Will Your Next Salmon Come from a Massive Land Tank in Florida?

Will Your Next Salmon Come from a Massive Land Tank in Florida?July 14, 2020

HOMESTEAD, Florida—On a former tomato field near the tip of the Florida peninsula, in a remote expanse of shabby nurseries growing palm trees and garden plants at the edge of the Everglades, there’s an imposing new building that doesn’t seem to belong in an area that doesn’t seem to change. It has clean rectangular lines, fresh white paint and a footprint nearly as large as the downtown Miami Heat arena 40 miles and a world away. It’s the first piece of an industrial complex that—if all goes as planned—will grow 20 times larger over the next decade, and will reshape the future of food.

This so-called Bluehouse is on track to become the world’s biggest land-based fish farm over the next decade, eventually producing a billion meals a year on a campus the size of the Mall of America. And the fish it will start delivering to American customers this summer are as incongruous as the behemoth of a building itself: Atlantic salmon, a cold-water species that has never been found anywhere near Florida and is almost always flown into the United States from the fjords of Norway or the frigid bays of southern Chile. Now the Norwegian firm Atlantic Sapphire has moved its entire river-to-sea life cycle into indoor tanks, aiming to supply nearly half the current U.S. salmon diet from the sweltering subtropics.

The Bluehouse is a high-tech experiment in productivity and sustainability, a supersized aquatic version of greenhouse agriculture that aims to solve a host of environmental problems plaguing conventional salmon farms in coastal waters. Its red-fleshed fish are growing without antibiotics or pesticides, without exposure to seaborne diseases or parasites, without escapes that could allow them to endanger wild fish, and without damage to the overfished and overpolluted oceans. It’s also a well-timed experiment in simplified logistics. At a moment when the coronavirus is exposing the fragility of elaborate global food supply chains—China recently banned salmon imports after false rumors of contagion, while the U.S. meat industry has struggled to keep slaughterhouses open and supermarkets stocked—the Bluehouse is about to start harvesting American-made protein that doesn’t have to be packed in Styrofoam, handled by multiple middlemen, or shipped around the world in carbon-belching cargo planes.

The technical challenges of raising salmon that never see the outdoors are immense. Just this February, a nitrogen-poisoning mishap in a tank at the company’s pilot plant in rural Denmark killed 200,000 fish. It’s easier to manage cages in the sea than to build gigantic tanks on land, and President Donald Trump recently signed an executive order to make it even easier by relaxing environmental protections in marine waters, which could relieve some pressure for eco-friendly innovation in the U.S.

But if it works, Atlantic Sapphire’s push to help feed the world with less impact on the planet could be as transformative as better-publicized efforts by plant-based protein firms like Beyond Meat and Impossible Foods. Conventionally farmed salmon already produce fewer greenhouse-gas emissions than pork and far fewer than beef, and the Bluehouse’s designers believe they drive even more drastic reductions while leaving the seas alone. Like the fake-meat companies, Atlantic Sapphire will initially charge more than conventional salmon producers, but it’s betting not only that consumers will pay a price premium to try home-grown sustainable fish, but that they’ll make it part of their permanent routine. Investors seem to agree; the company is now worth nearly $1 billion on the Oslo stock exchange.

“You think of potatoes from Idaho, lobsters from Maine, and now you’ll think of fresh salmon from Florida,” says Atlantic Sapphire’s chief financial officer, Jose Prado. “This will be the new thing, because the world needs what we’re doing here.

What the world needs is sustainably grown protein for a steadily increasing population, and the Bluehouse could produce enormous amounts of it. By 2031, Atlantic Sapphire plans to grow 220,000 annual tons of salmon, or 44 percent of current U.S. consumption, on a 160-acre tract that once grew about 5,000 annual tons of tomatoes. As one industry expert quipped to me: That’s a lotta lox. To put it another way, the goal is to produce about 15 percent as many tons of food as Florida’s citrus industry produced last year on about 0.03 percent as much land.

Atlantic Sapphire’s big advantage over its competitors in the protein world will be efficiency; it’s on track to use just 1.05 pounds of feed for every pound of salmon filet, while cows devour more than six pounds of feed for every pound of beef. And while conventional salmon farms are nearly as efficient at converting fish feed into human food, their supply chains are far more complex. Traditional aquaculture operations have to move salmon from land-based hatcheries at the ends of the earth to near-shore “net pens” back to on-shore processing plants, then can take a week shipping filets on trucks to planes to more trucks to reach American groceries and restaurants. Atlantic Sapphire will do it all at the Bluehouse, then put the final product on trucks to be delivered fresh anywhere in the U.S. within a day.

