Investing in Regenerative Agriculture and Food
Investing in Regenerative Agriculture and Food
316 Alf Gøran Knutsen – The good, bad and opportunities of the multi million dollar salmon industry, from shooting lasers under water to feed
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Salmon. There isn't a more contagious topic within aquaculture than salmon farming, the biggest success story in aquaculture, at least in the global north, but also full of huge challenges Pollution picture, salmon feces floating out of a pen, sea lice and all the chemical solutions used to combat this parasite. Feed from using wild fish which we could eat, like anchovies from Chile, and soy from questionable sources in the ex or the former Amazon. But there are also a lot of opportunities to grow a potentially very sustainable source of protein and a source of omega-3 for many people in a way that makes sense. Today we explore the fascinating world of salmon, mostly open pen in the ocean in Norway, but also hybrid flow-through models. We discuss biology and technology, feed and the crazy developments in this very young mind you, only 50 years old industry, and we also discuss AI and how lasers are shooting down sea lice from salmons underwater. Seriously, take a deep breath and another one. Every second breath we take comes from the oceans and over half of the fish we eat is farmed. That's why we dedicate a series to explore the potential of regeneration. Underwater Oceans and other water bodies cover most of our planet and have stored most of the excess heat so far, and, at the same time, stored most of the excess heat so far and, at the same time, have some of the best opportunities to produce healthy food, mostly protein, store carbon, create materials, fuel, biosimulants and much, much more. Plus, create a lot of jobs in coastal communities.
Speaker 1:We have largely ignored the water-based farming aquaculture industry in this podcast until now. In these conversations we explore why aquaculture is so important for the future of our planet. If we get this wrong, we have a serious problem. What are the risks and challenges with feed? The reliance on soy pests yes, there are pests, underwater antibiotics, microplastics, etc. What does it mean when you apply regenerative principles to aquaculture? What can soil-based agriculture learn from aquaculture and vice versa? And what should investors really know about water-based farming and what the potential is of regenerative aquaculture?
Speaker 1:A series of interviews with the people putting money to work, entrepreneurs and investors in this crucial and often overlooked sector. We're grateful for the support of the Nest family office in order to make this series. The Nest is a family office dedicated to building a more resilient food system through supporting natural solutions and innovative technologies that change the way we produce food. You can find out more on thenestfocom or in the links below. Welcome to another episode Today with the CEO of Quarry, the leader in the world of sustainable salmon farming. Welcome, alf Guren, thank you. Thank you very much, and we always start with a personal question, usually around soil, but obviously, in this case, around salmon. How did you come to spend most of your awake hours, most of your time, thinking about sustainable farming, sustainable salmon farming? How did that let's say, even within salmon farming, they're more easier jobs to do within agriculture, for sure, and within the larger world of food as well like? How did your path lead you, led you, to this specific spot in time?
Speaker 2:yeah, that's a that's a long story. I was, I was. I have time to try to keep it as short as possible. It's uh, I was not in. It was not intended to uh end up being a salmon farmer. I come from a fisherman's family. Actually, my father and his father again were fishermen, and I went to school and tried to educate or tried I did educate as a teacher, and that's where I met my current wife and she's one of the reasons why I spend all my time in salmon farming because she grew up on the island of Kauri. She is the third generation of the farm and when we hooked up at teacher school, I ended up meeting her father, and her father saw something in me, or at least some kind of potential that that he felt, yeah, he could hire. So I think it was the third time I met him. He asked me if what my plans were when I was finished studying and I said that's always a dangerous question in like the like in an early, say, family law meeting.
Speaker 2:Yeah, it's very dangerous. But then again, I guess I asked some correct questions, because I think one of the first things he did when I visited her family was show me the farm and what they were doing and why they were doing it and I've never been to an salmon farm before that moment and and had a lot of probably stupid questions. This, this was 20 years ago so but yeah, he wanted me to start working in the company and and when I was finished, I did that and I did go all the from stacking boxes in the harvest station to feeding the fish, to cleaning the nets, to, yeah, I've done everything in the company and I've been part of it for 20 years now, building it up to where we are today. When I came in, it was an industry that we didn't have as many problems as we have now. But you have to remember it's a young industry. It's a little bit over 50 years old. Our company has been doing this since 1976. So soon to be 50 is of 48 years. I've been CEO for 18 of those 48 years.
Speaker 2:When I came in, the operation was a lot smaller. We had less pens, less fish and much easier. I could be a CEO and farm also at the same time, a CEO and farm also at the same time. I didn't need to spend the whole day in an office like I normally do now, but, yeah, so I could participate in the biology and the feeding of the fish and learn a lot from my father-in-law and, luckily for me, he didn't leave the company for me and then left the island.
Speaker 2:He left the company for me and then he's still on the island, so he's still someone I can ask when I need to learn more about what we're doing, because I think I'm still, even after 18 years. I'm still learning new things every day, and that's what makes it so interesting. It's a young industry with a lot to learn and a lot of potential, and I believe that it that's why I wake up at 5 o'clock every morning and go to work. It's because I feel that this can be done in a good way and left for the next generation also. But we're not quite there we have. The bigger the industry gets, the more challenges not problems, but challenges that we need to overcome.
