Seafood, technology, and sustainability: the winning combination of Bluefront

    "We have to cultivate the ocean the best way possible by focusing on both ocean and animal welfare,” said Haga.

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    WeAreAquaculture interviewed Kjetil Haga, co-founder of Bluefront Equity (Bluefront), a Norwegian-based investment company that supports companies in the seafood sector, with expertise and capital.

    Bluefront’s philosophy is based on dedication and expertise in the sector, which they use to hold up companies that make the seafood sector more sustainable. For this same reason, its investments are based on products, services, and technologies that help to make the product and/or the value chain more environmentally responsible and efficient.

    Kjetil Haga has a long history in the seafood industry, as well as experience in seafood investments. Thus in the interview, he gives an insightful perspective on the company’s values, the future perspective of the industry, and Bluefront`s approach to innovation and environmental responsibility.

    How everything started: seeing the simple in the complicated

    We spoke to Kjetil Haga about the entrepreneurial experience at Bluefront and how the fund started in 2020. One of the most complicated scenarios, where the pandemic became the world’s main problem and uncertainty in investments was a big question mark. “When I look back, it didn’t matter as much. It was a positive thing in some way because we just locked ourselves in our basement,” he stated. “We started to work on all the materials, the presentations, the due diligence questionnaires, the investor materials, shareholders, agreements and we spend three months working non-stop.”

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    After months of work, where the basis of Bluefront began to be laid, they started having sits downs – via video call – with different investors. “The stock market and everything had settled and the uncertainty was not as high as in the beginning. So, a lot of confidence was coming back to the market, but of course, there was a problem getting physical meetings.”

    In this way, Haga explained that trust is a key aspect of investments and that “there are not many people who invest in people without ever having met them”. However, all of that highlighted the value of technology, as well as his vision took on a more important meaning.

    Kjetil and Simen, the founders. Photo by: Bluefront.

    Bluefront believes in the long-term

    WeAreAquaculture asked Haga about the challenges the company is currently facing in times when uncertainty and the economy are not the most beneficial. He explained that the implications of the Ukraine war and worldwide inflation are monitored closely, but they remain secure in their view on the seafood sector.

    The issue is clear: “For the [trend of] growing population, we need more food. The food that we produce needs to be produced using less land and less fresh water.” So in this situation, seafood and salmon have a leading role in the production of effective protein. Therefore, “if you look at it from a long-term perspective there’s nothing that is threatening the long-term macro trend” such as the war or the “salmon tax”.

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    Technology and seafood: a must-have combination

    “There was zero volume growth from 2021 to 2022 in the salmon sector” he stated and also explained that “if you look at the forecasts, people are not expecting a lot of growth and that also relates to why we have such high prices. The reason for the limited growth is that we need to be able to convince both our government and people that sustainable production is possible.”

    Characteristics. Photo by: Bluefront.

    The main objective is to produce more food using less land and water, and the form to reach it is technology. “How can we produce more with less impact? Of course, we must move production. Maybe produce more on land or in closed-cage solutions. Or maybe we have to produce more offshore.” Therefore, this requires the support of industry-related technology, and this is where the following comes into play. “We try to support future aquaculture solutions” How? Based on the philosophy that if you do not have it or it does not exist, you have to create it.

    “We have to figure out new solutions for basically everything. This is what Bluefront is; a company that supports traditional and alternative production methods, with more sustainable production methods.”

    They estimate that only 1% of revenues are used to invest in digitalization

    “If you look at our portfolio and the investments, you have seen that we have moved towards doing software and or digital data-related investments. That’s because we believe that this sector is underinvested.”

    They estimate that only 1% of the seafood companies’ revenues is used to invest in digitalization and it usually just returns to companies, but not the industry. “We believe that there is a lot of potential. So that’s one thing that has been a focus for us and we will be going forward.”

    However, they have many open fronts. “Since we are now starting to race the new fund, we will focus on the things which are important to drive the next industrial farming wave in more closed systems offshore and on land.”

    Small companies, big opportunities

    The Bluefront co-founder explained that the seafood supply industry is like a pyramid, with a few, large companies at the top, and small and medium-sized companies in the middle and below. Therefore, these large companies do not have time to look at the opportunities created by the companies at the bottom, but Bluefront does. “And that’s what defined us,” he added.

    The main idea of the company is to grow the value chain while making it more sustainable. However, this move also makes them interesting for the big players.

    Kjetil Haga. Photo by: Bluefront.

    Their last agreement and one example: Spillfree investment

    In conversation with Kjetil, he told us about their latest investment, Spillfree. The main goal of this investment is to help fish farmers to improve their fish feeding and to reduce feed spillage.

    Spilfree is creating artificial intelligence that analyzes live video to give the feeder decision support. ”Since feed represents 40% of the production cost and the biggest cost for a farmer, to be able to feed just a few percent better, is huge, huge money. So this is a perfect place to use artificial intelligence and digital solutions.” Moreover, he explained that this has a direct impact on both, the P&L and the environment, because by using this technology feed spill is reduced.

    From his point of view “It’s good from an economical perspective, but also for the environment, which for me makes a perfect investment hypothesis.”

    About Bluefront Equity

    Bluefront Equity is the only independent, Nordic private equity firm that focuses solely on the seafood industry. Thus, the fund invests in small and medium-sized seafood companies that can make the future seafood industry more sustainable. Bluefront Equity was established by Kjetil Haga and Simen Landmark and is based in Oslo.

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