The obvious question is why Florida, and the answer is an almost miraculous quirk of geology. The area’s stratified underground aquifers happen to provide pristine fresh water that can mimic the river stage for young salmon, abundant salt water that can mimic the estuary stage for mature salmon, and a boulder zone where wastewater can be disposed of safely.

The more important question is why grow fish on land in the first place, and that answer boils down to a combination of rising demand and limited supply. The world keeps eating more seafood, and U.S. salmon consumption has been increasing about 9 percent a year. But the wild catch from the oceans has been stagnant for decades, while conventional aquaculture that uses coastal net pens is being constrained by environmental and regulatory problems; the state of Washington actually banned salmon farming in Puget Sound. Since fishermen are struggling to pull more salmon out of the seas, and farmers are struggling to secure permits to grow more salmon in coastal waters, there’s been a frantic search for a new approach.

“This space is changing so fast right now, it’s hard to keep up,” says Halley Froehlich, an aquaculture expert at the University of California at Santa Barbara.

A variety of potential alternatives are racing to the marketplace. Impossible, Beyond and other plant-based fake meat companies are working on fake fish as well, while the cell-based startups Wild Type in San Francisco and BlueNalu in San Diego have shown that they can manufacture salmon and yellowtail filets from cell cultures in a lab setting. There are also numerous efforts underway to transform conventional salmon farming, from “Frankenfish” genetically modified to grow faster to Chinese fish farms on oil rig-style platforms in the open ocean.

Still, moving aquaculture indoors is a particularly tantalizing solution to its economic and environmental problems, and Atlantic Sapphire is the most advanced of more than 50 land-based startups pursuing it.

It’s a wildly expensive, risky, infrastructure-intensive solution, still rife with unanswered questions. The complete BlueHouse is projected to cost more than $2 billion, and its all-indoor technology has never succeeded at anywhere close to this scale. It will eventually require hundreds of cylindrical tanks, most of them about two stories high and twice the diameter of an Ultimate Fighting cage, with different salinities for different life stages of the salmon. For 24 hours a day, 365 days a year, the water in those tanks will have to be circulated to mimic natural currents, oxygenated to help the fish breathe, filtered to remove their waste, and monitored to prevent die-offs. It’s complicated.

But Atlantic Sapphire’s founders, Scandinavian fish farmers who look like Vikings and talk like Silicon Valley tech entrepreneurs, have already raised $444 million in debt and equity to finance their pilot plant in Denmark and the early construction in Homestead. Anne Hvistendahl, the global head of seafood for the Norwegian bank DNB, believes they are about to crack the biological ceiling that is stunting the growth of traditional salmon fishing and farming—and remake a U.S. seafood industry that imports more than 95 percent of its salmon.

“They’ve got a really good story,” says Hvistendahl, who oversees loans to just about every major player in the salmon industry. “And they’re more than just a story.”

This fish story begins in the 1990s in the fjords near Alesund, a North Sea harbor city that was the epicenter of Norway’s renowned fishing industry as well as its then-new aquaculture industry. That’s where a precocious 15-year-old named Johan Andreassen, the son of a cattleman and grandson of a fisherman, got his first idea that would transform salmon farming.

The net pens that Norwegian farmers were using to raise salmon in the harbors had been infested by deadly parasites like sea lice, and some of the farmers had begun experimenting with “cleanerfish,” a native species (known as wrasse in America) that eats sea lice off salmon skin. So Andreassen and his cousin, Bjorn Vegard-Lovik, started fishing their beloved fjords for wrasse. They eventually built their two-teens-and-a-boat operation into a thriving national business, providing wrasse to salmon farmers all along Norway’s coastline as a natural alternative to pesticides and medicines. By the time Andreassen was 22, they were using their wrasse to create their own pioneering organic salmon farm near the Arctic Circle, and their company, Villa Organic, had landed an exclusive contract to supply Whole Foods.

“They saw we were young entrepreneurial guys, trying to do good for the environment, and they just said: ‘We’ll buy all your fish,’” says Andreassen, now 43, with the strapping 6-foot-3 frame and rugged cheekbones of a Nordic movie star.

Villa Organic was considered a leader in green innovation, reducing the damage to the sheltered cold-water bays where salmon were grown, helping to develop Norway’s organic standards for farmed fish. But Andreassen could see the negative effects that even carefully managed net pens had on sensitive coastal waters. And he says it never felt right to grow perishable food in the middle of nowhere, truck it thousands of miles to airports, then fly it to the United States.

“We were trying to do it as sustainably as we could, but it just didn’t make sense,” he says. “Nobody puts beef or pork or chicken on a plane.”