Speaker 1:And take us to when you joined. You said it was a lot smaller and less pens, like what was the salmon? Industry than back then, because when you joined it was I mean, now it's a young industry, but back then it was way younger. Like how should we imagine?
Speaker 2:The technology and everything was completely different. You have to remember we were at that point we were seven people working in the company and there was only one guy that was in an office. We had a site manager but he was out there feeding the fish and we took the feed and drove it out to the farm and manually put it onto the feeding stations that we were manually controlling and we were visually feeding based on the activity of the fish on the surface and at that time we did a hell of a lot better job making sure the fish got enough feed and not too much. Those things were managed quite good in that back in those days the feed fcr ratio we had then was was impressive for for feeding that way.
Speaker 1:Um, so just just fcr is feed conversion ratio is how much feed has to go in how many kilos. Um, you might have seen the infographics on why fish farming is in many cases more interesting than other protein sources because of the lower FCR. But within so, of course, fish farming there's a constant competition like what's the best ratio input, output which I think is actually very healthy, because in many other industries, and especially agriculture, we don't do that very much like how much kilo goes in for the kilo that comes out, and so the FCR was actually really good. You're saying.
Speaker 2:Yeah, it was really good and we have fed fish under one-to-one visually and that was quite impressive. But then again, when I started we had those farmers that have been part of this since the beginning. Some of the employees then were in their late 50s and they had been part of the company since the beginning of the company they knew, so they had the fish for 30 years and had a lot of experience. So it was impressive to learn from them also the way they did it. Now I'm the one that has the longest time in the company because all of the old timers they are gone and it's a different job and you're in an office, because, fast forward now.
Speaker 1:Like what? Yeah, take us to, uh, to to your farm and and depends, like what? What should we see or imagine when we see your salmon operation?
Speaker 2:what you, what you saw back in the days, were smaller. The pens were only 60 meters in diameter. Uh, they were. Every pen had a machine connected to it, a feeding machine connected to it. The dimensions were a lot smaller. Now it's double the size. The pens have a diameter of 120 meters. The pens doesn't have any feeding machine connected to it. You have a feed barge that's connected to every pen through a pipeline that goes out from the feed barge. So instead of having two tons of feed stored on each pen, you now have 450 tons stored on a feed barge connected to the pens. All the technology, everything involved in just feeding the fish, is completely different. You have more things connected inside the pen, with the camera systems, with the laser systems, all the data that's transferred back to the operation central that we have that is controlling it. Now, a farmer what we call it back when I started. They're not farmers anymore, they're operators of the equipment.
Speaker 1:They don't feed the fish, they make sure that the equipment on the farm works and the fish is good equipment on the farm works and the fish is is good, and did you lose something there with that connection to the fish and the sea? And I mean we, we have a similar thing, I think, in if, if that's yes, let's, let's wait. But we have a similar thing in agriculture where you could theoretically, as a farmer, um be in the tractor, and even some of them are now remote controlled and operate thousands of hectares without ever touching the soil, like you park your your tractor in in the shed and actually never really touch and feel, see your plants. You see your plants from above and through pictures of drones and things. I'm exaggerating a bit, but yeah, in in farming, I think, when one of the big issues, we lost observational capacity and and is that a a a thing in aquaculture as well?
Speaker 2:I've played farming simulator.
Speaker 2:I know it's possible.
Speaker 2:No, it's one of my important things when we did that, when we did the transfer from feeding on the pen and going to feeding on the barge with the camera system, my my whole goal then was to keep the same amount of people on the pens.
Speaker 2:Don't reduce any numbers there, because the, like you said, with farming, the connection with the fish and the sea and all the things you can just learn by looking at the surface of a pen, doing that out there and not on a camera is two different things. So we actually kept some of the old-time farmers that were good at doing that on the farm and hired new people to sit inside and do the feeding of the fish. And of course, this is going to happen more and more in salmon farming also. We will have more and more AI and technology that actually, in the end and I think China now did the first one you can actually remote operate a salmon farm completely Feed. Everything can be done with AI and done remotely, so you don't have to have any people on the farm actually. But that's a future I don't quite not sustainable, I believe, yet at least.
Speaker 1:And what is your biggest issue with that? What do you see as the biggest challenge with, let's say, that path?
Speaker 2:It's biology it is. You can learn a machine so and so much, but the biology is a bit difficult for a machine to learn. The machine can learn to take decisions based on certain things, but those who have the fingertip feeling of fish welfare or how fish is, that's not possible to learn to a machine. And as long as we are doing farming, or close to land, at least the open net farming that we have, are still in not remote spaces there. Everyone is around the island. I can actually see them all my farms from my office window, believe it or not, but I think it's important to have people still, and even though the technology will come and soon are there. I think Quarry will always have people managing the farms out there instead of going fully automatic and what has been the driver?
Speaker 1:I can imagine, but I still would like to go the almost extreme mechanization route. Like technology route. It's been price pressure, commoditization Because, compared to before, what has been the driver? You think for this young industry to scale up really fast Because if you look at the numbers it's striking in 50 years, 5-0, what has happened and what continues seems to be happening. What has been driving that extreme mechanization?
