If you are an Alaska commercial fisherman or someone who simply cares about the fate of the state’s small, rural communities still dependent on commercial fishing as their economic reason to exist, you can consider the man in the expensive suit above the devil.
He is Norwegian Bendik Søvegjarto, chief executive officer of a company called Bluegrove.
A 2012 graduate of the University of Oslo, he is an entrepreneur, a technocrat and a would-be economic revolutionary. He and Bluegrove want to transform the way salmon are raised.
“As population growth escalates, we must find ways to provide nutritious and protein-rich food from the world’s finite resources,” he said in a media statement when the newly formed Bluegrove launched at the end of June. “It is therefore essential that we increase seafood production in ways that are not only sustainable but also cost-effective. Cost reductions will obviously make seafood producers more competitive and more profitable, even as the seafood they make becomes more affordable for their customers.”
The key phrases there – if you are an Alaska commercial fishermen – are “cost reductions” and “more affordable.”
Not counting Alaska’s commercial hatcheries which call their operations “ocean ranching” and insist they aren’t in the farming business, salmon farmers produce more than seven out of every 10 salmon eaten in the world today.
Because of this, they control the market, and their market share just keeps growing. You can badmouth farmed salmon all you want if you are a commercial fisherman making money off wild fish or an Alaska who believes, as most of do, that the state’s wild fish taste better even if they came up losers in a Washington Post taste test, but you cannot ignore economic realities.
Maybe the trendy, upscale chefs the Post pulled together for its test didn’t know diddly about how a salmon filet should look – “some samples had either the large flake and high-fat content that gave them away as farmed or the finer grain and meaty texture that identified them as wild, we could not consistently tell which was which” – or taste – “one thing…is certain, you’ll never catch any of us saying wild salmon tastes better than farmed”, but the market has decided that farmed salmon and wild salmon are close enough in taste that price matters and matters a lot.
Alaska might – might – be able to get a premium for its product in some markets, but it isn’t that much of a premium, and even that is being threatened by the farmers. A New Zealand salmon farm has taken direct aim at the premium market and now pitches its “Ōra king salmon: as the “Wagyu beef of the seafood world.”
“Playing into the breed’s richness and clean taste is the pristine water it’s raised in. Ōra King eggs are hatched in the South Island’s Takaka Valley in Golden Bay, refreshed with water from Te Waikoropupu Springs, some of the clearest in the world…. (raised) in sea farm pens in Marlborough Sounds, where there’s a 98 percent ratio of water to fish. The roominess (some farms pack up to 50,000 fish in two acres of water) cuts down on waste, sea lice, parasites, and the need for chemicals and antibiotics that have given aquaculture a bad name – and its products – an inferior flavor,” Bloomberg reported in a news story that sounded more like a sales pitch.
Alaska salmon stories have, of course, sometimes been spun the same way.
“Salmon is most certainly not simply salmon, especially when it’s caught wild. As opposed to farm-raised species, typically imported from overseas and oftentimes unnaturally plump and flabby and in some studies lacking the same concentration of critical omega-3 fatty acids, the flesh of a wild fish is firm and muscular, with a cleaner taste that chefs covet,” Matt Rodbard wrote for Food Republic after the Alaska Seafood Marketing Institute (ASMI) took him on an Alaska junket.
On a small scale, some of this marketing hype matters. There are small wineries all over the world that survive on selling premium wines to select clientele, but bulk wines – many sold under private labels – now dominate the market because they taste good and are available at reasonable prices.
(Editor’s note: A California cabernet sauvignon – from a box of all things – sold under Costco’s Kirkland brand recently beat out a host of fancier, much higher priced wines to win a family taste test among a group of relatives, a few of whom are legitimate wine snobs.)
All of this is by way of saying that if Bluegrove succeeds in its effort to drive down the cost of producing farmed salmon, the falling price of those fish is going to push down the price paid Alaska fishermen for the state’s wild salmon.
And even if Bluegrove only helps farmers hold prices steady, inflation will over time drive down the real price paid Alaska fishermen. Those who’ve been around know how this works.
Alaska salmon prices peaked at $2.35 per pound for sockeye in 1988. Sockeye today still yeilds 65 or 70 percent of that price, but the actual loss is significanlty more.
The U.S. inflation calculator says that $2.35 from 1988 has the same spending and buying power as $5.12 today. Alaska salmon prices bottomed out in the 1990s, but have since crept up. The Alaska Department of Fish and Game reported an average, end-of-season, ex-vessel price of $1.54 per pound for Bristol Bay last year.