Andreassen and his cousin sold Villa Organic to a seafood conglomerate in 2009, then started researching how they could use their windfall to grow salmon closer to the U.S. market. They initially figured they would use indoor tanks only to replicate the freshwater stage that wild salmon spend in rivers, then shift the “post-smolt” fish to coastal net pens in a state like Maine, which has calm and cold inlets much like Norway’s. But while most of America’s environmental rules are much less stringent than Europe’s, its coastal protections are much tougher, and the cousins began to worry the regulatory hurdles would be insurmountable.

It was only after a trip to Chile, where sea lice and other diseases were ravaging the industry’s net pens, that they began thinking about moving the entire 20-month life cycle of a salmon indoors to a controlled artificial environment—not only the river stage, which ends well before the fish even weigh a pound, but the saltwater “grow-out” stage, which fattens the fish to their 10-pound harvest weight, and had never been tried on land. They proved the concept at their pilot Bluehouse in Denmark, which has now harvested more than 25 generations of salmon, and can send more than 2,000 tons a year to European customers.

The problem was finding a U.S. location that could produce 100 times as much. The team investigated and rejected a dozen different states before Andreassen happened to Google “groundwater disposal,” then clicked on a random YouTube video about Florida’s aquifers. He learned that the underground limestone south of Orlando was like an ancient layer cake packed with everything the Bluehouse needed—the freshwater Biscayne Aquifer near the surface, the salty Floridan Aquifer below it, and a boulder zone that could confine wastewater even further down. Soon he was setting up shop just behind the levee separating Everglades National Park’s alligators and saw grass from South Florida’s civilization, in a hidden corner of the region that few residents encounter unless they’re looking to buy orchids or bromeliads.

“I couldn’t believe what I was seeing,” Andreassen. “Who would’ve thought that hot and humid Florida would be the perfect place to raise salmon?”

Fresh water is the lifeblood of the Everglades and the South Florida economy, but the Bluehouse will actually use less fresh water than the tomato farm it replaced. And it’s the only commercial operation with any interest in using the Floridan aquifer’s salt water, which is cleaner than the sea, and has none of the microplastics that often contaminate seafood. Atlantic Sapphire had to build costly state-of-the-art injection and monitoring wells to dispose of its nutrient-rich wastewater and make sure it doesn’t migrate into groundwater, but Florida regulators say it’s having no evident impact on local aquifers.

The main downside of the Bluehouse is the energy expense of keeping the water cold, but electricity is fairly cheap in Florida, and geothermal cooling as well as heavy insulation helps limit the power bills. Andreassen also hopes to add solar panels down the road to cut costs and carbon emissions even further, but while electricity is the operation’s second-largest cost after feed, Andreassen says it’s still much cheaper than flying planeloads of salmon across the ocean.

Still, Atlantic Sapphire is swimming upstream, so to speak, and there’s a lot that could go wrong on its journey. Its relatively modest Danish plant had to be shut down to deal with a nasty bacteria outbreak shortly after it opened in 2012, a painful early lesson in risk management. The more recent nitrogen-overdose fiasco wiped out a quarter of its annual production. Thue Holm, a Danish aquaculture expert who co-founded the company with the cousins and is now its chief technology officer, says that if you’ve ever had an aquarium, you know how hard it is to keep a few fish alive indoors. The Bluehouse will eventually have 4 million square feet of aquariums, most of them holding nearly as much water as an Olympic-sized pool.

“You’ve got to maintain the filter, keep the air pump working, keep everything clean, feed the fish properly—all kinds of challenges,” says Holm, a grizzly-bearded fish lover who tended 80 aquariums as a kid in the Danish countryside. “These are the same kinds of challenges, just harder.”

The first 4 million Florida-born salmon are now swimming in the Bluehouse’s tanks, and Andreassen says they’re healthy and thriving. “The fish have ways of talking to us, and you can tell these are happy fish,” he told me. I couldn’t evaluate their moods when I visited last month, but they’re certainly surviving and gaining weight. In public filings, Atlantic Sapphire has reported low mortality rates and solid growth rates. It plans to start selling Bluehouse-branded salmon in the U.S. before September ends.

My trip to the Bluehouse was the first time I worked outside my house since the start of the pandemic. Since I live in Miami, it was also the first time I wore long pants since the start of the pandemic. I drove south down the Florida Turnpike to this rural community at the gateway to the Keys, passed a bunch of nurseries growing palms, ficus trees and ornamental plants for Miami-area homeowners, and headed down a dusty road to a frenetic Miami-style construction site where workers were finishing the roof on that imposing white 390,000-square-foot building. Security officers took my temperature, made sure I had a mask, and led me to a trailer where Prado, the chief financial officer, greeted me at the door.