Speaker 2:No, I think it is a combination of a lot of things. I think it is a combination of a lot of things. We are farming more and more remote. The ultimate sites for farming are now further away from populated areas, as it is in other countries also. But in Norway we see now that the west, where we started farming, or midwest of Norway, where conditions were very good at that moment, we see now that the west, where we started farming, or west, midwest of Norway, where conditions were very good at that moment, have now shifted and it's more north and farms are better than the further north you come because of temperature and climate changes and all of those risks that you have.
Speaker 1:How does that put you? Because you're based on an island and you're not moving. The island isn't moving, so how does that put you in the future?
Speaker 2:No, I think we will be here. We're located north, we're on the Arctic Circle. I don't think the temperature of water will change. It has to change a lot before this will be a bad spot for farming. What might happen here is, of course, a little bit more. You would have farms that will be a bit more exposed, but that can be solved with bigger boats and more safe equipment. I think other farmers and especially the bigger companies there are two things the fact that they're more remote, the fact that it's more difficult to get people when it's more remote, and the fact that they're always measured on cost, and right now, big companies like Movie, they have one of their biggest costs uh, that has increased over the years is the, the pay, the, the amount of people involved in this farming. Like I said, we were seven people when I started farming, and we were. We were farming half I have to think about, no, one third of the volume we are farming now, and now we're almost 40 people.
Speaker 1:That's that's interesting. You would be 20, maybe one or two extra, but not a double.
Speaker 2:Basically, you became per person less efficient yeah, absolutely, and the bigger you are, you thought you should be more efficient per per person, but it but it hasn't worked that way. We we are underlying the same.
Speaker 1:So all the technology and all the push for mechanization you're laughing, but I'm just shocked that actually doubled your, which is great for the island because you're probably a big employee there.
Speaker 2:And that's potentially your goal, or one of the goals too the social sustainability.
Speaker 1:But it's an interesting narrative that we've been telling ourselves that, by definition, mechanization, technology and and scale economies of scale lead to less or lead to more efficient. And you're saying, actually, in our case not really no, absolutely not, and I think it is.
Speaker 2:Uh, it is a combination of many things. Again, it's because the government requires us to do certain things. Important thing is to be out on the farm. We should have all the people work on the farm and that's why when I was started as a CEO, I spent half the day outside and half the day inside. And I remember when I hired my first secretary because there was a lot of work I needed to do on reporting on biomass and lice and all of those things on a monthly and weekly basis so I hired a secretary and I told my father-in-law and he was like okay, what are you going to do then if you hire a secretary? Are you going to not work anymore? Is that the plan? And we ended up.
Speaker 2:Now, I think out of the 40, we are, 20 of the people are on land and 20 of the people are on the sea. We're at a crossing point now where there's actually more people on land than on sea and that's not a development my father-in-law would have liked. He's withdrawn from the company because he felt he couldn't keep updated. So he's sold his share to the next generation and stepped out of the board, which I understand it because the development have been insane. To keep track of that, you almost have to work in the industry to to understand and to to be able to keep track. Um, so it it hasn't become any more efficient, but but you also have to realize that we have. The more we have grown this industry, the more challenges we have and the more technology we need to put on it to be able to do it in a sustainable way.
Speaker 1:So what are those challenges now that just didn't exist 20 or 18 or 20 years ago? When you started what, what did you say what? What were the challenges? What are the that ones that let's say they're always? There were always challenges also 20 years ago. When you started what, what did you say? What? What were the challenges? What are the that ones that let's say they're always?
Speaker 2:there were always challenges also 20 years ago, but yeah, when we started we we had not when I started we didn't the challenge we had that we needed to change the way we were producing or change the feed, change those things. Now we have, because of the industry, the growth of the industry. We have, because of the industry, the growth of the industry. We have challenges with lice because the government started taking that down, the parasites.
Speaker 2:So we have a much lower number. Now we can have of that before we need to do anything with the fish Because of the lice. We then have fish welfare problems. We have fish disease problems because the stock of fish is too big in some areas.
Speaker 1:For anybody that doesn't know what sea lice are, can you give us a one-on-one, a short intro into the challenges of sea lice Sea?
Speaker 2:lice is a natural parasite that lives on wild Atlantic salmon that travels the waters. So it is a parasite that has a very short span between each generation. It has 14 days before it regenerates from an egg to an egg. So it goes from an egg that's floating in the water that will only attach to Atlantic or to salmonite fish. So when it hatches, grow from being a small larvae to being a big mature sea lice in only 14 days and then spawn again and perform the new generation. So for every lice that spawn and that gets a host it increases. So every lice lays like a couple of thousand eggs also.
Speaker 2:It's an exponential problem and that has become a bigger and bigger problem in industry because it affects the wild salmon. Back again, it came from the wild salmon but now the farm salmon is so dense populated in certain areas that it's affecting the wild salmon when it comes in to go up the rivers. So when the wild salmon goes up the river it kills the lice because it doesn't take fresh water. So that's not one of the reasons why the salmon go up the river, but it's one of the good things when a salmon go up the river and the farmed salmon cannot go up the rivers of course it never goes into fresh water.
Speaker 1:wow, I didn't know that piece of. Okay, so it's actually a pest or an insect which in, let's say, to bring it to the farming, the, the land farming, soil farming, you would use it in an insecticide in the conventional world. What? What are farmers in general? And then we talk about you using against sea lice, or how do you weaponize yourself? Or how do you? How do you?
