Both the volume and value of farmed Atlantic salmon trade globally have soared over the past two decades, but the industry must onboard innovative technology if it wants to keep up with continued demand, according to Bergen, Norway-headquartered Mowi, the world’s largest salmon farming firm.
The 2023 edition of Mowi’s annual Salmon Farming Industry Handbook suggests the industry continues to be a “good fit” with global trends, as Atlantic salmon is “a healthy, resource-efficient, and climate-friendly product.” There’s rising demand for more sustainable food and a willingness from the public to pay for it, making a product like salmon “attractive to consumers,” Mowi found.
According to Food and Agriculture Organization (FAO) estimates, worldwide Atlantic salmon consumption in 2022 amounted to around 2.6 million metric tons (MT), totaling about 1.8 million MT in product weight. Overall, last year’s total global consumption of fish was 161 million MT, which exceeded poultry (136 million MT), pork (121 million MT), and beef (72 million MT).
Atlantic salmon’s global popularity has more sharply increased since the turn of the millennium, with worldwide supply growing 186 percent from 2001 to 2022, representing a compound annual growth rate (CAGR) of 5 percent. However, during that time period, there has been a wide annual fluctuation of production, ranging from 22 percent growth down to four percent shrinkage, causing huge price swings.
Mowi’s analysis found the E.U., U.K., and U.S. are by far the largest markets for Atlantic salmon, but emerging markets such as Brazil and Asia have been growing at significantly higher rates than traditional markets. However, these regions have a higher food service share compared to traditional markets, Mowi found.
Atlantic salmon consumption increased by 4 percent in all markets over the last decade, and in the 10 largest markets, Mowi’s handbook also found. Salmon consumption per capita varied from 0.07 kilograms of whole-fish equivalent (WFE) in China to 4.16 kilograms in France. By comparison, in Norway, Sweden, and Finland, per capita consumption is between 6 and 8 kilograms WFE, suggesting that there’s still “significant growth potential among the largest markets,” according to Mowi.
The total volume of salmon sold climbed 40 percent (CAGR 4 percent) between 2012 and 2022, and the product’s value increased by 191 percent (CAGR 11 percent) in the same period. Mowi said this illustrates the strong underlying demand for salmon. In 2022, salmon’s value increased 32 percent due to strong prices and demand recovery from the pandemic.
Since 2013, farmed Atlantic salmon prices have varied between EUR 4.72 (USD 5.10) and EUR 7.87 (USD 8.51) per kilogram. Year-to-date prices for 2023 have continued to reach record-high levels on the back of strong demand and limited supply from the world’s top-producing regions, Mowi said. That shortage is largely the result of regulations and biological conditions, which Mowi said is an “essential characteristic” of the salmon market that requires analysis.
While the supply of Atlantic salmon has increased by 543 percent since 1995, with annual growth from 2012 to 2022 standing at 4 percent, Mowi expects growth to fall to 3 percent from 2022 to 2027.
“The industry has reached a production level where biological boundaries are being pushed,” Mowi said in its handbook.
As environmental measures are being implemented to reduce the industry’s biological footprint, production might be impacted. To address this, Mowi said progress is necessary in technological development, improved pharmaceutical products, and implementation of non-pharmaceutical techniques, as well as improved industry regulations and intercompany cooperation.
“Too rapid growth without these measures in place adversely impacts biological indicators, costs, and, in turn, output,” the company said.
Mowi said research and development initiatives must be focused on production methods that reduce the time farmed salmon spend in sea cages, as well as systems for farming in more exposed areas and closed sea-going units. New AI-based tools could generate efficiencies in the seawater grow-out stage, it said.
Confirming that feed is the largest contributor to the environmental footprint of farmed salmon, Mowi’s handbook proposes improvements in its formulation and manufacturing. If combined with better on-farm feed management, it could “hugely reduce” the quantity of raw materials used per kilogram of fish produced, Mowi said.
“The current carbon footprint of farmed salmon shows that it is critical to change what the salmon is fed. Simply shifting between existing feed inputs, such as from marine to terrestrial inputs, only leads to trade-offs between environmental impact categories,” it said.
The industry also needs to prioritize exploring and developing feed ingredients that close the nutrient loop in the salmon industry, reducing the industry’s carbon footprint. Developing ingredients from underutilized resources, such as products derived from insects, alcohol fermentation, and CO2 capture, is key, Mowi said.
In Q1 2023, Mowi posted its best first-quarter operational earnings before interest and taxes (EBIT) ever of EUR 321.8 million (USD 347.9 million). representing a 56 percent increase compared with Q1 2022. High prices and a tight supply-demand balance pushed its revenue for the period to an all-time high of EUR 1.36 billion (USD 1.5 billion).
In 2022, Mowi harvested a record 464,000 MT of salmon and expects that total to increase to 484,000 MT this year. The group harvests around one-fifth of the salmon produced in Norway and approximately one-third of total production in both the U.K. and North America.
Photo courtesy of Mowi
