« June 2006 Table of Contents
Species Focus: Atlantic salmon
Price and demand escalate amid consolidation and proactive marketing
By Rick Ramseyer
June 01, 2006
For Kirk Avondoglio, the executive chef at Perona Farms in
Andover, N.J., Atlantic salmon's appeal extends well beyond its
mild flavor and omega-3-rich profile. Equally important is the
consistent quality of farmed fish and its year-round
Indeed, Perona Farms uses 5 tons of fresh Atlantic salmon
per week to make its renowned smoked salmon, plus another 150
pounds at the hacienda-style restaurant the Avondoglio family
has run since 1917.
"In my smoking operation, if every fish is a little
different, it's going to screw me up completely," says
Avondoglio, who is also president of Food Specialties, the
division that sells smoked salmon in grocery stores and online.
"I need that consistency."
Perona Farms isn't alone in its commitment to Atlantic
salmon. The fish - which, together with wild salmon, is the
nation's third-most-popular seafood- remains a big seller at
restaurant chains such as Applebee's, Outback, Red Lobster and
It's also an all-year offering at supermarkets, club stores
and Internet retail outlets and is increasingly used for smoked
salmon and other value-added products.
That broadening reach comes despite a host of challenges and
changes impacting the farmed-salmon industry. Environmental
groups have targeted producers in recent years over myriad
including the levels of PCBs in fish. Salmon farmers,
in turn, are participating in certification programs and
ratcheting up efforts to tout Atlantic salmon's heart-healthy
benefits, while stressing that the uproar over PCBs, for
instance, stems from outdated data.
And the industry appears to be gaining ground. "Probably 90
percent of people [who eat seafood] have no problem with
Atlantic salmon," Avondoglio says.
Meanwhile, consolidation continues to alter the global
salmon-farming landscape, as big players get even bigger - most
notably Pan Fish in Norway and Cooke Aquaculture in Canada -
and Atlantic salmon prices hit their highest level in a
Demand and prices rise
Atlantic salmon, or Salmo salar , is cultivated worldwide,
primarily in Chile, Norway, Canada and the United Kingdom, as
well as Ireland, Iceland and Maine.
Chile is by far the largest supplier of fresh Atlantic
salmon fillets to the U.S. market. For 2005, it shipped 183.8
million pounds of fillets to the United States, compared with
almost 175 million pounds in 2004, according to the National
Marine Fisheries Service.
For the first two months of 2006, how-e ver, Chilean
imports were roughly 25.5 million pounds, down from 33.9
million pounds for the same period last year.
Despite that drop - which some stakeholders attribute to
higher-than-anticipated fish mortalities and a wider
international distribution of product - industry
representatives expect Chile's exports for all of 2006 to
"We still should see volume to the United States continue to
gradually grow in the fourth quarter, [though] below 2005
levels," says Jason Paine, general manager of Aquafarms
International in Miami Lakes, Fla., the U.S. sales and
marketing arm of Salmones Multiexport in Chile.
"There are definitely some product shortages, but the higher
prices seem to have somewhat curbed demand," Paine adds, noting
that Aquafarms has not reduced any of its U.S. volume.
Canada, which farms salmon on both its coasts, is another
key supplier, mostly of whole fish, to the American market. For
January and February 2006, Canada exported 25.5 million pounds
of Atlantic salmon to the United States, up from 18.8 million
pounds for the same period last year.
On the European front, Norway sent fewer fresh fillets to
the U.S. market in 2005 than the previous year, albeit 2006 may
be a different story.
Through February, Norway exported slightly more than 1
million pounds of U.S.-bound fillets, compared with just
301,324 p ounds for the same two months of 2005.
Rising demand, both here and in Europe and Japan, has led -
surprise! - to higher prices. Chilean fillets last May were in
the $2.80-per-pound range on 3- to 4-pounders; this year they
are at $3.90 to $4 per pound, f.o.b. Miami.
At least one supplier in Chile is seeing prices for skin-on,
fully trimmed fillets going for more than $4.50 per pound,
"And that's not meeting any resistance," he says.