Speaker 2:there's been a because the lice has such a low or a short span between each generation, it evolves also faster. So there's been a lot of things we've used and a lot of different medicines and chemicals that have been. We started using one thing, then we overused it so the lice could develop resistance against it. Then we had another thing, then we had another thing and now we don't use a lot of chemicals. Treatment that goes into the feed, that makes the lice die because the salmon pours out a certain chemical. But most of the farmers use a combination of different mechanical treatments, treatments, fresh water. We actually use fresh water as one solution. Hot water, hot seawater. You warm the water up and that's a bit of a controversial solution. You heat the water up to between 28 and 34 degrees. The salmon can take that temperature. Now, the salmon can take that temperature, but the salmon lice can take that temperature in. Let's take that temperature, but the salmon lice can't take that temperature in. Let's say, for example, 30 seconds. It will die.
Speaker 1:So you take the salmon out of the pen through something, or how do you do that?
Speaker 2:It's like a well of warm water that you just push the salmon through and then back again into the pen. Wow, so that's amazing. And then you have jacuzzi for the pen.
Speaker 1:Wow, so that's amazing. And then you have Yakutsi for the salmon.
Speaker 2:Yeah, Then you have underwater pressure washer that will actually rinse the fish, the lice off the fish, with just high pressure water underwater, and that works. And then you have something almost similar to a car wash called skamic that, where there are brushes that will brush the fish as it goes through. And the two more, the two methods that we have been using for the last couple of years, or the last since 2009 actually, is the lump fish, a local fish that has a quality that he eats. He lives on sea lice, so he eats the sea lice of the back of the salmon. And then you have the new invention, a new technology the lasers that shoots the lice of the fish.
Speaker 1:I remember when I was at aquaspark 12 years ago, there was an idea somewhere and it just sounded like star wars, um, but of course somebody figured out how to do it. If it's a big enough problem, we'll find a solution, so go back to the fishes. So you're farming the, the natural predator as well, or how do you make sure the natural predator, let's say, is abundant enough and and hanging around your pens and in your pens to eat these sea lice?
Speaker 2:if you think about the lumpfish. Yeah, um, yeah, the. What we did with the lumpfish because that was was actually something we learned from the one of the first farmers, my father-in-law and his father. They said said that when they were putting out the pens then they were much more. It wasn't that deep and they put it out in places where we don't farm anymore. But then they had wild lumpfish swim into the nets when they were like babies and they grew up with the salmon and they saw that they were eating the life. So they kind of said you should try farming the lumpfish. So we actually did that. We caught wild lumpfish, took it on land based facilities, breeded it and made lumpfish, ranched lumpfish on land, then put that out in the pens when they were like 15, 20 grams and they immediately started cleaning the salmon. That was from 2009 to 2019. That was a very good solution.
Speaker 2:On parasite control, but then again we started to have a problem with the fish health of the lumpfish and we didn't find any vaccines or anything that could help on that problem. Of course it was the problem of communicating that it was a tool to fight a parasite. That was a problem. Everyone just saw that you. You grew a lump fish, you put it out to the pen and then you killed it with no use. So it wasn't uh, it was a bit frowned upon at times, and we decided to. We decided to look at other solutions, and then came the lasers.
Speaker 1:So how do the lasers work? Because this sounds yeah. Okay, walk us through the laser case.
Speaker 2:I have to go back to the beginning. First of all, it's a technology that is based out of the technology that the US Army uses for when they are doing jungle combat. They have a laser that shoots the malaria mosquitoes, so the soldiers isn't infected with malaria. They took that technology, turned it upside down and put it underwater, and it's a Norwegian company called Stingray and it's all about machine learning, of course. So the first time they came to us and presented the idea, it was like you said. It sounded like a really cool Star Wars thing and you know my brothers-in-law that were the one that runs the company they fell in love with the system. But then again it only shot 300 shots in a day. So it was like, should we pay this much for something that will only shoot 300 shots a day? One lump sucker would eat 300 lice a day actually, and that cost 10 knock and a laser cost 1.5 million knock. So it was like, nah, not quite yet Not yet.
Speaker 2:Come back when you have come a bit further on developing that system and in 2019, when we started using it as a pilot on our first site, they were shooting like 20,000, 30,000 shots a day. So the machine learning has the data behind it had started picking up. So we did a pilot on one of our sites and we immediately saw an effect on using it, so we decided to go all in in 2020. And now we have 82 lasers, two in each pen at any given time. Uh, maybe more, and now they are. They're shooting more than 150 000 shots per laser per day. So in a good week, we could have over 40 million laser pulses, uh, on our farms and does it affect the salmon?
Speaker 1:I mean, it recognizes I'm imagining it recognizes the insect or in this case, the parasite it wants to shoot. It recognizes that on the skin of the salmon and shoots it off. Does it stress the animals?
