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Newfoundland Salmon: Brand of the future?

Consultants identify distinctive salmon brand as a way to penetrate global markets.

Canada’s provincial Newfoundland and Labrador government has published ambitious plans aimed at expanding the region’s aquaculture industry.

Aquaculture is among a shortlist of priority areas drawn up by consultants with the most potential for spurring economic growth in the province.

The plans published in an economic growth strategy report are the fruit of work carried out by consulting firm McKinsey & Company and are aimed at building on the government’s ‘The Way Forward’ plan released in 2016 .

The province is well placed to take advantage of global supply constraints holding back the sector’s expansion, the report said.

This could lead to the province’s salmon production being increased more than 5 times to above 100,000 metric tons.

All told, increased salmon production, combined with a substantially more integrated aquaculture supply and services network, could boost the provincial economy by around CAD600 million (€399 million/$449 million) and generate more than 7,000 additional jobs by 2030, consultants calculate.

Firing up production

One way to raise salmon production would be through the use of existing but inactive licensed aquaculture sites. Nearly half of Newfoundland and Labrador’s licensed aquaculture sites are inactive.

While the existing bay management system accounts partially for this lower utilization rate, the report calls for innovations in environmental management to open up a greater proportion of these sites.

A second option open to the industry could be for Newfoundland and Labrador to use suitable ocean conditions to license additional sites, opening new areas to prospective seafood producers.

Such a move would require continued cooperation with the Federal Department of Fisheries and Oceans, Environment and Climate Change Canada, and Transport Canada to ensure the approvals process for sites runs smoothly.

Authorities should build on investments by Grieg Seafood and Marine Harvest to underscore Newfoundland and Labrador’s attractiveness as a site for new aquaculture companies, the report recommends.

To do this authorities should be prepared to offer major companies incentives such as expedited licensing linked to the creation of new jobs, guaranteed production levels, and tax revenues.

Brand awareness

Perhaps the most interesting recommendation would be the development and production of a premium salmon associated with a distinctive brand.

Given global interest in salmon products and the perception of Canada as a high-quality and environmentally sustainable producer, consultants see an opportunity to position premium offerings at the high end of the market.

While Newfoundland and Labrador producers could achieve higher margins on top-tier salmon this could trickle down into positive ancillary branding effects for conventional products, they say.

The deployment of such a branding strategy could open opportunities for local processors, allowing Newfoundland and Labrador to market its salmon as “hand selected” or “homegrown,” for example.

To achieve that, opportunities exist to partner with seafood processing businesses with experience in processing value-added products and marketing internationally, the report said.

Tried and tested

Bakkafrost, which produces salmon in the Faroe Islands, is cited in the report as one example of this strategy, marketing Bakkafrost Salmon as being “fed a wholesome diet that we carefully harvest from their natural environment surrounding the Faroe Islands."

Although Bakkafrost uses similar production techniques to those of its competitors the company’s focus on quality and “purity” enables it to command higher market prices than fish sourced elsewhere, consultants highlight.

Adopting a similar strategy Marine Harvest markets select British Columbia salmon under the “Sterling” brand, emphasizing the purity of the natural environment and the expertise of dedicated fish inspectors.

For this type of marketing strategy the Province could target the CAD400 million (€266 million/$299 million) federal-provincial Atlantic Fisheries Fund for some measure of complementary financial backing.

To support their claims for the development of the local industry, the report authors cite Marine Harvest CEO, Alf-Helge Aarskog when he said: “Newfoundland has potential. It’s a huge area, and if we do the farming right, it can grow in the future.”

Recent changes to the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union, offer new opportunities for the province’s fishery exports.

Under the new agreement, 96 percent of EU tariff lines for fish and seafood are duty free. After seven years, 100 percent will be free of all duties.

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