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Top 10 Species: Farmed salmon

Consistency helps species sales rise as consolidation maintains quality

By Thyra Porter
June 01, 2007

Atlantic salmon is praised by chefs for its flavor and supply consistency, factors that make the farmed finfish a staple for commercial operations ranging from smokehouses to chain restaurants, as well as supermarkets and club stores.

All salmon - both farmed and wild - boast a plethora of heart-healthy omega-3 oils, one reason salmon is the No. 3 seafood pick in the nation among consumers.

But it is consistency, consistency, consistency that matters to those in the foodservice business and to home cooks as well. Keen to that fact, farmed salmon producers are geared up to deliver exact portion sizes, fat content and the perfect flesh color to both restaurant and retail clients alike.

One of the keys to consistency is supply. Chile is the largest supplier of fresh Atlantic salmon to the United States and is increasing exports every year. In 2007 it shipped nearly 44 million pounds of fresh fillets to the United States from January to March, compared with about 40 million for the same period in 2006, according to the National Marine Fisheries Service. Chile is by far the leader in terms of frozen fillets, too, with 15 million pounds for the same period.

Canada is the next largest supplier of Atlantic salmon to the United States, exporting some 2 million pounds of fresh fillets for the same period this year, down from 2006 when it exported nearly 4 million pounds in the first three months of the year. Imports of fresh whole fish from Canada are also down from almost 39 million pounds in 2006 to less than 3 3 million pounds 
this year.

By far the greatest amount of farmed salmon, about 80 percent, is consumed fresh. Harvesting year-round makes fresh salmon available every month of the year. The majority of smoked salmon is farmed, according to the Salmon of the Americas 
Web site, which is an organization of salmon-producing companies in Canada, Chile and the United States.

The reliability of farmed salmon makes a big difference to professional chefs such as Steve Corry, chef/owner of Five Fifty-Five, a Portland, Maine, upscale restaurant. Corry was recently named to Food & Wine magazine's prestigious list of the top new chefs of the year.

While many white-tablecloth restaurants opt for wild salmon, farmed salmon is a regular on Corry's menu, thanks to an increasing supply of organic product that achieve the quality standards he is looking for.

Right now Corry sources farmed salmon from Ireland and Scotland. He relies on his distributor, Portland-based Browne Trading Co., to recommend a farm that doesn't use antibiotics or artificial feed.

Increasingly, Corry, like other chefs and consumers these days, is looking for salmon sources that are sustainable yet affordable.

"If you put wild salmon on the menu it demands such a high price that we usually won't sell it all," Corry says.

"The quality of the farmed fish we get from Scotland and Ireland is beautiful; all uniform size and very, very fresh. I also know I can get it at any time, which is a real benefit, but we do rely on the distributor to make sure that the fish are raised in an environmentally sustainable and responsible manner."

It isn't only upscale eateries like Corry's that appreciate quality farmed salmon. Chain restaurants such as Applebee's, Outback, Red Lobster and Bennigan's have long counted Atlantic salmon as a top seller on menus where consistency is valued, say the marketers who sell to those restaurants.

Indeed, producers love Atlantic salmon too: Prices, they say, have stabilized from a year ago, according to Bert Bachmann, VP and general manager of Camanchaca, which has salmon farms in Chile.

Last month, fresh, PBO Chilean fillets were holding firm in the mid-$3 to mid-$4 range, f.o.b. Miami, according to Urner Barry Publications of Toms River, N.J. Fresh whole fish from Canada was tagged in the low- to mid-$2 range, f.o.b. Seattle and Northeast.

Bachmann says sales of Atlantic salmon have continued to increase over the past year.

"The product is available in very user-friendly formats," says Bachmann, as one reason for 
that uptick.

"Sales have been good, demand has been strong and supply has increased marginally," although he adds supply "is less robust" than in previous years.

Overall, he adds, increased marketing efforts have helped raise awareness of the health benefits of all types of salmon, buoying prices.