Speaker 2:It's very difficult for people to understand that it doesn't hurt the animal, and I understand it, because it's very difficult for people to understand that it doesn't hurt the animal, and I understand it because it's a laser beam, but it's setting on it, on the laser beam, and it doesn't shoot unless it's 100 sure that it's it's a lice and when it shoots it shoots for the a certain amount of time and that time has been set to the size of the lice and the thickness and everything. It scans everything. The camera system is amazing and it shoots just enough to just kill the lice. And you can see the fish, because we get a shot, video on each shot and you can see the fish swimming slowly past the camera being shot. It doesn't notice anything, it just keeps, keeps on swimming, has calmness over it and it doesn't react at all. When it reacts, it reacts because it sees the light or something. It doesn't, doesn't react to the actual shot. It's the, it's the light in the pen that sometimes scares the salmon.
Speaker 2:It is insane when you know how many salmon we have in a farm that's swimming past the cameras for the camera to be able to scan the fish and find those two millimeters of parasites and shoot it. In that time it's something I did. If you asked me 10 years ago, I would say that that's never going to happen and I still have struggling to believe that it's actually happening what is your father-in-law's like?
Speaker 1:the laser show in his old pens?
Speaker 2:yeah, he's, uh, he's, uh, he. Actually, when whenever he has someone visiting, he's come, he comes down here to get a tour of the facility just to to hear us tell the story about the lasers and how they work. And because you have the operational central, you can just walk in there and they will show you a picture. They will will show you a live video feed of the lasers shooting and shot videos and all of those things. So they are, he's. Yeah, you can imagine being part of this industry from the beginning and seeing where it is now. It has to be, has to be.
Speaker 1:Yeah blow your mind. It says something about machine learning and imagery recognition, which is not easy underwater in different circumstances, and then being able to shoot a laser on target without hitting the, the host. Let's say it's just fascinating does it bother you? No, sorry, go ahead.
Speaker 2:I have a question, but go ahead no, it's most most people have seen, even though we have clean waters in the north of Norway, most people have seen how the water can change and how it can be very call it dirty or shady at some point because of algaes and all of these stuff. And in a salmon pen you have salmon with feces and you have feed and you have a lot of factors that disturbs the picture. So so, but it's, it's amazing how machine learning with the whole, if it is unsure, if it's not completely, uh, certain, it will send us the pictures. We can go in, we can go in and verify the picture and as long as it's a, it's a no-go or a go, it's. There's never a like uncertainty, there's a. There's only two options for the lasers it's shoot or don't shoot at all. And and that's what, what makes machine learning work on that stage of a fish feeding or fish production, salmon production it's the fact that you have a selection between no and yes and not a lot of various factors that it has to take in.
Speaker 2:And the camera imaging is, of course, developing all the time. Imaging is, of course, developing all the time. The first lasers that we had, the 2009 lasers the hardware on those still works. They're still good, but the difference between 2009 laser and a 2024 laser, camera-wise, is just insane. So you will have to upgrade the hardware on those lasers as we go, because the technology are constantly improving a lot and machine learning, of course, also improves but that you can just upgrade the software. The hardware is where you have the most problems and, as I said, we will be able to use them for a long time right now, but you, you everyone wants the latest version of something when it works, especially, yeah, and does it nothing bother you, but we started with biology as well, that, let's say the biology approach.
Speaker 1:In this case, the natural predator worked for quite a while, but then it didn't anymore, and and now you're on a full let's say full-scale technology solution. Um, is that not saying a defeat almost, but like something that you had had to go to a technology solution instead of a biology solution yeah, it bothers me just a little bit.
Speaker 2:You want to. The easiest way to to grow a fish or any animal is, of course, as natural as possible, with the natural habitats and all of those things. But but but then again it's um technology. Yeah, we, we will never be able to grow this industry if we're going to do it as natural as possible. You need technology, you need some kind of new inventions to how you farm. That's been also, that's been my perspective on perspective on the farming all the time, and that's why we have, or we are where we are, because I've been adaptable and we've been willing to test new technology we have. We have said yes to a lot of things. We're struggling now because we have said yes to a lot of things. So everyone comes to us first with technologies, but we're getting slowly better to saying no because the graveyard I mean of technologies that didn't work must be in Dermas as well yeah, it's quite.
Speaker 2:There's some, yeah, but it is. I don't regret saying yes to any of them, because they are part of getting to where we are now. Actually, it is everything has been crucial to get to learn more about salmon farming and to get to the point where we are now, and I still believe we are learning. We are now and I still believe we are learning. I still believe we are we're doing too much experience-based farming and not enough data-driven. Uh farming.
Speaker 1:What do you mean by that? Because you also started with we need, we had more people on, let's say, on the sea, on the farm, and we we have less. Now, what do you mean when you say what data are you missing? What data would you love to have that you don't have now?
Speaker 2:right now we don't. We don't understand all the the effects on, all the effects in the ocean, on the salmon farm. We we are not able to connect the dots when it comes to diseases and and why we have fish welfare problems, currents, salinity, oxygen, ph. All of those things need to be connected in a way so we could learn from incidents or or other things that happens with the fish that we can't explain. We have. We have too many unexplainable or that we can't explain. We have too many unexplainable or we can't explain some of the incidents that happens in the farm because we don't have enough data.
Speaker 1:Do you think that AI could help with that, and big data?
Speaker 2:Yeah, absolutely, ai is one of the solutions on that, on that problem, and that's why we're working with several people now with AI on data and big data and trying to connect the dots between everything.