“It’s coming together!” he said. “We’re building the future of protein.”

The coronavirus has wreaked havoc on every global company’s logistics; the Chilean experts who were supposed to help Atlantic Sapphire install its fileting machines can’t fly to Florida, so the company is trying to follow their instructions over Zoom. But Prado showed me how the pandemic has also accelerated the company’s plans for a “vertically integrated value chain,” corporate-speak for trying to do everything at the Bluehouse campus. There will be a breeding facility to try to improve the growth, health and even taste of the salmon through better genetics, an aquatic version of a stud farm for racehorses. There will be a factory to process discarded bones, heads and guts into omega-3 fish oil pills, pet-food additives and other zero-waste products. The company also plans to build an oxygen plant, manufacture biodegradable packaging materials, and convert its fish poop into fertilizer or biogas on site.

Atlantic Sapphire’s leaders were already obsessed with biosecurity before Covid-19, because they’ve seen in Denmark how one wayward germ can paralyze production. But they believe the pandemic has heightened consumer concern about where food comes from and how many hands touch it, enhancing the business case for salmon that spend their entire lives under one roof and a supply chain that minimizes exposure to the outside world.

“We were thinking about doing all this stuff anyway, but Covid has made the rationale so much stronger,” Prado told me. “It’s made the rationale for everything we do stronger, because ever kilo of fish we make here is a kilo that doesn’t have to be flown in from overseas.”

Prado then took me to visit the Bluehouse, which from the outside looked like a warehouse and smelled like, well, a farm; its well-fed fish already generate nine tons of sludge every day, which gets separated from the wastewater and, for now, trucked off the campus. Inside, it’s dominated by a few dozen concrete tanks, connected by more than 60 miles of pipes—and remember, it’s only about 5 percent complete. The first half-million eggs went into the water in November 2018, and as the fish have grown from tadpole-like hatchlings to tiny fry to anchovy-like juveniles to silvery smolts and finally to adults, they’ve moved into gradually larger tanks, while construction workers have scrambled to finish each section of the plant in time for their arrival. They’re now rushing to build the processing facility, where mature salmon will arrive through a pipe from the massive grow-out tanks, then be photographed, stunned, gutted, fileted, graded for quality and loaded onto trucks within a couple of hours.

The fish basically swim around all day in circles against an artificial current. While they seem to be crammed together even closer than feedlot cattle, Andreassen says they like swimming in schools—and that you can tell from their ravenous appetites that they’re enjoying their South Florida lifestyle. I saw hundreds of juveniles in one tank the size of an above-ground swimming pool lined up directly below a horizontal bar that dispenses their feed, as if they were queuing in a cafeteria. I then watched them swarm to the surface in unison as the feed hit the water.

As we looked through a window overlooking the much larger grow-out tanks, Prado pointed out mesh “jump nets” stretching a couple feet above their rims. Before I could ask what they were for, a glistening fish about two feet long leaped out of the greenish water, bounced off the net, and splashed back into the tank. Then another. And another. I couldn’t tell if the fish were frolicking or trying to escape, but they certainly looked active.

“You watch them learn to smell, take their first bite, start to act like salmon,” Prado says. “It’s a beautiful process.”

Of course, it’s an artificial process arranged by humans to get those fish on our plates; these salmon will never migrate to the ocean or find their way back home to spawn. And it’s an extraordinarily intricate process where the water chemistry, temperature, salinity, current and even lighting all have to be just right, where every drop must be recycled every half-hour and removed every 10 days, where precise amounts of oxygen must be added and precise amounts of carbon dioxide must be extracted. Andreassen says it’s like running a giant cruise ship, where every system has to run perfectly or else the passengers die. One reason the Bluehouse will be so big and compartmentalized is to make sure if glitches happen, like the bacteria contamination or the nitrogen disaster in Denmark, there will be plenty of survivors.

“As a farmer, that’s what keeps me awake at night, trying to make sure we don’t fail the fish,” Andreassen says. “But I’m sure we’ll have future incidents where we fail the fish again.”

Even if there are failures at the Bluehouse, they won’t damage the oceans the way conventional fish farms often do. In 2017, the collapse of a net pen north of Seattle allowed thousands of Atlantic salmon to escape, spreading disease and probably cross-breeding with the area’s wild Pacific salmon. Even well-functioning fish farms can contaminate sensitive bays, and in Asia, developers of shrimp farms often wipe out ecologically valuable mangrove swamps.