Perhaps no where is the adage "a rising tide raises all boats" more true than in the Atlantic salmon world, says Rodger May, owner of both Seattle-based American Gold Seafoods, which raises farmed salmon, and processor Smoki Foods. Both firms are on track to do $125 million in sales this year.

May notes that a flurry of news articles comparing the health benefits of wild and farmed salmon have only served to raise awareness of the category. He expects to see a continued rise in sales for farmed salmon this year, thanks in part to the media attention the species is receiving.

May agrees with Corry that consistency is a large part of the success of farmed salmon in both consumer and commercial businesses. "With farmed salmon the average home cook consistently gets a salmon with 16 percent oil content, which means she'll cook it the same length of time and it will come out perfect, as opposed to getting a piece of fish with a 13 percent oil content one day and a 6 percent content the next."

Fish pieces cook at a different rate depending on the oil content, he explains. May says a consistent oil content helps home cooks become more confident in cooking salmon, because their recipes will work the same way every time. And more confident cooks eventually mean more Atlantic salmon sales at the grocery fish counter.

That consistency also helps Atlantic salmon stake a claim in the smoked salmon business, May says, where large-scale smoking techniques depend on the producer knowing that the 
raw product will meet set standards (see Smoking techniques, page 28 and Smoked seafood, page 38).

However, "Fresh sales is the market that keeps growing," says May, who adds that one major trend is a narrowing in price between Norwegian and Chilean salmon. To that end, he says Chile is more focused on the market for frozen fish, and will ultimately be "a better executor in the frozen program business."

As consistency in texture is the value-added feature for Atlantic salmon in the kitchen, consistency in price is the reason commercial buyers turn to Atlantic salmon, Bachmann says.

"Pricing is almost in line with a year ago, and will probably stay in this range," he adds. No one is talking about a major rise because foodservice operations want pricing stability, says Bachmann.

"There's more programming business now," he says of the foodservice industry. "Most restaurant people don't want to change the menu every week."

Keith Moores, president of F.W. Bryce in Gloucester, Mass., agrees. Now part of the Nissui family thanks to a buyout in 2006, F.W. Bryce has long been one of the largest importers of Norwegian frozen farmed salmon portions into the U.S. market.

F.W. Bryce specializes in the marketing and distribution of frozen fish and seafood into the United States and last year became part of the growing trend toward consolidation in the industry as the result of a stock purchase agreement with Nippon Suisan.

Other recent major consolidation deals include Pan Fish buying Fjord Seafood, a Norwegian fish-farming business, and Marine Harvest, a joint venture between Nutreco Holding and Stolt-Nielsen.

As with many of the consolidation deals in the aquaculture business, the ability to leverage F.W. Bryce's strong customer relationships with Nissui's global supply of quality seafood means that there is a long-term goal of increasing the worldwide market for Atlantic salmon, says Moores.

Even as U.S. consumers become more comfortable with both ordering salmon on the menu and cooking it at home, producers and distributors see Atlantic salmon as an increasingly international product, thanks again to the consistency factor, which has a geographic element.

Moores, for instance, views Chile as a prime exporter to the U.S. market. Norway is geographically better positioned to take on Europe, where an environmentally sensitive awareness to how much fuel is expended when shipping a food source is far more of an issue than it is in the United States, says Moores.

"Some of our bigger European buyers are very interested in what our carbon footprint is," he says.

But in the end, Moores and his colleagues note the larger challenge for the market is that wherever it is served, farmed salmon ultimately must compete with other protein sources for a place on the dinner plate.

Again, that goes back to being dependable all the way down the supply chain, from the farm, to shipping, to the stovetop.

"If a restaurant group is serving other proteins, execution of a strong business model is imperative," Moores notes. "It means making sure that inventory flows predictably and that a product needs to perform in the same way every time."


Thyra Porter is a freelancer writer in Cape Elizabeth, Maine


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