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Rabobank: Aquafeed industry needs to think out of the box

After years of growth, the aqua feed industry is experiencing a deceleration, with increasing overcapacity in nearly all key markets globally. The aqua feed industry will need to think out of the box to find growth again, according Rabobank in the latest research report ‘How to Succeed in Aqua Feed: The Feed Industry Should Be the Driver of Change in Aquaculture’.

Aquaculture is a rapidly evolving industry, with significant changes occurring in the short and medium term. The industry is embarking on a transformation, driven by multiple technological developments that are all moving from the start–up or laboratory phase to a commercial scale in the next five years. This is an opportunity for aqua feed companies to once again become more than just feed suppliers.

Strategies

In the report Rabobank suggests 4 strategic directions which aqua feed companies can take, that can potentially have a large impact on their performance financially.

First strategy is to embrace new technological innovations, such as blockchain solutions and data-use in management software.

Secondly, focus on complementary products to feed. According to Rabobank, in aquaculture this can be a range of products- from vaccines to biocides and water treatment products used to control pathogens or manage water quality. Gorjan Nikolik, Senior Analyst – Seafood, “aqua feed companies can respond to the maturing fish-farming industry by combining feed with a range of complementary inputs, such as genetics, animal health products, data analysis solutions, hardware, and farm management software, in order to extract previously unobtainable synergies.” The combination of feed with other inputs can be a powerful way to create value for farmers and improve the profitability of input suppliers is explained in the rapport.

Aquaculture technologies

Another strategy mentioned in the report is to invest and develop novel feed ingredients. For example algae fermentation technology, to produce a high-quality protein to replace fish meal and soymeal ingredients. As last suggestion Rabobank is challenging the aquaculture industry to push the frontiers. Among others, by innovative technology such as recirculating aquaculture systems(RAS) and offshore aquaculture and the commercialization of new species. “Aqua feed players are well-positioned to act as investors in a number of rapidly evolving aquaculture technologies, ranging from novel ingredients to new farming techniques, such as recirculating aquaculture systems or offshore aquaculture,” according to Nikolik. “By (partially) transforming into aqua-technology suppliers or aqua-venture capitalists, feed companies may be able to enter the higher-growth and higher-profitability segments of the aquaculture inputs industry and drive the growth of the entire aquaculture industry.”