High salmon prices, limited opportunities for growth at sea, new technology and venture capital are helping to build a new salmon industry.
"It is almost a full-time job in itself to follow all the projects that are planned," said Pareto analyst Carl-Emil Kjolaas Johannessen during a conference organized by the Norwegian Fisheries Industry last week.
While salmon production on land is nothing new, large-scale growout on land is, but Johannessen thinks the sector will grow "sharply" over the next few years.
"Despite many challenges such as accidents with mass mortality, bad taste, early puberty and such, we believe that many of the problems have now been solved, or are about to be solved," he said.
Many of the planned new facilities are so-called recycling facilities, a relatively new technology where the water is recycled through various filters.
Plans versus action
Plans identified by Norwegian analysis firm Kontali would, if completed, enable the production of 1.7 million metric tons of salmon on land.
"If everything were to be realized within 10 years, which is not very realistic, it would make up a third of all the world's production of Atlantic salmon," said Kontali head Ragnar Nystoyl.
Most of this production -- more than 600,000 metric tons -- is planned for Norway, with other large projects planned for elsewhere in Europe.
In North America, there are plans for 500,000 metric tons, while in Asia, projects for around 200,000 metric tons have been identified.
However, only a small percentage of these farms have started production.
"There is as little as 3-4 percent of the planned capacity where the first earth has been dug," said Nystoyl.
On this basis, he believes that projects will take longer than planned and there will be less salmon produced than planned.
"It is still not proven that it is technically and biologically possible to produce salmon on land on a large scale in a good way. It is a little too early to conclude that there is a paradigm shift."
The positive impact of COVID-19
Land-based salmon farms in Norway will benefit from good infrastructure and expertise, but not from proximity to the market, so growth is likely to be spread across continents.
"In 10 years, we believe there will be many large facilities in the US and Asia, but also in Norway and elsewhere in Europe," said Johannessen.
He expects a production cost of more than NOK 50 (€4.57/$5.38) per kilo for the first land-based facilities -- 25 percent more than costs to farm at sea in Norway -- but that this will fall over time.
There are also advantages to be had in the wake of the coronavirus pandemic, which has caused air freight costs to rocket on a shortage of passenger flights and added NOK 10-20 (€0.92/$1.08-€1.83/$2.15) per kilo to ship salmon to Asia and the United States.
"We believe that it makes no sense to fly fish from one continent to another," said Karl Oystein Oyehaug, managing director and acting CFO of Atlantic Sapphire.
Looking for a more in-depth look at the global land-based salmon sector? An upcoming IntraFish Business Intelligence report offers a detailed analysis into this exploding sector.