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Top Species: Farmed salmon
Versatile product fills needs and niches
By Joanne Friedrick
October 01, 2012
People love salmon, at home or in a restaurant. Combined, both wild and farmed salmon traditionally take the No. 3 spot among U.S. consumers’ favorite species, behind only shrimp and tuna.
In 2011, Canada was the largest exporter of farmed salmon to the United States, offering more than 155 million pounds, followed by Chile, at more than 96 million pounds, Norway (about 36 million pounds), the Faroe Islands (nearly 32 million pounds) and the United Kingdom (about 31.5 million pounds).
Members of the British Columbia Salmon Farmers Association produced about 80,000 metric tons (MT) of salmon in 2011, which has been consistent over the past couple of years, says Mary Ellen Walling, executive director of the association. Farmers in the province produce mostly Atlantic salmon, she says, but some also raise chinook (king salmon).
Over the past five or six years, Walling has noted an “inability to meet demand in domestic and U.S. markets” as well as emerging ones like China, India and Korea.
With demand so high, she says, the logical next step would be expansion, but the industry still faces challenges in securing investment capital, in part because of Canada’s regulatory structure. Farmed salmon is currently regulated under the nation’s fisheries act.
“But we aren’t fishermen; we are definitely farmers,” says Walling, whose association is working with legislators in Canada on a federal aquaculture act. Once that is in place, she says, there should be more stability in the industry and consequently more confidence among potential investors.
“We’re working hard on that,” she adds, hoping the legislation will provide “a foundation for getting investment in the future.” The act impacts all of Canada and all farmed species, she says, which is requiring a high degree of cooperation among farmers in different geographic regions and across species. “We may be pursuing different markets, but we all want a good foundation for growth.”
In the meantime, B.C. salmon farmers are also emerging from a recent outbreak of infectious hematopoietic necrosis (IHN) disease, which is found naturally in the Pacific Ocean. While wild fish have a natural resistance to it, farmed Atlantic salmon can be impacted. The farms that were affected have removed and composted the fish and monitoring has been stepped up.
Walling says the last IHN outbreak was in 2002, soon after which an environmental management plan was created. “So when we got the call about a possible outbreak, we got the plan off the shelf,” she says.
The difference between the 2002 outbreak and this one, she says, is that because of the plan, there has been a higher level of cooperation and communication as well as a greater ability to more rapidly depopulate the farms and compost the diseased fish.
The viral management plan will likely undergo some refinements based on the reaction to the latest outbreak, says Walling.
Promoting farmed salmon will continue to be a focus for the association as well, she notes, especially through participation in events such as Eat Vancouver, which was held in June this year and will take place again in late May 2013, and overall efforts to tout the health benefits of eating salmon, whether it’s wild or farmed.
Identifying the niches
Salmon farmers, meanwhile, are looking to carve out niches within the market by promoting the specific flavor profiles and characteristics of the fish they raise.
Joe Collins, head of sales for Sea Agra Seafood in Vancouver, British Columbia, says the company has focused on farmed steelhead raised in Lake Lois by West Coast Fishculture. The steelhead is being marketed primarily to white-tablecloth restaurants and some retailers, he says.
With just 2,000 MT produced, the fish isn’t aimed at the commodity market and does garner a higher price, he says, earning farmers about $3.85 a pound for whole fish and $6 a pound for fillets.
Collins says the steelhead offers a bolder taste vs. Atlantic salmon and its redness is second only to sockeye. The steelhead was promoted for a time, he says, but then demand outstripped supply.
“We’re at the stage with steelhead, where we’ll be back out promoting it soon,” says Collins.
Sea Agra also offers farmed king salmon from New Zealand, again positioning it as a niche product for high-end restaurants, says Collins. It is available primarily in New York, but also is sold in the Pacific Northwest.
And Collins is looking at getting the rights to sell inland tank-raised salmon, which is in the early stages of production. “I don’t know yet if it’s the wave of the future,” he says.
