadily growing every year," Kolarevic said. Since then, however, growth has slowed, leading some to wonder if that 5 million metric ton is truly attainable.
A new report from PricewaterhouseCoopers (PwC) has dialed back the 2050 projection to around 3.3 million metric tons, she said. The report also provided an optimistic production projection in the 5 million metric ton area, but also offered the pessimistic projection of 1.7 million metric tons.
PwC surveyed Norwegian seafood industry’s executives in June and July, 2017, as part of the research for the study.
The report said if Norway is to achieve the most optimistic goal of 5 million metric tons, it will have to address several ongoing issues, including lice, full optimization of its new traffic light system, production of larger smolts, feed sustainability, maintain strong consumer demand, maximum production from new developmental licenses, and on-land production of 1 million metric tons.
Thursday, Nov. 30, 9:30 a.m. PST
Sigurd Handeland of Norway's Uni Research presented research comparing closed-containment operations versus open net-pens in Norway.
The research was conducted at several closed-containment sites, including Marine Harvest’s Neptun closed-containment tank in western Norway.
Among other findings, the research revealed that fish in closed systems grew faster than those in open pens when the temperature of water was controlled throughout the year.
This can be done in closed-containment facilities because water can be pumped into the tank, which can help regulate the water temperature, especially during winter months, when extremely cold water temps slow fish growth.
The research also shows closed-containment sites provided favorable impacts on fish feed conversion and mortality rates.
Wednesday, Nov. 29, 4:15 p.m. PST
The biggest investors in RAS
What do the big guys – Marine Harvest, Grieg, etc. – think of RAS?
At the moment they use the technology as a complement to their well established net-pen operations around the world. And they are investing millions in cutting-edge, closed-containment post-smolt technology that utilizes RAS technology.
"We want to reduce number of days salmon spend at sea, so we invest in RAS to grow the smolt larger before they go to sea,” explained Trond Rosten of Marine Harvest.
But make no mistake, despite massive investments in building RAS smolt facilities, the salmon farming giants are committed to net pens right now; they aren't looking to replace net-pens with post-smolt operations.
“Net pens remain the most important technology,” said Rosten.
The use of RAS to raise smolts helps alleviate some of the most pressing problems facing net-pen farmers. By growing the smolts larger before transferring them to sea cages, costs of production can be lowered by reducing treatments for lice and disease, said Frode Mathisen of Grieg Seafood.
Wednesday, Nov. 29, 3:45 p.m. PST
All eyes on Atlantic Sapphire
Lots of eyes are on Johan Andreasssen and his Atlantic Sapphire land-based salmon farming ambitions.
The company is in the midst of building a massive commercial-scale RAS farm in Florida, south of Miami.
It is developing a fully integrated production unit, with hatchery, growout, feed production and processing. In phases one and two the company will produce 10,000 metric tons and 30,000 metric tons, respectively, and by phase three it plans on churning out 90,000 metric tons annually.
The land-based concept to be employed at the Florida facility was piloted and tested at the company’s Danish land-based supplier Langsand Laks, which is owned by Atlantic Sapphire A/S in Norway.
The company checks many of the boxes that investors in the sector look for: it has an experienced management team, proven technology and an established water supply infrastructure, among others.
Production as the scale envisioned by Andreassen and his team is a lofty goal, but he is confident in his company’s ability to execute its vision – and for the moment so are investors in this public company.
Andreassen said the US salmon market, the largest in the world, is a 450,000 metric ton market that he expects will more than double over the next decade, creating plenty of room for new salmon suppliers, given that many net-pen operations around the world are reaching capacity.
“It’s not a winner-take-all in this market. There are lots of winners here,” he said.
By having his facility in the United States, he can avoid the substantial cost of air freighting fish around the world and expenses associated with disease and other issues challenging net-pen farmers, he said.
And don’t call this emerging technology RAS. Andreassen doesn’t use the term in his operations. He chooses to refer to his land-based operation as “bluehouse,” – a greenhouse for growing fish.
Wednesday, Nov. 29, 2:45 p.m. PST
Open net-pen salmon farms are quite familiar with the NIMBY (Not In My Backyard) mentality of some neighbors, especially in British Columbia, where the industry has long been the target of NGOs and citizens alike.
But what about land-based sites? Might they, as they develop, run into opposition from neighbors who don’t want a fish farm down the street from their homes, schools or businesses?
Justin Henry of Henry Aquaculture Consultant Inc. has worked with Northern Divine Aquafarms on its coho and sturgeon operations and has some words of advice: beware of the CAVE (Citizens Against Virtually Everything) people.
“Be cognizant of neighbors where you build. We don’t want to develop a reputation as an industry nobody wants to be its neighbor,” he said.
The number of land-based facilities is still small, and siting issues generally center around access to water and other regulator issues. But as more sites come online, NIMBY could become a factor.
Wednesday, Nov. 29, 1:15 p.m. PST
What investors want
Just as aquaculture grew when wild-fish supplies struggled to meet demand, land-based aquaculture can grow as the growth of mainstream aquaculture slows.
That’s the message Tone Bjornstad Hanstad, seafood equity analyst at DNB markets, had for attendees at the 2017 Aquaculture Innovation Workshop.
Earlier this year, DNB published a comprehensive report on the viability of land-based salmon farming.
Hanstad noted that production of open net-pen salmon has slowed and is expected to grow by 6.5 percent in 2018 and 4 percent in 2019. Disease, lice and increased regulation are contributing to the slower growth of the industry throughout the major salmon farming regions of Norway, Chile and North America.