Prices were higher in some other parts of the state, but Bay sockeye account for almost 80 percent of the statewide harvest. At $1.54 a pound, it was worth less than a third of what it was worth 32 years ago. Meanwhile the cost of catching the fish – boats, fuel, nets, crew salaries – have only gone up.
It is easy to dismiss a new company like Bluegrove – not to mention any of the various on-land, bluehouse salmon farms popping up around the globe – as an artfully promoted startups destined to fail, but it is seldom wise to bet against tech.
It might start off with over-priced products that perform marginally. The early evolution might be slow, but the tech eventually reaches a point where innovations move to lightspeed.
It took the first phone a decade to reach the market. It was 37 years ago that Motorola released the DynaTAC 8000X, a heavy brick featuring 30 minutes of talk-time, six hours of standby, and the ability to store 30 phone numbers.
It cost $3995 – the equivalent of more than $10,000 in 2020 cash. Both the size and price of phones would soon start falling fast, but it took 13 years before the first smartphone – the Nokia Communicator 9000 – arrived on the scene in 1996.
Søvegjarto does not appear to be the Steve Jobs of salmon-farming tech, but he does have plenty of experience in the space. He was still a student at university when he founded a company called CageEye along with a fellow student and one of their professors.
The company developed a way to hydroacoustically monitor pens to determine exactly how much fish were eating. Sound waves were bounced of the fish to see if they were eating all of the food provided or whether some was filtering through the school. The amount of feed being given could then be adjusted to ensure that none was wasted or increased to make sure the fish got enough to eat and grow as fast as possible.
“What makes this so exciting is that you can condition the fish by making sure that it does not get any feed without it moving into the feeding area,” Søvegjarto told Apollon, his university’s research magazine. “We will not take over the management of the feeding, but we will cut out all human misjudgments and provide an objective tool to the fish farmers, so that they can find the perfect feeding. By being consistent in giving the fish food only when it responds, it is possible to optimize the dose.”
The magazine in 2017 reported that before Cageeye arrived on the scene, many Norwegian fish farms appeared to be significanlty overfeeding.
“Farmed fish are fed far too much,” it said. “Today, the excess feed ends up in the sea. It is not just a question of large financial losses. The unused feed contains a lot of nutrients, which pollute the water around and settle as sludge on the seabed.”
Reducing pollution makes Norwegian fish farmers look better, but the big benefits come in saving money on feed while maximizing the growth rate of the fish. Now comes Bluegrove, which swallowed CageEye and merged it with NorseAqua, a company in the business of developing and produces equipment for fish farming.
The new company is clearly thinking big and globally.
“Bluegrove’s technologies help shape the Internet of Species (IoS), which is a dramatic step up from the Internet of Things (IoT),” its media released proclaimed. “Whereas IoT is paving the way for a ‘fourth industrial revolution’ that is changing how products are made and distributed, IoS has the potential to spark a parallel ecological revolution in agriculture, aquaculture and forestry, where the needs of humans will merge with those of other species and nature more broadly.”
Some might argue the commercial fishing industry in Alaska today is where “the needs of humans…merge with those of others species and nature more broadly,” but the production capacity of salmon in the wild is limited by the amount of available habitat and the whims of nature.
Fish farmers are not so restricted. They are largely limited only by the supply of feed, and there are plenty of companies working on solving that problem from grasshopper growers to maggot harvesters to a company that wants to help fight global warming by turning carbon dioxide (CO2) into fish food.
“Novomeal, a nutritionally complete substitute for fishmeal, is made from the proteins of bacteria and other single-celled organisms, incubated in giant steel vessels akin to beer vats, called bioreactors,” Inc. reported in June. “Feed is the biggest cost of fish farming, a $232 billion global industry, and, given that the output of the world’s overexploited oceans continues to decline, it’s only getting more expensive. The supply of bacteria, on the other hand, is effectively infinite, as long as you have the nutrients to feed them.”
The company itself is billing its product as an environmentalist’s dream.
“The International Panel on Climate Change recently stated that humanity has until about 2030 to fight the first real battle against climate chaos,” the company website proclaims. “Billions of dollars will be invested in currently early stage technologies in this area in the next few years. At NovoNutrients, we’re building profitable technology to win that battle and the war. We confront unsustainable carbon emissions as well as a few other stark global resource challenges: the over-fishing of our oceans, and feeding a growing and ever more demanding population in the face of limited access to arable land, and other crucial requirements for traditional agriculture.
“NovoNutrients transforms waste industrial CO2 into food system ingredients, through industrial biotech, and biological innovation.”
In the world of salmon production, the jingle is increasingly starting to sound like “anything nature can do, man can do better.” If it works out that way, Alaska commercial fisheries could find themselves the biggest losers.