Just about a year on the market, Verlasso salmon, raised in the fjords of southern Chile, is produced through a partnership with AquaChile.
Scott Nichols, director for Verlasso, says the goal was to look at ways to grow salmon that would be less stressful on ocean resources, such as fishmeal. “When we talk about sustainability, it’s hard to believe we can continue to take 4 pounds of fish to make 1 pound,” he says. “We had to be able to change that.” The formula used by Verlasso, says Nichols, is a 1:1 ratio, which is achieved by replacing all fish oil with yeast to get the omega-3 fatty acids that the salmon require.
Verlasso is also focused on a lower-density model, he says, with 12 kilograms of fish per cubic meter. The more room the salmon have to swim, says Nichols, the better the texture of the fish.
As a result of this “harmonious aquaculture” model, Nichols says the salmon are brighter in color, more delicate in flavor and have different body architecture with less belly fat.
The fish do have a higher cost associated with them, he says, “but we have found people in the market are receptive to paying more if they can taste the difference.”
Verlasso tells its story in several ways, such as offering materials to counter or restaurant staff that talks about the difference in the salmon and providing POS materials for retailers. Recipe cards have a QR code on them that when scanned takes consumers to the company’s website; QR codes on gill tags also give information on when and where the fish was harvested.
Verlasso continues to add distributors, says Nichols, as it rolls out the brand nationwide. New York-based Fresh Direct sells about 1,000 pounds a week, he says.
“We want to be selling a significant amount of salmon,” Nichols says, and the plan is to achieve that through ongoing production expansion and efficiencies.
Of course, getting the farmed salmon into the hands of consumers or on to restaurant menus means making a successful case for it to buyers. Chet Garland, owner of Jackson Fish Co., a market and café in Harmony, Pa., took on Skuna Bay farmed salmon from Vancouver Island, British Columbia, after he was introduced to it by sales reps from Euclid Fish and Skuna Bay.
“It’s everything you expect to see in a fish,” he says in terms of taste and texture. Getting a fish that was just four days out of the water is rare in the Pittsburgh area, adds Garland, who has been in the restaurant business for 15-plus years. And having a fresher fish adds to its shelf life.
“We were doing wild before Skuna Bay because I don’t really like farm-raised except to cure it,” he says. Jackson Fish is a new business, having opened a few months ago, but already Garland says he is going through 30 orders a week for Skuna Bay salmon, which he also sells in his retail market.
He charges the same price as he does for wild and says “people like the quality and the sustainability aspect.”
Garland, who is a partner in three restaurants, is opening a similar concept soon and will include Skuna Bay, along with wild salmon, on that menu as well.
The value-added option
Another way farmed salmon is being niche-marketed is through the value-added channel, with products like smoked salmon.
Laura McNaughton, director of Delifish North America, a sister company of Marine Harvest USA, says it’s not about getting people to eat more smoked salmon, but to think about it in new ways.
“It’s not just for breakfast on a bagel,” she explains, “but taking it beyond that, like smoked salmon lasagna.” Additionally, she says, the goal is to convince consumers that smoked salmon can be an alternative to their usual protein, such as chicken.
Through various marketing channels, recipes and even changes in packaging, the message is to think about smoked salmon differently.
By going with a smaller package, says McNaughton, consumers can more easily judge their cost per meal vs. the cost per pound. The salmon is packaged in 4-ounce to 6-ounce sizes and is available in traditional sides, but also rounds and flavored portions.
The salmon, marketed under the Royal Fjord brand, is being positioned for supermarkets and specialty retailers with flavors in the hot-smoked line, including garlic pepper, chipotle and French herb.
The idea, she says, is to have a product “that stands out not just in the packaging, but in the taste. Because the taste will give us repeat business.”
In addition to the individual sizes, the Royal Fjord brand will offer 12-ounce holiday packs so there is enough to serve at a party, she says.
Contributing Editor Joanne Friedrick lives in Portland, Maine
Find other SeaFood Business articles with farmed salmon here.