As a food, farmed Atlantic salmon is a special fish. Highly-prized across traditional and new seafood markets, the unwavering growth in consumer demand for salmon has shown little sign of flagging. Its considerable global uptake is largely attributable to its healthy profile, which itself is underpinned by a high protein and omega-3 fatty acid content, as well as being a key source of important vitamins and minerals.
Thanks to a supply that has grown by more than 400% in the past 25 years, farmed Atlantic salmon has grown to be the world’s most widely available salmon product. It’s also one of the top three most popular seafoods in the western world. Consumption has also been rising at a rapid rate in many other regions, as it successfully competes with other proteins, including beef, pork and poultry.
Led by the producing nations of Norway, Chile, Scotland and Canada, the global market for this fish is today valued at several billion euros, with recent calculations putting total sales at well over €20 billion. Much of its strength has stemmed from its ability to capitalise on emerging food trends with relative ease such as sushi and poke.
Meeting this demand with raw materials has also been crucial. Tom-Jørgen Gangsø, Director of Market Insight with the Norwegian Seafood Council (NSC), told the recent North Atlantic Seafood Forum (NASF) 2023 conference that over the past 10 years, the Atlantic salmon industry’s volume had grown by 30%, with Norway’s own production up 32%.
With regards to export markets, he confirmed Asia had grown its salmon purchasing by 34% since 2013, with its biggest Atlantic salmon markets of China, Korea and Thailand experiencing “huge growth” in the period.
Last year, the region accounted for 15% of total global Atlantic salmon exports. This was achieved despite market access challenges, transportation issues due to the war in Ukraine and pandemic-related shutdowns, Gangsø said, highlighting that the closed airspace over Russia meant that exports to Japan and South Korea were down in 2022.
“Overall, exports were quite solid in 2022, but I think the numbers would have been higher if it wasn’t for the war in Ukraine.”
According to Gangsø, Norway has experienced the highest growth in volume, but Australia has established a remarkable growth rate, especially with regards to putting volumes into China and Indonesia.
“South Korea, China and Thailand are also outpacing the average market growth. We believe that Asia will become even more important, but it depends on the market access.”
The key to growing Atlantic salmon markets is having a strong position in the minds of consumers, and efforts to “reach more people, more often” should include offering convenient products and the development of new formats, Gangsø said.
“We believe that salmon has few substitutes and that it will be strong in the market for many years to come.”
Record volume decline
However, the salmon farming industry is certainly not without its challenges. It’s long been recognised that conventional cage farming in coastal zones offers only limited scope for further production growth, mainly due to the licensing constraints put in place by regulatory authorities and also because of very costly biological challenges such as sea lice. It has also been identified that feed is another potential limiting factor – specifically access to the ingredients traditionally used in salmon diets that are sourced from capture fisheries.
Solutions to both issues are actively being sought, such as new technologies and techniques that produce the species in closed containment systems, either on land or in remote offshore locations, and R&D focused on delivering new feeds via alternative or novel ingredients.
With the overall supply levelling off, these innovations and their acceleration can’t come quick enough for producers and consumers alike.
Ragnar Nystøyl, CEO of research group Kontali, told NASF 2023 that there was a significant value growth in the farmed Atlantic salmon sector last year, as a result of the record-high prices seen in the market, the actual supply decreased by 1%.
Nystøyl highlighted that the 6% volume decline seen in the first-half of 2022 was a level that hadn’t been seen before.
Europe saw no growth supply in the second half, and going into 2023, Kontali’s estimated that the region’s biomass was 2% lower than last year. At the same time, the Americas’ biomass was 7% lower, and this was on top of a decline in 2022.
For both regions, this trend could be partly attributed to flat aquafeed sales, Nystøyl said.
Resource tax concerns
Kontali projects this year’s global supply will grow by slightly less than 2%, which will return it to the level seen in 2021.
Assuming there are no biological issues or unexpected events that cause a production decline, it has forecast global production will be just over 2.9 million tonnes. Of this, Norway is expected to increase production by 3% to more than 1.5 million tonnes and Scotland’s harvest will rise 8% to 183,000 tonnes, but Chile and Canada will experience declines of 2% and 5% respectively to 739,000 tonnes and 128,000 tonnes.
“But this year-on-year growth is dependent on an increase and improvement in productivity levels and yields in the second-half of 2023,” Nystøyl said.
Demand will remain strong in 2023 – riding out broader economic issues such as lower disposable incomes, but that isn’t to say that for some consumers choosing salmon will no longer become viable – they will down-trade, NASF heard.
Norway’s Atlantic salmon farming sector is also likely to see further disruption as a result of government plans to introduce a new resource tax for salmonid farming operations. Announced in September 2022, the initial proposal sought to place a 40% resource tax requirement for all salmon and trout farms harvesting 5,000 tonnes or more per year, with the government wanting to divert a portion of the monies generated to improved social infrastructure, particularly for the coastal communities that accommodate aquaculture. This new tax would be on top of a 22% corporation tax.
At the time of writing, the proposal had been adjusted with a 5% lower tax level. Nevertheless, observers have estimated that expansion plan investments amounting to some €3.5 billion have already been mothballed by unhappy producers, while €4.4 billion immediately disappeared off industry share prices.
The proposal needs to be approved by Norwegian parliament, with the industry expecting final clarification before the summer.
