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« May 2008 Table of Contents

Top 10 Species: Farmed salmon

ISA, antibiotic misinformation plague salmon importers

Despite some negative press this spring, the farmed salmon industry continues to flourish as retailers and the foodservice industry continue strong sales of the omega-3 fatty acid-rich fish. Restaurants are offering salmon with unique sauces and cooking methods, as well as including it in more of their fresh sushi options. Supermarkets are having success with value-added salmon products, such as crab-stuffed salmon, which consumers view as a quick, healthful meal.

Yet U.S. importers and retailers who source farmed salmon from Chile have recently been wringing their hands over the media uproar regarding infectious salmon anemia (ISA) and the country's farming standards. While in the short term the U.S. farmed salmon supply could see a dip because of ISA at some farms, overall demand is expected to stay consistent this year.

"The volume may be a little less … mainly because of the ISA issue," says Laura McNaughton, director of farmed salmon group Salmon of the Americas in Miami.

"ISA has had very little impact as an industry in Chile, representing less than 1 percent of production. In the past six months, ISA has been mainly concentrated on one salmon producer," says Jason Paine, general manager of Multiexport Foods in Miami.

Overall, farmed salmon imports rose from 431 million pounds in 2006 to 448 million pounds in 2007. Before ISA took hold, the Chilean supply was already steady to lower, industry sources say. However, imports of fresh farmed salmon fillets from Chile rose in 2007 to nearly 174 million pounds, up from 156 million pounds in 2006, according to National Marine Fisheries Service data.

Still, The New York Times article in April [see Newsline, p. 8] may dampen demand. SOTA says the report was filled with inaccuracies, including that farms use banned veterinary drugs.

"Our biggest problem is that article. It was not correct, and the Chilean government said the Times was negligent," says 
McNaughton.

At the same time, she says the issue will likely only curb consumer demand in the short term. In addition, the issue may temporarily increase interest in farmed salmon from countries besides Chile.

"At first glance, this presents an opportunity for Canadian growers. At the same time, when one part of the industry gets a black eye, the whole industry gets a black eye," says aquaculture industry consultant Alex Trent.

ISA is not the only issue that may impact farmed salmon sales in the future. Consumer groups are continuing litigation in California against several supermarkets, including Safeway, Albertson's and Whole Foods Market, alleging that the retailers did not include labels that farmed salmon is "artificially colored" because fish feed contain carotenoids that determine the color of the salmon's flesh.

Unfortunately, some of the coloring issue stems from misinformation from environmental groups.

"We have seen some blogs where consumers think salmon pieces are injected with dye one at a time," says McNaughton.

At the same time, in the past year retailers have not noticed a sales 
impact linked to the color issue.

"Our sales dipped a few years ago when the news came out, and we have seen some migration to wild," says Scott Nettles, business director of market/seafood for United Supermarkets of Lubbock, Texas.

Supply, prices steady

Despite myriad controversies, the farmed salmon industry continues steady to higher volume.

"We will probably see a shortage of supply from Chile in the last six months of this year, and the industry will be at about the same level as 2007 or a little less," says Paine.

Although supply from Chile may be down over the next year, supply from Norway, Canada and other countries is increasing. Salmon imports have risen about 3 percent so far this year, compared to the same time last year, according to Paine.

"In Norway, we saw about 20 percent growth last year, and it is projected to have 9 percent growth this year," Paine says.

Canadian supply is steady to higher, suppliers and consultants say. Because the country's strict government regulations prevent overcrowding, Canadian numbers do not spike significantly from year to year.

"We buy Canadian farm-raised. We shifted off of Chilean a few years ago, when size and supply was an issue," says Nettles of United 
Supermarkets.

"Supply has been matching demand. The Chileans keep announcing heightened forecasts, but it just hasn't come to market yet," says Keith Moores, president of F.W. Bryce in Gloucester, Mass. In addition, Chilean suppliers want to offer more frozen salmon, but the market is resistant to that, says Moores.

