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Revitalising the fish farming sector through science

The case of Norway

byViggo Halseth

Director of Marketing and Product DevelopmentNutreco Aquaculture Research Centre, Norway


BelgiumBelgium

ChileChile

JapanJapan

NorwayNorway

Great-BritainGreat-Britain

SpainSpain

ItalyItaly

FranceFrance

PortugalPortugal

NetherlandsNetherlands

Central EuropeCentral Europe

GermanyGermany

CanadaCanada

United StatesUnited States

AquacultureAquaculture

AgricultureAgriculture

Nutreco - International Spread


Nutreco Aquaculture Research Centre(ISO 9001 certified )

• Established January 1989

• USD 9 million investment

(NOK 72 million)

• 45 man years per annum

• Analytical laboratory

• Research station

• Pilot plant

• Marketing / Communication

Nutreco Aquaculture spends about USD 8.75 million (NOK 70 million) annually on R & D


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1993 1994 1995 1996 1997 1998 1999

Farmed SalmonFarmed SalmonFarmed Salmon(M

T)

• World’s fastest growingfood sector

(Food and AgricultureOrganisation of theUnited Nations, Feb. 2000)

• Fast, emerging industrywith its own unique andunexpected technology

(Peter Drucker, Beyond theInformation Revolution, Oct.1999)

Key commentsKey commentsKey comments

21%Annual growth

1987-2000

Norway Chile UK OthersN.America

Today’s Salmon Supply


kg per capita1999

kg per capita1999

Annualgrowth‘94-’99

Annualgrowth‘94-’99

Japan 72 0.32 10%

USA 7 0.62 22%

Spain 41 0.64 5%Germany 11 0.94 9%

UK 18 1.33 12%

France 25 1.81 5%

743 MT

384 MT

OtherCountries

Total fishconsumption

(kg per capita)

Total fishconsumption

(kg per capita)

1994 1999

Consumption of Atlanticsalmon

Consumption of Atlanticsalmon

Consumption per capita and shopdistribution still low

Consumption Farmed Atlantic Salmon


4 Healthy: High in Omega 3

4 Tasty: Not too ‘fishy’, relatively boneless

4 Convenient: Easy to prepare, often ready prepared

4 Versatile: Smoked, hot / cold, meal centre / ingredient

4 Value: Increasingly competitive

Salmon portions

Salmon Kebabs

In line with long term consumer eating trends:


Catches of wild fish - World Wide

(Source: FAO)

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1960 1965 1970 1975 1980 1985 1990 1995 2000

1000

000

tonn

es


Technical development that have supported the strong growth of salmon farming

Cost of production

Production pr manyearFeed conversion rate

Survival


Norway -The strongest innovative cluster insalmon farming - Why?

- High labour cost (blue collar)- High education level - also in aquaculture- Role of feed suppliers / universities / research- Open culture - fast mitigration- Good infrastructure (IT/Roads/Airports)- Well balanced steering from authorities on health and environment- New: 0.3% R&D fee on all salmon in addition to 2.5% on Marketing


Future growth is driven by retail andfocused at fresh and value addedproducts

• Modern retail accounts for over 50% in all main markets

• USA is the new frontier for future growth

• Growth mainly in fillets and value added products

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Volume

Time

Whole salmon

Fillets & portions

Pre-packed

Ready-meals


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800

1976 1984 1988 1992 1996 2000

1994 1999E

• Norway 360 180

• Chile 65 35

• UK 40 20

• Canada 40 7

• US 22 5

• Faeroe 30 15

• Ireland 15 4

• Other 20 5

• TOTAL 592 271(Source: Kontali Analyse AS)

Number of playersNorway

Number of playersWorld

Norway fast consolidating butstill relatively fragmented

Consolidation salmon industry


Norway, traditionally strong:- Fish Health- New raw materials for fish feed- Cost reduction - still great opportunities in all parts of the value chainNorway, traditionally weak:- New species- Market segmentation and product differentiation of salmon (Further processing)- Environmental impact farming.

Challenges - need for innovation to sustain growth


The innovative climate in Norwegian aquaculture - the good and bad experience

• Salmon farming has had a lot of small, but important, innovation projects that have been fast implemented. The projects have to a large extent been prioritised by the industry, with good ownership and close cooperation with science.• New, marine species have not had much success.

• Low ownership in the industry• Grants spread thin to many universities• Researcher driven


The innovative climate in Norwegian aquaculture - is the industry ready forthe next step?• From farmers and fishermen to industry in 10 years• R&D has to a large extent been problem solving, or “good idea” driven projects of 4-18 months.• Farming and primary processing of salmon is about managing a high number of “low tech” processes.• From experience, only one unique invention of major importance - Astaxanthin from H.I. Roche• With the consolidation of the industry, there is expectations that the industry take a greater responsibility in defining development needs!!


The innovative climate in Norwegian aquaculture - is Norway the right place?

• Further processing need more focus to maintain the growth in salmon, but should it happen in Norway?

• Closeness to market• Trade barriers• Norwegian raw material culture• Low paid jobs

• Norwegian aquaculture should invest in developing VAP, but not necessarily in Norway or with Norwegian partners.


The innovative climate in Norwegian aquaculture - need creativity and newcompetence.• Productivity gains (5x production, 1,3x no. of jobs) have reduced the chance for a job in aquaculture.

• Problems keeping lower education in Aquaculture going• Challenge to avoid “inbreed” in the industry.• 5 universities have aquaculture science in their program.

• 3 universities should focus on Aquaculture, with complementary focus areas, regularly exchange of people with the industry and educate a relative high number of technical specialists, in addition to general aquaculture education.


The innovative climate in Norwegian aquaculture - is Norway competitive forhosting research?

• Aquaculture is a global industry, with its global information flow.• Norway is spending less than most developed countries on Research.• Funding and/or tax refund is not favourable in Norway, compared to the major part of Europe.• Norway has lost competitive advantage ashost for aquaculture.

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