Dropping out of college to become a skateboarder and ending up as the CEO of a company is not a very common story, but it's not an impossible one either. It is the story of Matts Johansen, the man who, when we tell him how difficult we find the task that describes his CEO position on the Aker BioMarine website – "Matts is on a mission to improve human and planetary health" -, says that he has a different approach to things, which perhaps explains why the move to the corporate world wasn't necessarily a career decision that changed his life, but rather a life decision that changed his career.
After living abroad for many years during his twenties, Matts Johansen decided to return home to Norway, mostly for the sake of his children. He certainly couldn't have imagined at the time how this decision would lead to finding another new home for himself, a home within the Aker BioMarine family. Twelve years later, he is still there. He went from having only three people in his team to billing $300 million, though still in the red, he remarks, but about to be black. The Aker BioMarine's CEO has a plan, and it is a long-term one, "for life" as he says.
I worked in Telefónica, in Madrid, and in the Czech Republic, so I lived abroad with my family for many years. And then, when my oldest son was about to reach school age, we had to make a choice: 'should we stay abroad or is it time to go back to Norway?'. And we decided it was time to go back into Norway and then I was starting to think, 'ok, what do I do now?'.
It was 2009 at the time, and the telco business was going through quite a big change. During the years I worked in telco, it was moving towards a lot of content, owning buildings, TV, and different types of businesses. And we often asked back in 2009, 'what's the future telco?'. Typically, the answer was either what they call a 'dumb pipe' which means to simply provide access as cheaply as possible, or it was to become something more interesting with all these add value-added services on top. At the time, it was clear to me that it was moving towards cheap access. So, I thought it was perhaps time for a change.
And then, by coincidence, I got in touch with Aker BioMarine, which is part of the Aker Group, a very famous Norwegian industrial group, with a very charismatic and well-known owner named Kjell Inge Røkke. And I thought, 'this is going to be a great home for me'. I went from Telefónica, where I had this huge responsibility, 3,000 people and billions of Euros, to this very small company. I think I had three direct reports at the start, three people in total on the team, and zero revenues, but it was an opportunity for me to start a career in a very interesting company. And then, Aker BioMarine became quite a big success and it's been 12 years here now.
Yeah, it's an important mission, but I think that having a clear and strong purpose is important for all companies to be able to attract the best talents today. So, if you don't have a clear purpose, and if you don't have a meaning beyond just making money, then it's hard to get the best people. And you can say that we are lucky because we are in a position, in an industry, and with the types of products, in which it's possible to be clear about our purpose. Essentially, our purpose of improving human and planet health means that the products we make should improve the life of people, directly or indirectly, either by making aquaculture production more efficient so people can eat more seafood, or as supplements and health products that we develop.
When we make our products, we make sure that we take good care of the planet, and, in the short term, that means reducing our footprint. We have made significant investments in more environmentally friendly fishing boats and infrastructure the last 10 years, and we are going to take down our CO2 footprint by 50% in 2030, and be net zero by 2050, however, we are still setting a footprint on the environment.
So, we're not there yet, but our purpose, our long-term goal, is that we will get down to net zero. This impacts all the decisions we make in terms of our products, and all the decisions we make in terms of our investments. It's all based on that common, simple statement of improving human planetary health. We constantly ask ourselves: 'Will we improve human health?'. This is something that all our employees own and that everybody stands behind. It's very simple, but still, a difficult purpose to live up to.
I think the challenge a lot of businesses face is that they have a lot of legacy problems, and a lot of problems related to that fact, especially when it comes to sustainability. So, when it came to build up the krill fishery, we had the luxury of starting from scratch and saying 'okay, we want to build the most sustainable fishery in the world. How do we do it?'. Then we could start building from there.
For us, it was very clear from day one. We wanted to be the most sustainable fishery in the world. Before we put any trawl into the ocean, we made that clear. We would be the most sustainable fishery in the world. Then we partnered with WWF. And we asked them 'how do we become the most sustainable fishery in the world?'. That was the start of our partnership. And they gave us tons of things to do, which included becoming MSC certified, which is a big effort.
We are currently harvesting 70% of all the krill in the world, which means that we are the industry leader. If another fishery does something irresponsible, that hurts us, which means that we need to take responsibility for the whole fishery. That's why we established the Association of Responsible Krill Harvesting Companies, a united effort on the part of the krill industry to promote effective sustainability practices.
To manage the fishery even better, we developed our EcoHarvesting technology to minimize bycatch. This too is based on the input we received from WWF over the years. Every year we implement new things just to continually raise our standards. So, that's the benefit when you start from scratch and do it right from the beginning.
We believe we will. We are strong because we are investing substantially in sustainability and making sure that we're improving human and planetary health. This is because we believe that, long-term, we will grow faster, and we'll be more profitable because of it. But it's important to note that the aquaculture industry, for example, is still not willing to pay premiums for sustainable solutions. They're happy to choose the sustainable option if it's available, but they're not willing to pay more for it. We believe that there is no choice in the long-term because of the pressure of the taxonomy, with what's going to come in the capital markets as a result of that, and what's going to come from consumers and their increasing expectations. So, I give it two years, and then we will see a change. I think that even over the last few years, things have changed quite dramatically. Now, people want to listen to you. They still may not want to pay a large premium, but give it two more years, and I think they will be more willing. Then we will really start to have some major advantages due to having a clear position when it comes to sustainability. So, that's the bet we are making.