Still, the price hike has been offset by the strength of the
Chilean peso to the U.S. dollar and the increased cost of
fishmeal, "so it's not as if we're dancing a jig down in
Chile," says Paine of Aquafarms.
"But are we doing better than we were in a $2.20 market?
In early May, prices for European fillets were averaging
$4.30 to $4.45 for 2- and 3-pound fillets, $4.40 to $4.55 for
3s and 4s, and $4.50 to $4.65 for 4s and 5s, according to Urner
Whole, farm-raised salmon, meanwhile, were listed anywhere
from $2.20 to $2.85 per pound, f.o.b. Northeast, while West
Coast fish were at $2.35 to $2.80 per pound, f.o.b.
The across-the-board higher prices have made their way into
foodservice and retail channels. At Bennigan's Grill &
Tavern, part of Metromedia Restaurant Group in Plano, Texas,
the cost of the 300-unit chain's annual contract for Atlantic
salmon has jumped 20 percent.
"We've been dealing with increases in pricing, and just
recently we've had a shortage," says Shawn Glenn, creative
services manager for Bennigan's, which annually uses a
half-million pounds of frozen salmon from Chile.
"But we can't take it off the menu, because it's just
incredibly popular," adds Glenn, citing three new $11.99
skillet entrées, including the pico-de-gallo-topped Southwest
Perona Farms is also spending more for salmon. The company,
which switched entirely to Scottish product about a year ago,
is paying around $4.50 a pound for fresh fillets.
But that's still a relative bargain compared with wild
Alaska salmon, "which costs four times as much," Avondoglio
In the retail world, the supermarket chain Hy-Vee, with more
than 220 stores in the Midwest, recently had farm-raised
Atlantic salmon fillets listed as a special for $7.49 a
And the five perishables-focused Bloom stores run by Food
Lion in the Charlotte, N.C., area offered Canadian salmon
fillets in three
varieties - signature, tomato-basil marinated
and honey marinated - for $6.99, billed as a $2-per-pound
The big get bigger
Consolidation is the watchword in the aquaculture industry
these days. And there's no better example than Norwegian
conglomerate Pan Fish.
Last month, the Oslo Stock Exchange gave Pan Fish approval
to buy Fjord Seafood, another major fish-farming business in
Norway. That comes on the heels of Pan Fish's acquisition in
March of Marine Harvest, a jointly owned creation since
February 2005 of two other huge players, Nutreco Holding and
"This is not a traditional acquisition, but a merger of
three unique seafood companies with individual strengths that
will be preserved in the new group," Atle Eide, the CEO of Pan
Fish, stated in a news release about the Marine Harvest deal.
"Such a process … will form a strong foundation for a company
with a leading global market position in the fast-growing
Pan Fish, which in 2005 produced 67,000 tons of salmon, has
stated that its combination with Marine Harvest represents 20
percent of the world's salmon production. Now, with the
addition of Fjord, Pan Fish will own up to 25 percent of
Norway's national license biomass for farmed salmon and
Cooke Aquaculture in St. George, New Brunswick, is getting
larger as well. The family-owned company is a $200 million
player after three acquisitions in 2005: Heritage Salmon's
hatcheries and processing facility in New Brunswick; Stolt Sea
Farm's East Coast farming and processing assets; and Marine
Harvest's East Coast operations.
Cooke now has about 80 farms in Nova Scotia, New Brunswick
and Maine and approximately 1,200 employees.
"Before we purchased Heritage, we had 500 employees, so this
has been a massive change for us," says Nell Halse, Cooke's
And there's more work ahead: New members of the Cooke clan
collectively lost $30 million to $40 million last year.
"That's our challenge," Halse says. "But obviously we
believe we can [turn things around], or we wouldn't have taken
Despite the world's hunger for Atlantic salmon, fish farmers
face ongoing scrutiny from environmental groups, the media and
seafood buyers over such issues as PCB levels in cultivated
fish, antibiotic use and the effects of escaped farmed salmon
on wild stocks.