Speaker 1:And what about the land-based or fully closed RAS systems? Like you're farming in the sea. If you would be able to're farming in the sea, if you would be able to control everything on the land, would that be better, worse? Or if we don't understand all the different variables well enough, is that also a tricky one to?
Speaker 2:dive into. Yeah, it's an interesting question, but we were the first open net farm that invested in a land-based farm. So we actually have a land-based project that we're working on, and the reason why I'm doing it is because I believe there is. What we're doing on sea now is it hasn't reached a maximum point, but we're getting close to a maximum point. So we need to find other ways of growing this industry, and open net farming has come to a point where it's big enough. Land-based farms are one solution. I struggle a little bit with the RAS system because it's more chemistry than biology, meaning that the water quality is.
Speaker 1:What does RAS stand for? I mentioned it, but I forgot.
Speaker 2:It stands for Recirculating, I think Recirculated aquaculture system. Yeah, it's reused water, so 99% of the water is kind of reused. You only need a host like this to produce salmon on land because you're reusing the water so much. The system we are planning to put on land is a flow through system where we actually pump up the water we need, we actually reuse, but we reuse only 50% of the water. So we have to pump a lot of water and that's not good. But in the north of Norway power and sustainable power sources are available and we're also going to produce a lot of power ourselves with the land-based system that we're putting out there. But I believe that the combination of land-based closed nets or closed at sea, and open nets and offshore is part of the future of salmon farming, especially in Norway. You know we have the water, we have the water quality, we have the water temperature. We need to exploit some of those things in producing more salmon.
Speaker 1:And what are the limitations? Now on, like the open pens You're saying closed pens doesn't mean closed, floating in the water. How should I imagine a closed pen? It's not a net.
Speaker 2:Yeah, you should imagine it's like you said it's as a closed pen or a closed tank floating in water like a pen underwater with just plastic, or most of them are made of plastic then. But yeah, around, uh, totally 100. Closed, so you don't have any. You don't have, so you don't have any escapes, you don't have a parasite infection or anything. You can. No sea lice. Yeah, no sea lice, because the closed pens on the sea they will get the water from underneath and pump it up into the pen, because the parasite, the lice, doesn't go under 9 meters because of pressure, the eggs and everything doesn't go under nine meters. It floats in the surface of the water. That's also why the land-based farms will get their water from 80 meters or 25 meters or yeah, similar.
Speaker 1:And then what happens with the, the waterfall of feces, etc. Is that or what happens now with closed pens? It's just, is it pumped outside? Is it filtered at all? What happens with, uh, the, the out?
Speaker 2:it's filtered as uh it is and um and um it's um. It's what we do. We filter it 90%. You take out all the feces from the water that you then put back into the sea. So it's all about trying to clean the water that you put out. You put out, so it's yeah, it's system. Then you utilize the feces that you you understand the feces from the fish has. The technology behind feed is so insane that the nutritions are still in a feces that comes from the salmon. It's like the cow. Of course, you can reuse that into biofuel or even fertilizer for the agriculture or other things. One of the things you get by producing salmon or from the feces of the salmon is phosphorus, which is a scarce raw material in the world. So that has a huge potential in utilizing the feces from the salmon. But it's going to be a lot of feces. That's the problem.
Speaker 1:We produce 8,000, or the land-based farm that we're going to do is 8,000 tons of salmon and that means that you will have almost 8,000 tons of feces that you need to utilize in some way, I think is, next to the parasites, et cetera, the big lever of change and the big challenge in fish farming in general unsustainable sources of feed, or FCR ratio, which we already feed, conversion, which we discussed before A lot of it, I think, especially the beginning. Now it changed. A lot of aquaculture was fed with wild fish, um, which didn't really help with the sustainability um ratio to, to say the least. Then a lot got replaced with other protein sources, because someone needs to eat protein, uh, to a certain extent, um, what are you using? What have you seen? Also there, I'm imagining the, as you said, the feed technology and feed users has been insane in the last 50 years. What have you seen there and what are you up to now? Or what are you using now?
Speaker 2:It's quite interesting. The feed part of this was one of the first things I saw as something we needed to change. And you know, in the salmon salmon industry, there are three big players when it comes to feed. They are controlling everything when it comes to atlantic salmon and feed. So we actually we had a good cooperation with one of them and we went to them and say that we, we want to change our recipe, we want to make our own recipe. And they looked at us and were like, uh, why? Why we make the? We make the cheapest, best one possible for you guys. Why do you want to change it? And we said, yeah, we want to change it to something better. If it costs more, then that's, that's okay with us. And then they were like, oh yeah, of course we. We even have a sustainable director in the back care that we haven't used at all Somewhere in the corner.
Speaker 1:He's very sad. Let's call Marcel.
Speaker 2:He was sitting in a corner in an office just dusting down and not doing anything. And of course, we got him engaged. And yeah, like you said, we were selling to the US market they had. When I was traveling around meeting the customers, meeting different buyers over there, everyone had some pointers they came with and the feed was one of the things where I saw the farmers have not changed anything. They let the feed industry just make it more and more yeah, how to say? More and more not sustainable, more and more not sustainable, more and more cheaper and better for the farmers they could produce cheaper and omega 3 levels were going down. We're using more vegetable oils and stuff like that. At one point I think it wasn't good for industry. So we told them we them, we want to feed, that we want to build back to omega-3 levels and the right balance of omega-3 as a wild salmon.
