The years that have followed Lerøy Seafood Group’s 2017 acquisition of fishing company Havfisk and whitefish processor and distributor Norway Seafood in 2017 have been “interesting” and “a little bit more challenging” than Lerøy CEO Henning Beltestad thought they would be at the outset, but he said at the 2023 North Atlantic Seafood Forum (NASF) the journey has been “fantastic” and there remains “huge potential in this part of the value chain.”
Today, alongside its salmon-farming business, the fully integrated company has a wild-catch segment that comprises Lerøy Havfisk – Norway's largest fishing company, which owns and operates 10 trawlers and has 10 percent of the Norwegian whitefish quota, and Lerøy Norway Seafood, which has 11 factories and takes catches from more than 600 fishing vessels.
Its own annual catch volume stands at around 72,000 metric tons (MT), mainly comprised of cod, haddock, saithe, and shrimp.
The company is targeting NOK 50 billion (USD 4.8 billion, EUR 4.4 billion) in revenue by 2030. But by 2025, it hopes to harvest 205,000 MT from its fishing operations and achieve earnings before interest and taxes (EBIT) in excess of NOK 500 million (USD 47.9 million, EUR 44.2 million) from its wild-catch segment, according to Beltestad. In 2022, its wild-catch EBIT was NOK 347 million (USD 33.2 million, EUR 30.7 million).
“That [2025 date] is not too far ahead so we have to run. We have to be fast,” he said. “But we have done a lot, and we are in a good place for achieving that.”
In addition to installing upgrades on its catching vessels, Lerøy has invested heavily in its processing factories, most of which are in northern Norway. That will continue in 2023 with a new NOK 200 million (USD 19.2 million, EUR 17.7 million) investment planned for its Båtsfjord factory, mainly to enhance its automation.
Having Norwegian raw materials and Norwegian processing is important for Lerøy’s customers and for the company itself, Beltestad said.
“The wild-catch segment has a lot of opportunities, which will give our company more strength out in the market. To be a total supplier of seafood, with wild catches of whitefish [and farmed salmonids], is extremely important for our customers and makes us uniquely positioned,” he said. “We were not experts in whitefish, but to bring this category up to the level that we are at with salmon today means we have to work a lot with innovations and product development, making all the whitefish species available in supermarkets and other segments. We have been working hard on that – building the demand for our products.”
Beltestad said the dynamics of the whitefish and salmon markets are very different from each other and pose very different challenges. Whitefish prices have been on a positive growth trend going back to 2017, with “top prices” achieved in 2022 for cod and haddock, alongside a more-stable price position for wild-caught shrimp, he said.
Looking ahead, Lerøy also sees great potential in the development of saithe as a product, probably surpassing haddock in value.
“We see a very good price development for that product,” he said. “With the high prices of some other [species], saithe has become the most-popular product in retail. It’s a good opportunity as a ‘price fighter’ or a convenient product for our customers,” Beltestad said.
Now is also a good time to get behind Alaska pollock, American Seafoods Group CEO Einar Gustafsson said at NASF. The head of the Seattle, Washington, U.S.A.-based company, which harvested around 350,000 MT of Alaska pollock in 2022, said efforts to expand the uptake of the species beyond the quick-service restaurant (QSR) sector are underway, with more filleted products entering the prepared-meal section of retail chains, including Whole Foods, and even on to the menus of white-tablecloth restaurants.
Highlighting its affordability and sustainability credentials, Gustafsson described pollock as “the perfect protein,” and suggested that if the species was any larger in size that it would “definitely be fighting for the center-of-the-plate with the mighty cod.”
But he insisted that to elevate the fish further with consumers, and to “make our great product even greater,” supply chains would need to move away from supplying twice-frozen pollock, as customers are being driven away by negative experiences with overtreated products.
“In order to make pollock better, and seafood in general, we have got to stop the soak,” Gustafsson said. “[Imports of twice-frozen pollock] is decreasing, but every day that people are eat double-frozen, sodium tripolyphosphate-soaked fish, we lose another customer for life.”
Photo courtesy of Jason Holland/SeafoodSource