The only way the Bluehouse will affect marine waters is through its feed, which is mostly wheat, rapeseed and other crops, but is still about 30 percent fishmeal and fish oil made from herring and other products of the sea. Atlantic Sapphire is determined to replace those marine ingredients in the coming years, probably with some kind of microalgae, but it can’t yet claim that the Bluehouse has zero impact on oceans.

Still, Atlantic Sapphire should reduce damage to the earth’s waters. If it’s as transformative as its founders hope, it could reduce even more damage to the earth’s forests —and the fragile climate.

The biggest climate problem is fossil fuels. But the next-biggest climate problem is deforestation, which releases carbon while destroying natural sinks that store carbon. And the biggest source of deforestation is agriculture, specifically animal agriculture. We use one third of the land on earth to feed livestock, and if global meat trends continue along their current path, we’ll have to deforest another land mass half the size of the continental United States by 2050.

That would be game over for the climate, which helps explain the desperate search in recent years for less resource-intensive alternatives to meat, and especially to red meat. Cows are remarkable creatures, converting grass that humans can’t digest into beef that humans crave, but they’re a remarkably inefficient mechanism for producing human protein. Most of the food they eat goes towards activities that don’t directly create meat for us to eat—like staying warm, standing up, growing hooves and hides, gestating calves, even mooing.

By contrast, salmon are extremely efficient sources of protein. They don’t have to burn energy to keep warm, and more than two thirds of their torpedo-shaped bodies end up as filet. Farmed salmon in particular don’t have to expend energy foraging for food or fleeing predators, and the World Resources Institute has calculated that farmed fish in general are about twenty times more resource-efficient than beef. The top three companies on the FAIRR Index, a global ranking of protein producers on sustainability issues, all farm salmon.

Atlantic Sapphire expects to do even better. It hasn’t completed a life-cycle analysis yet, but it hopes to cut the salmon farming industry’s emissions in half by eliminating air freight and other inefficiencies, and perhaps by three-fourths if it can switch to solar power. The company also believes it can improve its productivity as much as 5 percent a year through better genetics, because unlike conventional farms, it won’t have to focus its breeding efforts on disease resistance or temperature adaptability—just rapid growth and efficient feed conversion.

“We can give the fish ideal conditions, and then we can breed the future generations for those conditions,” says Holm, the chief technology officer. “They’re only going to get better.”

That would be helpful, because the world will need a lot more fish to feed nearly 10 billion people by 2050. There aren’t likely to be many new fish in the sea, so aquaculture will need to double production worldwide just to make sure the average person will be able to eat the same amount of seafood. And if the goal is to prevent catastrophic climate change, by slowing down the expansion of animal agriculture and protecting rain forests, the average person in rich nations will have to eat a lot more resource-efficient seafood and less resource-intensive meat.

Unfortunately, the average American eats 15 times more meat than seafood, and 25 times more beef than salmon. European diets include much more fish than ours. But U.S. beef consumption has been mostly flat in recent years while salmon consumption is rising, and Atlantic Sapphire hopes it can help accelerate that trend. Industry experts say that if the Bluehouse approach is cost-effective for salmon, it could theoretically work for any finfish. But they also caution that aquaculture is a tough business, and that miracle cures for its problems tend to work better on paper than in the real world. Most of them expressed enthusiasm for Atlantic Sapphire’s concept, tempered by some skepticism about its revolutionary 10-year plan.

“I’ve seen a lot of grandiose solutions that don’t work out on a large scale,” says Rod Fujita, a senior marine scientist for the Environmental Defense Fund. “But I remain cautiously optimistic about the prospects for sustainable aquaculture.”

Andreassen believes that if the Bluehouse succeeds, America will transition from a nation that imports almost all its salmon to a nation that grows almost all its salmon, while reducing poop in its waters and emissions in its air. The next big test will be whether Americans will pay a premium for salmon that have never touched the sea.

Atlantic Sapphire’s marketing materials emphasize that it’s all-natural, American-made, healthy and eco-friendly, “good for you and better for our oceans.” But Froehlich, the UC Santa Barbara professor, says consumer decisions tend to come down to taste and price. Andreassen says Bluehouse salmon taste less fishy than most salmon, but he’s paid to say things like that, and there weren’t samples available when I visited. Froehlich says Americans have shown they don’t mind eating farmed fish, even though they don’t want the fish farmed in their local waters. But while they also claim in surveys that they’re willing to pay more for more sustainably produced seafood, those claims have not yet been proved at the cash register.

“It’s all going to come down to whether the demand is there,” she says. “It sounds like we’ll know soon. I’ll be keen to see how it plays out.”

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