Fund manager urges stronger brand for Icelandic land based salmon

Gunnar Páll Tryggvason, managing director of impact investment fund Alfa Framtak, says Iceland must build a strong international brand for its land based salmon. He made the comments in an interview with Morgunblaðið.

Tryggvason said a presentation he gave at Arion Bank in the spring, at the Roundtable on the Ocean and Aquaculture, received an exceptionally strong and positive response.

“I think I touched a nerve with many people in the room,” he said.

Alfa Framtak has interests in the sector, holding stakes in Samherji’s land based aquaculture company on Reykjanes and in Sweden’s NP Innovation, which develops water purification equipment for fish farming.

“We believe land based farming can become a major pillar of the Icelandic economy. The question, however, is how we handle it to achieve the greatest possible results,” Tryggvason said.

He said Iceland was a resource-based economy seeking to maximise the value generated by its rivers, ocean and land.

Neighbouring countries ahead

Tryggvason said the Icelandic land based aquaculture sector, like Icelandic manufacturing more broadly, suffered from a lack of brand building.

“If we look at neighbouring countries that have made significant progress in this area, we only need to look at Sweden, with globally recognised brands such as Volvo, IKEA and Spotify; Denmark, with Lego and Novo Nordisk; and Norway, which leads the world in selling salmon under a strong brand,” he said.

“We do very little of this kind of thinking. That is why we have mainly remained a primary producer, allowing others to capture most of the added value.”

Icelandic land based aquaculture companies plan to invest around 400 billion Icelandic krónur in their development, Tryggvason said, with construction already well under way.

“That amount is enough to produce around 150,000 tonnes of salmon. This is a highly capital-intensive development, since an entirely new sector is being created from scratch,” he said.

Tryggvason highlighted Iceland’s competitive advantages, including access to clean and inexpensive energy, extensive expertise, and a long history and knowledge of fisheries.

“We have everything needed to succeed in this industry. But, as I said earlier, we think too little about the importance of the brand. Building the facilities is the easier part. Creating demand is more difficult,” he said.

Norway is the world’s largest producer of farmed salmon, Tryggvason said, and consumers in many countries associate Norway with salmon.

He said Norway began sea farming 40 years ago and had moved towards land based farming alongside it. Early marketing efforts helped persuade Japanese consumers to use salmon in sushi, which has since become one of the most popular types of sushi.

“They created demand and then began producing to meet it,” he said.

Asked whether Iceland had started at the wrong end by building production capacity before its brand, Tryggvason agreed.

“We should start immediately and look at how the Norwegians built their sea farming industry. We need to think about how the salmon is sold and under what terms. Is it sold as Icelandic salmon or land based salmon, and is it marketed as a luxury product or an everyday food?” he said.

He added that land based farming did not use sea lice treatments, caused no disruption to marine life and used green energy in production.