Compounders of the Sea: Inside the Salmon Oligopoly

“A smooth sea never made a skilled sailor.”

– Franklin D. Roosevelt

arvy's teaser: In the cold waters of the North, a quiet oligopoly has mastered the art of protein production. Salmon producers compound like clockwork — but even these sea kings now face storms that test their reign.

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Fish.

Or Aquatic Foods.

A key protein source for over 3 billion people worldwide — and eaten at least once a week. In numbers? Aquatic foods make up 17% of global animal protein and 7% of all protein consumed.

And in developed nations? Eating habits are shifting. Consumers want healthier proteins. Think of the success of kaisin. (co-founded by our advisor Noah), Tiny Fish, ONA POKÉ, and others across Zurich — a movement driven by health-conscious urban lifestyles, rising disposable income, and a desire for cleaner nutrition.

In this context, aquaculture — the farming of aquatic life — has quietly become the fastest-growing food-producing sector in the world. It’s been around for decades, but only recently did investors start to pay serious attention. And here at arvy? We believe the most attractive corner of the sector is what we call the compounders of the sea: Salmon producers.

But before we dive into why they matter — and what makes them attractive — let’s stay honest.

This isn’t just a clear blue ocean.

There’s a dark side too.

Let’s break it down.

Chart 1: Demand is increasing – global fish consumption since 1950

Source: FAO, The state of world fisheries and aquaculture 2018

Aquaculture & The Salmon Boom

Let’s zoom in on the aquaculture and salmon fish market — and what makes it stand out.

It’s a young industry dominated by a few, powered by rising global demand for seafood. Over the past five decades, fish and seafood consumption has grown at 3.2% annually, double the 1.6% global population growth.

What makes this space especially attractive?

Traditional fishing is supply-constrained — limited by quotas and licenses. Meanwhile, aquaculture is scaling. In the 1990s, it represented just one-third the size of traditional catch. Today, it’s overtaking it (chart 1).

And here’s something we love at arvy. The market is filled with family-owned businesses — long-term stewards with skin in the game.

Meet the Compounders of the Sea:

• Mowi (Norway, $10B): Formerly Marine Harvest. The world’s largest salmon farmer, supplying 20%+ of global Atlantic salmon. Fully integrated — from feed and hatcheries to harvesting and marketing (chart 2). Family-owned.
• SalMar (Norway, $6B): A tech pioneer in offshore salmon farming. Lean, innovative, and family-owned.
• Lerøy Seafood (Norway, $3B): Vertically integrated across farming, processing, and distribution. Family controlled via Austevoll.
• Bakkafrost (Faroe Islands, $2B): Premium-focused, with tight control over its full value chain. Family-owned.
• Austevoll Seafood (Norway, $2B): A diversified player with exposure to pelagic fish, fishmeal, and a controlling stake in Lerøy. Family-owned.
• Grieg Seafood (Norway, $1B): Sustainability leader with a focus on biological performance. Family-owned.

Notice a trend?

The cold, clean waters of Norway, Iceland, and the Faroe Islands are home to the world’s top salmon producers. Norway alone accounts for over 50% of global exports. Add Chile, and these regions supply ~70–75% of the world’s farmed salmon.

So, what do we see?

Businesses that offer steady growth and promising investment prospects, optimization and consolidation potential due to moderate to low competition. In addition, the barriers to market entry are very high, as the available workspace is scarce.

After all, a quiet oligopoly of long-term operators. But — let’s not get carried away.

As said, this isn’t just a clear blue ocean.

There’s a dark side too.

Chart 2: Mowi’s fully integrated value chain

Source: Mowi, Investor Presentation 2024

The Dark Side of the Salmon Rush

For all the promise and protein, the aquaculture boom comes with real baggage.

Let’s be honest — salmon farming isn’t all smooth sailing.

We call them the shadows beneath the surface.

1. Environmental Damage: Fish waste, uneaten feed, and excess nutrients from open pens pollute local ecosystems — hurting water quality and marine life.
2. Sea Lice & Disease: High fish density fuels outbreaks of parasites and disease, which can infect both farmed and wild populations.
3. Antibiotics & Resistance: Overuse of antibiotics raises long-term health and environmental risks. Though better regulated in Europe, it’s still a red flag globally.
4. Escaped Fish: When farmed salmon escape, they disrupt wild populations through interbreeding and competition — impacting biodiversity.
5. Animal Welfare: Salmon are sentient — yet overcrowding, stress, and injuries remain major concerns for ESG-conscious consumers and investors.
6. Documentary Blowback: And then, there’s Seaspiracy (chart 3). The 2021 Netflix documentary stirred global attention — shining a harsh spotlight on the fishing and aquaculture industries. Some claims are contested, but the broader message lands: our oceans are under pressure, and salmon farming is part of that conversation.

We highly recommend watching it — not because it’s perfect, but because it forces the right questions. For investors, consumers, and operators alike.

And yes — I am being tough here. But to make a conclusion, the “Good Story” of the salmon sector is not a villain per se. Ultimately, it is still the most efficient animal protein in terms of production. But it's not a fairy tale either.

Let’s check the “Good Chart”.

Chart 3: Seaspiracy documentary on Netflix

Source: Netflix

The “Salmon Tax” Storm

Our Nordic friends had been stellar compounders — easily clocking 20%+ annual returns for over a decade.

But then came one brutal day.

In a bid to plug Norway’s 2023 budget deficit, the center-left government dropped a bomb on September 28, 2022: a new 40% resource rent tax on aquaculture companies using public waters — on top of the standard 22% corporate tax.

62% total tax.

Ouch!

The market didn’t wait. Shares of every major salmon producer went into free fall (chart 4).

The proposal quickly earned a catchy name.

“The Salmon Tax.”

As expected, outrage followed. Norway’s billionaire fish dynasties, small-town workers, and the entire seafood ecosystem pushed back hard. After months of debate, the final tax was lowered — to 25% — and passed in May 2023.

Still a bitter pill.

Still 47% tax.

Profitability – double digit net income margins down to single digit - took a hit, and the once-glorious compounders haven’t seen their stock prices reach previous highs since. What’s left are former champions trading at rock bottom valuations navigating headwinds where they once had a tailwind.

But who knows? Perhaps the rough seas will bring out more skilled operators.

And their time to shine will come again.

Only time will tell.

Chart 4: Mowi, SalMar, Bakkafrost, Austevoll, Grieg & Lerøy over the last ten years, in $

Source: TradingView