Established 20 years ago through the privatization and merger of New Zealand’s two largest salmon companies, New Zealand King Salmon is a vertically integrated salmon farming, processing and marketing firm with an annual turnover of NZD 115 million (USD 82.1 million, EUR 73.4 million). Owning and operating 11 sites in the Marlborough Sounds of which eight are being farmed, it is the world’s leading producer of king salmon (Oncorhynchus tshawytscha), accounting for around half the global harvest. Its core brands include Regal, Southern Ocean and premium foodservice brand Ōra King. Soon it will list on both the NZX Main Board and the ASX after receiving strong support for an initial public offering (IPO).
New Zealand King Salmon CEO Grant Rosewarne guides SeafoodSource through the king salmon sector and gives his opinion on where the main growth will be seen in the future.
SeafoodSource: Please could you provide some context on the king salmon aquaculture sector and the volumes being produced?
Rosewarne: There are six main producers in the world. Five of these companies are in New Zealand and there is one in Canada. Combined, the total annual production currently stands between 12,000 and 14,000 metric tons (MT) and this output has been flat in recent years.
If we include wild king salmon too, the total volume available to the global market is around 23,000 MT, which confirms there’s now a 50:50 split between farmed and wild. Of that farmed output, New Zealand King Salmon provides half or 6,000 MT and currently around NZD 50 million (USD 35.2 million, EUR 32 million) of our salmon is being exported.
SeafoodSource: In volume terms, what are the main overseas markets for your salmon and where is the most growth being seen?
Rosewarne: The United States is our most important export market, followed by Australia and Japan. We also export to a further 20 countries – from Hong Kong to Taiwan and Europe to the South Pacific. The most growth seen last year was in the States, but while this is a traditional king salmon market, what our research found was that U.S. diners really appreciate knowing where their food is coming from and why it deserves to be on their plate.
We often make an analogy with wagyu beef when we talk to chefs and restaurateurs, whereby if they have wagyu on their menu then likewise they should have Ōra King on it too. Like wagyu beef, Ōra King is a superior “best of breed,” the result of great husbandry and environment, and many chefs and restaurateurs have clearly bought into this because they are paying a premium price to put it on their menus. Telling the story behind the product – that’s a big part of our strategy for our brands, whether that’s in retail with Regal and Southern Ocean or in foodservice with Ōra King.
SeafoodSource: New Zealand King Salmon has established a number of brands, could you explain where each fits into the marketplace?
Rosewarne: We are steadily moving toward 100 percent branding across all of our products, from a current level of around 60 percent. Ōra King is the result of our own unique breed of king salmon – now on to its seventh generation – that, like wagyu cattle, has been classically bred for its color, size, flavor, fat content and so on. These fish are reared expressly for chefs in the Marlborough Sounds, which is of course also famous for many great Sauvignon Blanc wines.
Next is Regal, our main retail brand, which comprises many different king salmon cuts and smoked salmon products. We also have our Southern Ocean brand of smoked salmon products that focuses on family and health. And now, we have also just launched a pet food brand, called Omega Plus, that’s based on the concept of smart, healthy pets and providing dogs and cats with long chain omega-3s.
Moving forward, we will certainly be expanding our Ōra King exports into more geographic areas. The thing about Ōra King is it’s a very different breed of salmon than that from the other five producers – we’ve been breeding this salmon for over 20 years to deliver exactly what chefs want, so we’ll certainly push more Ōra King into more areas moving forward.
SeafoodSource: With new farms now coming on stream, what levels could your production and exports potentially reach in the next 5-10 years, and which markets offer the most potential?
Rosewarne: The new farms will enable us to increase output all the way up to 12,000 MT, and we certainly expect to be at around 11,000 MT within 10 years, by building up production in a carefully phased way. In terms of markets, we expect the United States to continue to be very important to us. New Zealand will continue to be one our largest markets with the appreciation that exists here for premium food, but we are certainly looking at the Middle East as well as China, Thailand and other areas in Southeast Asia. I believe we will continue to expand in all those areas. Our plan is to also brand all of our by-products and Omega Plus is the first example of this.
As our production increases, the Ōra King brand will be the main beneficiary as it achieves a premium margin. We have learned that chefs want a whole, perfect fish to work with, which Ōra King provides. We have tried supplying them with sides of smoked Ōra King salmon, but they don’t want it; they want to take a whole fish and smoke it themselves. Of course, Regal will benefit too, as will Omega Plus. We will then launch into pharmaceuticals and nutraceuticals and other areas, but these other brands will require more elaborate manufacturing processes.
SeafoodSource: How have farmed king salmon prices compared with those paid for farmed Atlantic salmon this year?
Rosewarne: Our king salmon prices are up around 80 percent on Atlantic salmon at present. We have been 200 percent higher, but the price of Atlantic salmon has been high for the last year or more. However, we are not affected by the Atlantic salmon sector and the commodity prices there; king salmon is a very different fish entirely.
SeafoodSource: Lastly, what are the main opportunities and obstacles for king salmon as a seafood product in the marketplace?
Rosewarne: The main problem for us has been on the production side, specifically obtaining enough water space and licenses to be able to grow. While we are currently producing 6,000 MT, but we think our potential is about 120,000 MT. There’s no issue on the demand side – there’s huge demand for our brands. It’s all about water space and resource consents. Also, there’s no specific king salmon diet at present; they are fed on an Atlantic diet or sometimes a trout or coho diet, but we need to come up with a diet especially for kings. In this regard, a project is underway to create a first king salmon diet and the first trial batch has just arrived.
