Silver Linings —

Silver Linings – Mowi ASA

Colin McPherson

Colin McPherson

Portfolio Manager

As the world strives to slow down climate change, Panorama portfolio manager Colin McPherson shares his thoughts on why this salmon producer is a good choice for the environment and for investment.

One of the unexpected impacts of working from home is that many of us (including myself) have been forced to learn how to cook.  I am always on the lookout for healthy recipes that appeal to the whole family, and a weekly staple that I have relied on is cooking salmon.  It is an easy meal to cook that tastes great and is also a nutritional super food that includes high levels of omega-3 oils, vitamins, protein, and antioxidants.  What you may not know about salmon is that it has seen consistent secular demand growth of 7%/yr over the past 25 years.  This is because it benefits from multiple mega-trends including global population growth, prioritizing health & wellness, growing middle class, aging population, and a focus on sustainability.  In fact, salmon is the most sustainably-produced animal protein in the world with the lowest climate impact.  One of our investments that benefits from these trends is Mowi ASA, based in Norway. 

Mowi is the largest vertically integrated salmon producer in the world with a 20% global market share of Atlantic salmon.  The company has been ranked the most sustainable animal protein producer in the world the past two years and produces over 2.5 billion salmon meals per year.  At its Capital Markets Day earlier this year, the company detailed plans to grow faster than the industry over the next 5 years, while also leveraging its scale to sustainably reduce costs.  It is planning to lower costs by increasing its automation and digitization with its Mowi 4.0 strategy.   This will reduce its required workforce by 10% going forward.  The company is also vertically-integrated from fish feed to retail and its production is globally diversified, both of which should help offset cost pressures and reduce the volatility of its business. 

Note: The figure reflects total water footprint for farmed salmonid fillets in Scotland, in relation to weight and content of calories, protein and fat
Source: Mowi, Fry et al (2018) Feed converstion efficiency in aquaculture: do we measure it correctly? SINTEF (2020) Greenhouse gas emissions of Norweigian seafood products in 2017. Mekonnen, M.M. and Hoekstra, A.Y. (2010) The green, blue and grey water footprint of farm animals and animal products. SARF (2014) Scottish Aquaculture’s Utilisation of Environmental Resources

Despite 25 years of growth, salmon still represents <1% of global animal protein consumption.  There is also huge variation in terms of how much salmon each person consumes in different markets.  The U.S., which is the largest market in the world, consumes only 1.7 kilograms per capita.  This is well below France, Germany, and the UK which consume over 2.5 kilograms per capita and the Nordics which consume over 6 kilograms per capita.  The U.S. market has had strong growth in recent years as more consumer-friendly products have been introduced and we believe this growth can continue going forward.

Throughout the Covid-19 pandemic, salmon demand has remained resilient even though over 40% of salmon is consumed at restaurants, which have suffered from lockdowns and social distancing measures.  Despite global salmon demand from restaurants remaining below 2019 levels, demand has been more than offset by a pickup in retail demand as consumers like myself increased their consumption at home.  As a result, overall demand for salmon has already recovered to levels above 2019 and we expect demand to improve as restaurants continue to reopen.

Another attractive aspect of the salmon market is that global supply faces high barriers to entry as supply is controlled by tight regulation in key markets like Norway, Chile, Scotland, and Canada which representover 85% of total supply.  Supply is further restricted as salmon farming requires specific ocean temperatures and currents that limit the global regions that are acceptable.  As a result, global supply growth is only expected to be low-to-mid single digits for the next few years, which should be less than global demand growth and supportive of higher prices.

Based on our opinion, Mowi is well-positioned to capitalize on these trends with a strong management team, conservative balance sheet, significant free cash flow, and its goals are well-aligned with shareholders as insiders own 14% of the company.  The company currently trades at an attractive valuation and we expect salmon demand to continue to benefit from recovering restaurant demand in the short-term and strong secular tailwinds over the long-term.



Panorama Fund strives to maximize capital appreciation by investing only in securities that we believe offer above-average returns on a risk-adjusted basis. The fund employs a variety of strategies including investments in equity, bonds, currencies, commodities, and publicly traded real estate. The fund also makes prudent use of derivatives to generate yield and enhance or protect our positions.

As Wealhouse Capital’s flagship fund, Panorama takes advantage of market inefficiencies across different geographies, industries, market capitalizations and asset classes to build a balanced portfolio. We actively analyse different risk factors in the markets to better diversify and safeguard our clients’ capital.

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