Salmon of the Americas (SOTA), a trade group formed three
years ago by Chilean, Canadian and U.S. producers, is
emphasizing the nutritional merits of farmed salmon - for
starters, it's high in heart-healthy omega-3 fatty acids, -
while countering what the association sees as misleading
information in the media.
In January 2004, for example, Science magazine published a
study that claimed PCB levels are higher in farmed salmon than
wild salmon. (Polychlorinated biphenols are chemicals that were
used as coolants and lubricants in electrical equipment until
"We have people still using the data from Science magazine,
which was for fish that were tested in 2001," says Alex Trent,
executive director of Salmon of the Americas in Princeton,
"People need to think about what the PCB levels are in
farmed salmon today. They're at, or below, levels in wild
In British Columbia, "we're often the focal point for some
of those kinds of attacks," says Mary Ellen Walling, executive
director of the B.C. Salmon Farmers Association in Campbell
River. "We try to engage more effectively with different
stakeholders to improve their understanding of the industry and
lead to policy decisions that are based on good science."
Certification is another way salmon farmers are assuring
buyers and consumers that farmed salmon is produced
A high-profile example is the work that SOTA and a Chilean
trade association, SalmonChile, are doing on the Safe Quality
Foods (SQF) program. SQF, run by the Food Marketing Institute's
SQF Institute in Washington, D.C., is a food-safety and
quality-management certification initiative for suppliers that
includes training and independent auditing.
Participating salmon producers in Canada and Chile are in
various stages of implementing the program, which allows
approved providers to label their products with a distinctive
"I think you'll start to see labeled salmon [in stores]
within the next six months," says Trent.
Admiral Fish Farms in Grand Manan, New Brunswick, already is
touting the SQF logo.
The company has "made a commitment to go SQF all the way,"
Glen Brown, president, states on Admiral's Web site. "The
reason is simple - consumers expect integrity and commitment
from those who supply their food."
At least one retail heavyweight is aboard the certification
bandwagon. Wal-Mart in Bentonville, Ark., announced it will
require its Chilean salmon suppliers to be SQF-certified within
A Wal-Mart representative recently told attendees at an
event sponsored by the Technological Salmon Institute (Intesal)
that certification was the best way to assure customers that
farmed product is "safe, healthy and environmentally
Atlantic salmon has long been used to make value-added
products, especially smoked salmon. And that trend shows no
sign of ebbing.
In 2004, Aquafarms International introduced its Premium Nova
Smoked Salmon to the U.S. market. Last month, the product
received the American Academy of Taste's American Gold Medal in
the cold-smoked-salmon category.
"It's still a small percentage of our sales, but it's an
exciting product for us, and one that is growing," Paine
Cooke Aquaculture is also upping the ante on value-added
selections. It has a plant on Prince Edward Island that is now
dedicated to making value-added items, including smoked salmon,
marinated portions and kabobs.
"The percentage of value-added is on the rise - that's a
major change for us," Halse says.
In northwestern New Jersey, Perona Farms has been smoking
salmon since the late 1980s. It now devotes 6,000 square feet
of space to its on-site smoking operation on Perona's 100-acre
The company's oak-smoked, vacuum-sealed salmos comes in
multiple varieties. In early May, online prices for pre-sliced
Ming Tsai Tea Rubbed Smoked Salmon were $6.25 for 4 ounces,
$12.50 for 8 ounces and $25 for 16 ounces.
Perona Farms does significant mail-order business during the
holidays and also sells smoked salmon in supermarkets and
gourmet shops. At ShopRite stores in New Jersey, New York and
Connecticut, a 4-ounce pack retails for about $6.
All told, from Chile to Europe to Canada, industry
representatives say the outlook is promising for Atlantic
"Globally, the demand is strong, and there's no reason it
should soften," says Bert Bachmann, VP and general manager of
Camanchaca, which has salmon farms in Chile and a sales office
"It's going to be 10 or 15 percent growth [annually],
Contributing Editor Rick Ramseyer lives in Cumberland,