Scarcity shapes fishfeed alternatives search

The challenges and opportunities in a key market for an expanding global aquaculture market were examined by a panel of industry leaders at IntraFish 2019.

The search for alternative fishfeed ingredients has attracted private equity and strategic investors and will inevitably be shaped by resource scarcity, according to panelists at the IntraFish Seafood Investor Forum in New York.

Speakers on a panel devoted to feed discussed the development of alternatives to traditional ingredients such as fishmeal and fish oil including insects, algae and single-cell organisms.

IntraFish editor-in-chief Drew Cherry, the panel’s moderator, noted that both ADM and Cargill have made investments in fish feed and began the discussion by asking which of many alternatives currently being explored would likely play in the biggest role in the “move away from fishmeal.”

Petter Johannessen, director general of the Marine Ingredients Organization (IFFO) – an international trade body representing and promoting marine ingredients like fishmeal and fishoil – objected immediately.

Johannessen highlighted that 30-35 percent of fishmeal already comes from farm-raised and wild caught byproducts and suggested that rather than focusing on how to move away from fishmeal, the industry should instead focus on enhancing the influence of such “circular economy” approaches to marine ingredients.

“Our responsibility in this is really to see how we can develop an already perfectly-sustainable supply chain for marine ingredients for the feed sector and aquaculture,” said Johannessen.

Therese Log Bergjord, chief executive of Norwegian fishfeed provider Skretting, also stressed the need for sustainability in marine ingredients, adding that while her company has been investing in some alternative ingredients, there is a limit to how much such investment the company can pursue.

“The dilemma is here and now, versus the future,” said Bergjord. “I win or lose a feed contract with a tiny, tiny bit of margin, so we cannot afford to finance the cost of compiling the raw materials, we need to purchase it as a value chain.”

Though much of the discussion focused on alternative sources of protein for feed, Veramaris chief executive Karim Karmaly highlighted that the amount of omega 3 – a fatty acid that provides many of the health benefits consumers look to seafood for – in salmon has declined by 50 percent over the past decade.

“The decline of omega 3 alone speaks loudly,” Kurmaly said. “There’s simply not enough fishoil in the sea.”

In response, Karmly said, Verameris – a joint venture between Dutch materials company DSM and Evonik, a chemicals company headquartered in Germany – will open a facility capable of producing about 15 percent of global demand for omega 3 through fermentation of algal oil later this summer.

The importance of embracing changes in demand and educating consumers about sustainability issues also emerged as a theme in the panel’s discussions.

Kees Aarts, founder and chief executive of insect-derived fishfeed protein provider Protix, said the company has established partnerships with retailers in the Netherlands who carry a brand of eggs harvested from chickens raised on its feed.

Looking ahead, Aart said there will be opportunities as producers adjust to consumer tastes he described as “kaleidoscopic.”

“It’s far more important to think about where the margin is and how do you design flexible supply chains,” Aarts advised. “If we would design our system based on the confined price of soybean-concentrated fishmeal, we’re addressing a market where there is almost no margin to make anyway. That needle is actually shifting towards the more value-driven product, which is growing. It’s still not very big, but its growing based on consumers.”