Aquaculture

See all articles

Skretting CEO on feed alternatives: 'We cannot afford to finance the cost'

Feed producer balances need for profit against development of alternative raw materials.

The upcoming launch of new alternative fishmeal and fish oil projects underlines the dilemma facing feed companies as they try to balance profit margins against the need to seek feed options that alleviate pressure on wild fish raw material sources.

Take the case of feed giant Skretting.

At the IntraFish Seafood Investor Forum in New York in May, Skretting CEO Therese Log-Bergjord said her company has held extensive discussions with Netherlands-based insect meal producer Protix and with Veramaris, which produces omega-3 oil from algae, but all are in agreement that to make projects work will require buy-in from a wide range of players across the value chain.

"For the feed industry struggling with the demands of doing day-to-day business against the needs to ensure a sustainable future for raw material supply, the dilemma is the here and now versus the future,” said Skretting's Log-Bergjord.

“I win and lose a feed contract with a tiny, tiny bit of margin, so we cannot afford to finance the cost of applying the raw materials -- we need to approach it as a value chain.”

For this reason, feed producers say, the burden of risk for ensuring a sustainable future must be borne across the industry.

Amid forecasts the global population could swell to between 9-10 billion by mid-century, aquaculture is touted as one of the solutions. The United Nations Food & Agriculture Organization (FAO) forecasts global aquaculture production at 70 million metric tons. It expects production to grow by another 30 million tons by 2025.

Feed remains the aquaculture industry’s biggest cost, with pressure on key ingredients meaning it accounts for some 70 percent of business expenditures of aquaculture companies.

“I need to ask the farmers in this room to be willing to take it to their customers, and this is the circle we are hovering around right now, to balance the here and now, to provide the basis for business for this company and balancing it for the future,” Log-Bergjord added.

Veramaris, a joint venture between DSM and Evonik with two plants, one in the United States and another in Slovakia, is working on what it calls a "collaborative value-chain marketing" approach, sitting around the table with retailers in France, Germany and the United States to get them to understand the importance of feed sustainability and why they, in the end, may have to pay more for their products as costs are passed on along the chain.

“You have got to go with consumer information and real-time data with regards to their customer segmentation, and then you can move the needle,” Veramaris CEO Karim Kurmaly said.

The amount of omega-3 extracted from fish oil is about 200,000 metric tons annually across the aquaculture industry, calculates Kurmaly.

Kurmaly noted omega-3 levels in salmon have declined by 50 percent over the last 10 years, because there is not enough fish oil from fish available to be harvested, he said.

Veramaris has invested over $200 million in a new plant in Blair, Nebraska, which will make omega-3 oil from marine algae, relying on locally sourced sugar for its fermentation process.

“On July 10, we will turn on our taps to produce over 15 percent of the demand for EPA/DHA," Kurmaly said.

Protein potential is there

Kees Aarts, Protix founder and CEO, calculates that from all the world’s food systems, after all the unharvestables are taken out, there is an untapped potential of between 60 to 110 million tons of crude protein.

“We are going to unlock a new resource, which is the total amount of biomass that is produced but not eaten,” Aarts said.

This, he said, can be achieved by developing either new technologies or new species.

In a controlled environment, Protix provides insects food leftovers, the result of which is harvested and processed into an protein meal and lipid.

Protix says these are suitable proteins for food, feed and pet food. It is already selling 100,000 chicken eggs in the Netherlands from layer hens fed on insects.

“We are now moving into aquaculture. We are doing some testing, but from the protein gap perspective we are pushing the boundaries of combining this untapped resource, upcycling that back to a protein source,” Aarts said.

IntraFish Industry Report: Feed industry eyes byproducts as greater raw material source

Read more

Aside from raw materials being processed into fishmeal for use by the feed industry, fish oil and the omega-3 oil it contains are major selling points for consumers of salmon.

Earlier during the same panel discussion Peter Johannessen, director general of marine ingredients organisation IFFO, said the issues of fishmeal and fish oil tend to be misunderstood and misrepresented.

"It’s a perfectly sustainable raw material. It’s the most certified natural raw material available. I think it would be rather unsustainable to try to move away from that knowing that we need more sustainable raw materials," he said.

--

Learn more about the hunt for feed alternatives with the IntraFish Future of Feed report

--

Latest news
Most read