Speaker 1:Because that's one of the reasons we eat fish. I mean, apart from tasty and part of your diet, if not, etc. Omega-3-6 ratio is very fundamental. And it was completely wrong in land-based animal protein as well.
Speaker 2:Yeah, yeah it is 50% of what it was when it comes to salmon. So it has completely…. Because of feed, yeah, so we took that and we challenged them. Because of feed, yeah, so we took that and we challenged them. We said to them we need a feed that is more sustainable. We want a natural colorant on the feed. That's one point, and that was possible with something called Panafer, that it contains the same ingredients as a synthetic but it's made out of a yeasted bacteria, so it's the same colorant that the fish would get naturally from chimps or similar crustaceans.
Speaker 1:The pinkish color is not natural in most farmed salmon. I'm imagining no synthetic. Enjoy tonight, wherever you're gonna live after listening to this, good luck.
Speaker 2:Yeah, I don't know more and more people more and more farmers are now looking to one of our or our feed solutions. It was quite funny when I started doing this. People were laughing at me and saying you are, you are not. This is never going to work, you're never going to get more paid for a salmon and you're never going to succeed in increasing costs and doing things with the feed. But it's 10 years now since we really innovated the feed. We have a 10-year anniversary actually this year and our feed now is. A lot of farmers are asking to buy some of the same ingredients that we are. They want that included in their feed.
Speaker 1:Are you still with the same company?
Speaker 2:Yeah. And the same sustainability guy, yeah, same, and he has now two assistants. So, believe it or not, and I'm actually next week I'm going on a trip with them to Scotland to look at their feed production there. But, yeah, the feed we have done. That's where we have innovated the most. I feel that the lasers and everything that's cool and that's very innovative, but the feed is where we have. We are miles ahead of everyone else when it comes to feed what's the big differences, except for the colorant?
Speaker 2:the, the natural colorant. The cleaning of pcb and dioxins in every in the fish meal and fish oil that's included. The use of North Atlantic fish meal and fish oil and only cutoffs from byproducts that were not for human consumptions. The use of European soy. The use of algae meal that has been able to increase the omega-3 levels to where we are now with wild salmon we're actually a little bit over wild salmon also and the right balance. And then the krill that we use has a double effect on both omega-3 and colorant. And now we're looking into adding insect meal and reducing, even reducing, the fish meal that we use. You know we are a net producer of protein. 0.48 to 1 is the fish-in fish-out ratio in our feed.
Speaker 1:So we produce almost twice, or we produce twice as much protein as we use in the feed to produce, which I I don't remember the numbers from my time at aquaspark, but I remember the super specifically, but that's really really low. It's really high like two, like that. But the 0.4 is is very, very, very impressive and has it been recognized by the market, like on the buying side or on the sorry people buying from you because people said you're crazy for paying more for your feed and increasing your cost. But if you're, if you can absorb that, then it's okay. But you're never going to get people to pay more for for different and you were meeting far earlier. You were meeting buyers that that said we feed is an issue and you you started 10 years ago to address that. Has that resulted in in better, um better sales or different sales, or being able to access markets that others can't because they're not miles ahead as as you are?
Speaker 2:yeah, it's. It's been, um, absolutely. It's been a long way to get to where we are, uh, but absolutely I would say that the the the relationship we have built with some of our customers regarding communication on what we're doing and why we're doing it has has really improved and really given us the price premium that we needed to keep on developing what we're doing right now. So the answer to that is absolutely, and we're still just scratching the surface on the potential of what's possible to do there yet, and it's all about communication. We're trying to. We're not saying that we're better than any other farmers, because all farmers are doing a hell of a job, but I'm saying that it's possible to do even better and that's what we're trying to achieve.
Speaker 2:We're trying to be in the front of sustainable farming and leading the way and taking the right choices for everyone. That's why we haven't patented our feed. It's openly. It can be bought by anyone else through BioMar if they want to, because it will benefit us. Also, if more people buy more of those raw material that we use, it will reduce the price on some of the raw material. We have no goal. I've been learned or. My teacher when I came into industry was my father-in-law and his father. Again, they built the industry by learning from each other. There's no secrets in the industry, everyone trying to have the same goals. We're trying to raise a sustainable salmon and trying to build an industry for the future.
Speaker 1:And before we wrap up with some final questions how has been the effect on the health of the salmon, this, this feed journey you've been on? Has there been an effect? One, of course, omega-3, but like the salmon itself, have you seen differences in them?
Speaker 2:yeah, I would absolutely say that's uh. Then again, it's biology. There's so many things that has an effect on a fish in the sea and so many things you can't control. But I would say yes to that answer and just because I have seen the development since we started 10 years ago, I've seen the problems we had with melanin spots, that's like in famous spots on the filleting that the fish gets from from the sea and and stuff like that with with our feed. It has improved significantly and lower mortality with lower density, all of those things, but it's a combination of a lot of things.
