Kvarøy doubles down on Norwegian operations, expands in the US

Most Norwegian salmon-farming firms have cut back on their infrastructure investments due to uncertainties caused by the introduction of a federal 40 percent tax proposal on aquaculture operations, but Indre Kvarøy, Norway-based Kvarøy Arctic is moving ahead with several multimillion-dollar projects.

1814 Salmon, a new company formed by Kvarøy, Fram Seafood, and investment firm Nyhamn, is building a NOK 100 million (USD 10 million, EUR 9.4 million) seafood-processing factory in Eidsvoll, Norway. In development for two years, the new facility is expected to open in June 2023. “

"Now everything is in place with plans, suppliers, and financing,” Kvarøy Arctic CEO Alf Goran Knutsen, who serves as 1814's chairman, told SeafoodSource.

The facility will allow Kvarøy to process nearly all of its own salmon in-house, though it will still be using third-party processors for a portion of its production. The company’s eventual goal is to conduct 100 percent of its processing in-house in Norway, according to Knutsen.

"Ideally, one would have wanted the processing out here in Kvarøy, but it is not easy logistics. So the solution was to put the new facility down in the vicinity of the logistics on to the U.S.A., at Gardermoen,” Knutsen said. 

Equipment-maker Marel will deliver the technology for the new factory, according to Knutsen, who said around 60 new jobs will be created in Eidsvoll municipality over the next few years as a result of the project.

Kvarøy also recently finished a NOK 125 million (USD 12.5 million, EUR 11.6 million) renovation of its salmon hatchery. The expansion doubles its production output to 10 million smolt annually and will reduce the facility’s overall energy consumption by up to 50 percent.

Located in the Mo Industrial Park in Mo I Rana, Norway, Kvarøy Smolt has ample access to water and surplus heat from surrounding industry, Kvarøy Chief Marketing Officer Jennifer Bushman said. Kvarøy Smolt buys hot water from the adjacent Mo Fjernvarme and the residual cooling water from nearby Elkem Rana’s furnaces.

The hatchery has been upgraded with new energy technology and a new water-treatment plant equipped with new steel tanks from AKVA Group, each holding approximately 190,000 liters of water, that optimize oxygen recovery and reduce the hatchery’s overall water consumption.

“It means a future of more-efficient smolt production techniques,” Bushman told SeafoodSource.

In late 2022, Kvarøy also finished a NOK 6.5 million (USD 650,000, EUR 606,000) expansion, which includes a cafe “as a gift to the community that lives on the island,” Bushman said.

The looming tax increases in Norway are on Kvarøy’s radar, but are not prohibiting the company from continuing to invest in growth opportunities, Bushman said.

“So many companies have diverted from salmon farming in Norway, but we are still continuing to move forward with the investments that we committed to – even in the face of this uncertainty,” Bushman said. “No one knows where the tax thing is going to land. We are just hanging on and continuing to move forward. What else can we do?”

Bushman said Kvarøy is continuing to focus on delivering its core products – salmon fillets, smoked salmon, Salmon Hot Dogs, and Salmon Burgers – to its primary market, the United States. It is launching a new four-pack version of its Salmon Hot Dogs in Whole Foods Market stores and other retail outlets in the U.S., and is strengthening its partnership with Whole Foods’ Whole Kids charitable program.

While the Salmon Hot Dogs were previously only available in a two-pack, the new four-pack hot dogs “can sit with other hot dogs in the same format,” Bushman said. “We offer a standard pack size that people are comfortable with."

As part of the Whole Kids charitable program, USD 0.05 (EUR 0.04) of every four-pack of Salmon Hot Dogs sold will go towards the Whole Kids program this summer.

Kvarøy products are gaining distribution and to handle the added volumes, the company recently hired Cristi Dorry as national retail sales manager, Bushman said.

In foodservice, Kvarøy supplies True Food Kitchen, a restaurant and lifestyle brand with 42 locations in eight U.S. states, and it has recently formed new partnerships with a number of other U.S. foodservice outlets.

“By percentage, we are selling more fish into retail than food service, but True Food Kitchen represents the kind of opportunities we are looking for,” Bushman said. “We are collaborating with partners that want to tell the story.”

True Food Kitchen has a company tagline that it’s “inspired by the philosophy that food should make you feel better, not worse, and that great-tasting food and thoughtfully crafted beverages can serve as the foundation for a life well lived.” Bushman said that type of messaging aligns well with Kvarøy’s own brand and with where the U.S. seafood market is predicted to grow fastest.

“The values of the market have changed post-Covid. Now we have a customer set that really cares about [climate and sustainability],” Bushman said. “It provides an opportunity as we work to [attract] millennials: This means we have a growing opportunity to share our story with them because the intention behind our brand already aligns with their values.” 

Photo courtesy of Kvarøy Arctic