Major retail, salmon farm partners lined up for algal oil producer Veramaris

[UK] When UK retail giant Tesco announced it would be adopting algal-fed salmon as part of its new salmon standards last month, more than a few heads were turned.

For Veramaris CEO Karim Kurmaly, the decision signals a sea change in retailer thinking, and he told Undercurrent News at the AquaNor 2019 event that he hoped it would be the first of many such policies from global retailers.

“I think Tesco have understood that salmon is a vital category for them, and they’ve taken steps to ensure it continues to be sustainable,” Kurmaly said. “So I would say it’s remarkable, courageous and the right thing to do.”

“What we see now is that Tesco has created a momentum that other retailers will find it difficult to ignore.”

Indeed, Veramaris, the Netherlands-based joint venture of Royal DSM and Evonik Industries, reportedly has similar arrangements planned with two unnamed major retailers in the EU, as well as plans in the US and Japan — although it should be noted that none of these algal oil sourcing policies would ask specifically for Veramaris feed.

According to Kurmaly, discussions with the Japanese retailer began during the week of AquaNor, while first negotiations with a pair of interested US retail chains are also set to take place in early September.

“The supply chain of salmon is not as simple as, say, the chicken industry. It’s quite complicated. So you need the farmer, the feed miller, the processor, the distributor, and the retailer to work in collaboration. That’s basically what we’re doing now, and we hope there will be more news coming out soon,” Kurmaly told Undercurrent.

“Tesco has put a stake in the sand, so to speak, and it has not gone unnoticed.”

Growing attention from the top of the industry

Over the past year, Veramaris has industrially produced an omega-3 rich fish oil alternative derived from the algal strain Schizochytrium. The company’s key selling point, which it claims distinguishes it from the competition, is that it is the only firm to offer algal oil containing both eicosapentaenoic acid (EPA), and docosahexaenoic acid (DHA) in a highly concentrated form.

Speaking to Undercurrent in July after the opening of its commercial-sized feed plant in Blair, Nebraska, Kurmaly claimed the company could satisfy 15% of the salmon industry’s total demand for the two fatty acids.

Earlier this year, Norwegian salmon farmer Lingalaks went public in its use of Veramaris’ alternative algal oil within its salmon feed. Algae-fed Lingalaks salmon has since been sold in stores belonging to German retailer Kaufland, and French supermarket chain Supermarche Match.

Now, Kurmaly says the company has been supplying algal feed to “a major Norwegian salmon farmer” although the farmer has yet to go public yet.

“Lingalaks was one of our clients that was happy to go public. Other farmers are still looking at our marketing plans to take their product or their brand public,” the Veramaris CEO told Undercurrent. “So that’s still in the works — but are they already selling algal oil-fed salmon? Yes.”

According to Kurmaly, the decision on when a farmer is willing to go public with its adoption of alternative feed ingredients is down to a question of scale.

“When you are producing 10,000 to 15,000 [metric] tons of salmon from a few sites, it’s much less complex. But when you’re delivering to several retailers three times a week and you’re talking about tens of thousands of tons, you have to make sure — particularly when you say publicly you’re going to do this — that your supply and your logistics chain can meet the retailer’s expectations.”

Kurmaly added his firm, which was only founded in January 2018, has also been supplying algal oil to a key Chilean farmer, although it too is not yet willing to go public.

The Dutch feed venture, which operates a small-scale plant in Slovakia and two in the US, is also in talks to sell algal feed to a land-based recirculating aquaculture system (RAS) salmon farmer, Kurmaly said.

“We are discussing with one RAS fish farmer at the moment, with a second to follow, although this more of an introduction.”

In the increasingly competitive RAS market, Kurmaly hopes the use of algal oil feed will be taken by land-based farmers as a means to set their fish apart with consumers.

“One particular RAS company not only wants to talk about production sustainability in terms of environmental impact, etc, but they also want to both enhance their nutritional impact and reduce the amount of fish oil in their feed. So we are collaborating with them,” he told Undercurrent at the AquaNor show.

Shrimp entry more complex

Although Veramaris’ algal oil could potentially be used for all manner of farmed species, Kurmaly was clear that the firm’s focus in the immediate future was on growing its client base within typical European farmed fish species.

“We are working with marine fish because the marine fish is usually exported to Europe, where we already have a very good tie-in with retailers,” the Veramaris CEO said. “So now we’re trying to connect those retailers to those farmers to ensure that this new technology passes up that value chain.”

However, the world of shrimp remains a more challenging prospect for the venture, not least because, for the farmers of the Asia-Pacific region, a small price premium over traditional fish oils makes a huge difference to the bottom line.

According to Kurmaly, the company is currently going through the process of clearing registration requirements in several Asian countries, after which it intends to enter and investigate the shrimp supply chain.

Julia Born, global communications manager for Veramaris, said she hopes the company can succeed where others have struggled by offering shrimp farmers a financial incentive to use algal feed.

“Our value proposition is that we are not only a feed ingredient supplier, we also work with companies continuously to create their story, create their media, and help capture value,” Born told Undercurrent. “If feed makers cannot improve value, if they’ve not differentiated their shrimp feed for the market, then the farmer just sees a cost.”

“If a farmer’s not informed of the value that algal oil can add to their business, or how they can sell the sustainability story and the health benefits to improve profits, then I can understand that there’s no call for it,” Kurmaly agreed.

“So we will engage with the shrimp industry and look at what we can do — but for the moment the primary focus is salmon, pet food and marine fish like sea bass and sea bream.”


View original article at: Major retail, salmon farm partners lined up for algal oil producer Veramaris

Contact Algae World News for algae industry advertising and other opinions: [email protected] 





Leave a Reply