And Chilean farms need to take some time to manage ISA.

"For them to conquer ISA, they will need to reduce production by 50 percent over the next five years. The only way to get it under control is to reduce population densities," says Trent, former SOTA director.

In general, farmed salmon prices have remained steady to slightly higher, buyers report. While the high cost of fuel has caused big price hikes of some foods, including beef and poultry products, salmon has remained fairly unscathed.

Relatively steady salmon prices helps with consistent sales.

"It is still a matter of price point. With the way the economy is, people will have to stay with farm raised," says Doug Goodman, seafood manager and buyer for grocer Stew Leonard's of Yonkers, N.Y. Still, sales of natural farmed salmon, which retail for about the same premium price as wild, are up 10 percent to 15 percent over last year, according to Goodman.

In addition, the industry is starting to see some increased pricing due to "inflationary pressures," says Moores. "In a place like Chile, you try to keep your costs as fixed as possible, but sometimes they're hard to control."

Salmon demand has remained steady to slightly higher in recent years, fueled by its use in sushi, consumers preparing it at home and restaurants trying new preparations.

"The general public is feeling more and more comfortable with salmon, and farm-raised fish have gotten much more safe, as far as the way critics look at it," says Daniel Stewart, corporate chef for Rockfish Seafood Grille of Richardson, Texas. Rockfish uses both farmed and Copper River salmon, when it is in season.

While overall demand from both the foodservice industry and retailers has been good, the farmed salmon industry has not experienced the double-digit growth of about five years ago, according to Paine. In order to experience the same rapid growth, the industry needs to more aggressively promote salmon and its benefits, say Paine and other observers. To that end, SOTA plans to step up its national promotional efforts with a national consumer campaign to promote farmed salmon this year. The organization already advertises in consumer and trade publications, along with medical journals.

"People are confused about the benefits of seafood. We have to focus on medical studies and research, including the [National Oceanic and Atmospheric Administration] study that salmon had the lowest mercury risk and was the highest in omega-3's," says SOTA's McNaughton.

Salmon's popularity rises

Farmed salmon's popularity at casual-dining restaurants as well as continued promotion in supermarkets has led to more consumers eating salmon on a regular basis.

Restaurants are developing unique sauces and glazes to complement the finfish. Atlanta-based Bugaboo Creek Steak House's Bourbon Marinated Salmon is very popular, as well as its Salmon and Scallops Cedar Plank.

"We have had a great return on the guests coming back for Cedar Plank Salmon," says Phil Butler, Bugaboo Creek's director of food and beverage.

Value-added salmon products have also boosted supermarket sales. United Supermarket's Mediterranean Crusted Salmon sales continue to grow and Salmon Wellington, added earlier this year, has been popular as well, says Nettles. The Salmon Wellington from Beaver Street Fisheries of Jacksonville, Fla., is a stuffed salmon wrapped in philo dough that can be baked or deep-fried.

"We have had the Wellington for just a couple of months, and it has just done great," says Nettles.

United Supermarkets uses frozen, pre-portioned, boneless, skinless 6-ounce portions from Morey's of Minneapolis, and Nettles says sales are increasing.

United has boosted sales by switching from pricing its salmon by the pound to by the portion. The 6-ounce portions retail for between $2.99 and $4.99 each, depending on the promotion.

Christine Blank is a freelance business writer and editor in Lake Mary, Fla.

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In addition, buyers say they are happy with farmed salmon's consistent supply and quality.

"We've seen mostly quality improvements year after year, due to increased production and logistical capabilities," says Moores.

"[Farmed salmon] is becoming a dietary staple, not a luxury. And retailers are behind it because of its promotability," says Moores.

"The market is still offering a lot of opportunities to increase consumption, because consumers want more and more healthy food, and salmon is the best vehicle for omega-3's," says Paine.

Cedar Plank Salmon with Shrimp and Salmon Salad are two popular Rockfish entrées.