Speaker 1:Yeah, as as always and yeah, yeah, what would you tell people that are listening? But also, I'd like to ask this question let's say we're in a theater in Oslo, in the financial heart of the salmon industry I don't know if that's Oslo, but a lot of people managing wealth, managing investments their own money, maybe other people's money and they're learning a lot tonight because they learn a lot on the salmon industry. They might knew already something, but for sure they learned a lot. Um, but if there's one thing you want to, to choose one seed you want to plant in their mind that they um remember the next day when they're back at work, when they're back at the laptop or back on their farm. Um, but what on the financial world? What do you think should people absolutely know about? About aquaculture, but sustainable aquaculture, about sustainable aquaculture and about what's possible and what's not possible. What is a seed you would like people to remember if they have listened to this for an hour or for an evening?
Speaker 2:Oh, that was not the easiest question I've gotten. I think the most important things to remember is that the industry is young. Even though we have seen the development we have had the last 10 years, which are insane, we still have a long way to go before we can call ourselves an industry that's there for the future. I think people have to understand that the development isn't finished. They have to understand that we're not doing this because we want to kill salmon or stuff like that. We're trying our best to figure out how can we farm salmon in the best possible way, and I think they will see that more and more people will move in the right direction. Be patient. This is the best way of feeding a growing population. We're only using 3% of the water in the world to grow food, so we need to figure out how to do this even better for the future, and I personally I invest in a lot of salmon farms that are on the stock exchange because I believe they have unlocked potential still.
Speaker 1:And that's actually a perfect bridge to the next question. If you would be in charge of a large investment fund, I don't know how much you're investing, but I'm guessing it's not and correct me if I'm wrong, but I'm guessing it's not a billion, let's say euros or more. But if you had a fund that size and you had to put it to work um could be aquaculture, could be beyond that as well, but what would you prioritize? What would you focus on? Is it the technology side? Is it genetics? I'm not saying gmo, but is it? Is it, um, hybrid systems, like you talked before? Is it the feed things? What would you if you had a significant pot of money to to put to work? Investing could be super long term uh, doesn't have to to do, it doesn't have to be six years or something. But what would you focus on if you had that kind of resources to to invest?
Speaker 2:again a very difficult question, because I, because I have so many things that I see a potential in, but I would maybe focus on genetics, investing more money into that, because right now we're behind on the genetic side of it. We don't have enough raw production to keep on growing the industry. And then, of course, as we are, I would invest in land-based farming, because land-based farming, especially flow-through systems, will succeed and will grow exponentially going into the future. Now, so those things, if I were to just look at what would benefit me and my farm and my things, but it's and any moonshots, any extreme things.
Speaker 2:I would buy the laser company. They have a future for sure.
Speaker 1:But don't tell the singer that I would do that, but yeah you just mentioned it on a podcast, but I'm glad they listened to this one. Yeah, and so it's yeah, and in feed would you do if you'll be able to fix something or invest in something potentially fix it, would you place some bets there as well? Long-term bets, I mean on the insect side, or seaweed, or algae, what are things that you find interesting but you just don't have the investment side Plenty of new things that are coming.
Speaker 2:That I would find very interesting. For sure Not the bigger feed companies, because they're just the drivers of new things Everyone has to go through them but the new technology before they enter as a raw material. There's a lot of development being done and we have, believe me, we have been part of a lot of interesting tracks that are still ongoing on new ingredients, new protein sources, new stuff, one celled things and, like you said, insect meal and even algae is now for colorant. That's very interesting. That's why I say that if I got a billion to invest in, it wouldn't be enough. I would make it smaller investments in a lot of things instead of bigger investments in fewer things.
Speaker 1:Because you build a portfolio, which is probably very healthy. And as a final one, because I want to be respectful of your time, if you had a magic wand and you could change one thing with the tick of a button overnight, what would you change overnight, which could be anything? Literally remove sea lice from this planet, it could be fixed feed for everything, or something way more like global consciousness. We've had all of those answers in the last, uh, in the last eight years. What would you do if you had the magic power to change one thing overnight?
Speaker 2:my initial thought would be the lice, of course, because of all the challenges and things that comes with it. But then again, you, you never know how that will affect the whole biology. Probably something else comes back. Would something else just pop up then? So we use the magic wand on that one would be preferable, but at the same time a little bit skeptic. So, yeah, maybe, maybe, I don't know. It's that one is hard, maybe I'm. Actually, if I didn't use it on that one, I would have to use it on some kind of magical way get rid of all mortality in the salmon. But that again, if we can't kill the salmon and feed people with it, it's uh, that's a problem. Also, it's a magic wand. I'm not sure.
Speaker 1:Yeah, it's a difficult question. Fair enough, fair enough. I want to thank you so much for your time today and and for, of course, the work you do and waking up every day at five to change and to work in an industry with enormous potential, short history but pretty impressive history and a lot of challenges, and you're affronting them with great knowledge and also with, I can see, with a lot of humor, which I think is needed.
Speaker 2:So thank you so much for coming on here and for sharing your journey with us. Yeah, thank you. Thank you for having me. It was a pleasure.
Speaker 1:Thank you so much for listening all the way to the end. For the show notes and links we discussed in this episode, check out our website investinginregenerativeagriculturecom. Forward slash posts. If you liked this episode, why not share it with a friend or give us a rating on Apple Podcasts? That really helps. Thanks again and see you next time.