At the same time, there is plenty of investment going into freshwater RAS by the big salmon producing companies, who utilize the emerging technology to raise smolts to larger sizes before releasing them into net pens in the sea, thus reducing their time exposed to lice and disease.
In addition, there are more ambitious projects in the works such as Atlantic Sapphire, a public RAS salmon producer who is building a large-scale facility in the United States with a target production of 90,000 metric tons.
DNB Markets has helped Atlantic Sapphire in raising equity and listing on the OTC, but like many investors it remains wary of investing deeply at the moment in RAS.
Hanstad had some advice for large-scale RAS operators looking for investment. What investors want, she said, is:
- Experience with salmon farming
- Experience with RAS technology
- Owners who have invested both time and money in the project themselves
- Production facilities located near the large markets
- Access to water infrastructure and with sufficient scale and biosecurity
- Experience with required regulatory process.
Wednesday, Nov. 29, 12:15 p.m. PST
Happy fish taste best
Terry Brookes of Golden Eagle Aquaculture, located 125 kilometers from Vancouver, says a happy fish is a good tasting fish.
Golden Eagle raises coho salmon – 125 tons of the fish a year, making it a boutique RAS farmer. The company has been in business six years but has selling fish for just three years.
Off-flavor is common challenge with fish raised in RAS systems, and Brookes believes farmers need to start conditioning the fish a month before any planned harvest by getting water quality optimized and reducing stress in fish.
Its extremely important the fish in these systems are happy in the sense that environmental parameters are such that the fish are encouraged to grow and go about a normal life, he said.
Wednesday, Nov. 29, 11:15 a.m. PST
“If I was in your shoes I would be establishing relationships with key retailers." That's the advice from Mark Retzloff, co-founder of natural foods retailer Alfalfas Markets.
Retloff knows what he is talking about. He is a market pioneer in the natural and organic foods market, and co-founder of Alfalfas and Horizon Organic Dairy, the leading organic milk brand in the United States.
He told attendees he sees plenty of parallels between the development of the natural foods sector and today’s aquaculture industry.
“Get retailers engaged today, bring them to you facilities, partner with them,” he said.
Retailers, he added, know what Millennial and Generation Z consumers want. “Today’s consumers want the truth. They want transparency in ingredients,” he said.
The task for land-based operators is to create consumer demand for their products.
“How are consumers going to know the difference between your salmon and others. You have to tell them what the difference is.”
Wednesday, Nov. 29, 10:50 a.m. PST
Several speakers Tuesday morning spoke about the critical role of human capital in the success of the RAS sector.
At the moment, there isn't an abundance of aquaculture professionals with an appropriate level of experience, several speakers noted.
In his opening comments, Erik Patel, an advisor to Tides Canada, noted the lack of young people in the audience, stressing the industry needs to attract young talent.
Gary Robinson of GRV Consulting said the limited amount of talent with experience in RAS is an inhibiting factor from an investment point of view.
Wednesday, Nov. 29, 10:00 a.m. PST
Money is out there
If you are a land-based aquaculture operator looking for investors, Jon Fitzgerald of Stope Capital Advisors has some fantastic news.
“I am 100 percent confident equity is out there -- more so in a year, more so in two years. I think we have passed the inflection point.”
Fitzgerald, who has worked with land-based salmon farmer Kuterra, has been coming to these workshops for the past four years, and over that time he has seen a dramatic change in how much investors are willing to gamble on the fledgling RAS aquaculture sector.
Four years ago, he said there was one investor and one banker at the conference and credit wasn’t available. “But today we have a different situation,” he said.
RAS is in a growth stage; it is at stage where it needs to expand markets and infrastructure, he said. "You're a young industry but your technology has matured. Excellent projects will get financing."
His final word of advice: "Go big or go home;" create operations that have scale.
Wednesday, Nov. 29, 8:00 a.m. PST
World experts gather
In this room, said Erik Patel, an advisor to Tides Canada, is the greatest collection of Recirculating Aquaculture System (RAS) experts assembled in the world today, as he welcomed attendees gathered for the opening session of the 2017 Aquaculture innovation Workshop in Vancouver.
The event attracted 180 aquaculture experts from 12 countries, including Canada, the United States, Norway, Chile, Denmark and others.
The bulk of the attendees are aquaculture producers, feed and equipment suppliers and researchers, he said.
But new interest is coming in the form of investors and retailers. “This is a bellwether for the development of this industry and how it is moving along,” said Patel.
He painted an optimistic picture of the state of the global RAS industry. Still, much of the technology is cutting edge, which also means it is bleeding edge filled with challenges-- challenges attracting capital and talent, for example.
Nevertheless, he said, the industry has been advancing by leaps and bounds.
Tuesday, Nov. 28, 7:25 p.m. PST
It's the night before the Aquaculture Innovation Workshop (AIW) in Vancouver, British Columbia, hosted by The Conservation Fund's Freshwater Institute, Tides Canada, Simon Fraser University, and the Atlantic Salmon Federation, and time for some food. I tried Pokerrito, a build-your-own poke bowl restaurant in Vancouver. You can chose to create your own poke bowl with a wide assortment of add-ons or wrap it all up in burrito. Either way, the food is delicious. I chose a Hawaiian poke bowl and it did not disappoint. The place was packed and the median age, I would guess, was 20-something, further evidence of the popularity of poke -- and raw fish -- among younger consumers.