I value diversity a lot, also in terms of my own background. It doesn't come out so clearly when you visit my LinkedIn profile, but I started higher education and left after six months. I never finished university, and instead, I was a skateboarder for two years. After that, I eventually got a job. So, I do have a different background, which I think has been very useful for the companies that worked with because I have a unique approach to things. And I think the same goes for others from different backgrounds, from different countries, young, old, woman, man, and all types. This is something that we really believe in at Aker BioMarine. Just here in the Oslo office, I think we have around 15 different nationalities. I must say that it's quite hard to run a global business and stay global. Gravity will try to pull you into the corporate office, which is here in Oslo, so it's very easy to become Oslo-centric and be focused on the people that are here, that you meet at the coffee machine, and then forget about the people sitting in Australia, China, India, Chile, everywhere else. So that's something that I need to focus on all the time, which is why I make sure to host my all-hands meetings with all employees once a month. I always do that via video conference, so that it's the same experience whether you are in Oslo or Australia. I try to communicate as much as possible, and I make short business updates for all employees each week, just to stay in touch as much as I can. I think it's a real struggle for everybody that has businesses around the world to remember everybody in all the markets, all the competence, and all the unique talent that's out there.
Krill is the biggest biomass on the planet. So, it's not a problem from a sustainability point of view to harvest krill. But there are other species, such as birds and penguins, in Antarctica that are more vulnerable. That's why we strive to ensure that we don't get any bycatch when we fish. In traditional trawling, you pull that trawl to the surface and empty it in the vessel. In that process, birds and all types of animals will swoop in and try to eat from the catch, and then get tangled in it and often die, which is a general problem in fisheries. So, we had to develop a method to avoid taking the trawl to the surface. With our method, you can basically pump the krill from the end of the trawl into the factory, onboard a vessel. So, you never take the trawl to the surface, it stays at around 50 meters deep all the time. That technology was developed by our very own fisherman.
Typically, the way you work when you're on the fishing boat is that you are on board the boat for certain periods of time and then you are home for quite a long time. Many of our fishermen spend time thinking about how to make things work better in the fishery even when they're at home. So, this method of EcoHarvesting was developed by some fishermen while they were sitting in their garden during their off time. We believe in testing out ideas and trying and failing, and, eventually, we got this technology to work after about two years of trying.
This is an important part of the culture of our company. In this kind of fisherman culture, you must be creative, and you have to find ways to solve problems. Also, part of our DNA and culture company is something we call 'think outside the ordinary'. You just have to believe that there's always a way; we just have to figure it out.
Krill is a premium ingredient that you will put into the feed for salmon, shrimp, and marine fish. Think about salmon, for example. They are built to have appetite for the nutrients they need, and krill is a natural part of the food chain in the ocean. Krill is packed with all the nutrients, proteins, lipids, minerals that the salmon need. So if you add 4% of krill into the feed for salmon, their appetite is likely to increase because the salmon sense that 'here are the nutrients I need' and they will eat more, grow faster, and give the farmers better results.
We also see that the nutrients in krill, especially the phospholipid omega-3, are important for the immune system of the fish. For instance, after you treat the salmon for lice, you can put krill in the diet, and they quickly recover and get back on track. Another example is if you get a disease on a farm, krill in the diet will help the fish will grow faster and be more robust to fight off the virus.
More than that, krill impacts the quality of the meat. The inflammation in the muscles of salmon today is because their diet is not natural. There's a lot of vegetable-based diets being used, and not a lot of omega-3, which impacts the quality of the meat. By putting krill into the diet, you get better quality, less gaping, and reduced black spots on the filet. This results in premium quality salmon.
We believe that in the future, salmon, and other kinds of aquaculture species will develop as beef and chicken have done, with differentiated products. If you want good salmon, of higher quality, you'll pay more. Today all salmon is equal, but in the future, we believe it will be much more differentiated. And krill is a key component to achieve that differentiation in terms of quality.
I believe sustainability will be key. That includes everything from the CO2 footprint of the feed to the ingredients that go into the feed, and even to the transport of that feed. There are many challenging things from a sustainability perspective. We are transporting salmon, for instance, from Norway to Japan. That results in a large CO2 footprint.
The focus on sustainability will be driven by taxonomy on the capital markets and from consumers, which also includes concerns for animal welfare. Consumers are getting more and more concerned about how their food is being processed and produced and how the animals are being treated. So, that's also a key focus.
I think that another challenge is the expected growth in aquaculture in the years to come. Aquaculture is an efficient way to make food, and it's healthy and sustainable compared to other alternatives. So, I'm pretty sure there's going to be a big raw material squeeze. We're seeing it already now because of the COVID situation and all the logistical hiccups. It's going to be difficult to match the demand for farm fish with the need for raw materials that go into feed.
Those are the biggest common challenges that we are addressing at Aker BioMarine. If you put krill in your diet and take out some other ingredients, you will reduce your CO2 footprint and you will improve animal welfare. On top of that, we are a new novel ingredient that can help reduce the expected pressure on raw materials, both today and in the coming years.
We have been running for 12 years now and we have reached around $300 million in revenue. And I still think we have just scratched the surface of the potential that rests in the krill raw material. It's the biggest biomass on the planet, and we are harvesting and controlling around 70% of it, and those nutrients in krill are important for life in many ways. One thing is to explore how we can develop new applications to improve aquaculture quality, but also to investigate how we can use those same components to make medicines and maybe solve some of the major medical challenges we face, for instance.
I think we have just gotten started, we will keep on going. We've been growing about 30% per year for the last 12 years, and we'll continue to grow quite significantly. We are still not making money after 12 years and $300 million in revenues, but we are almost at break even. Hopefully, we are going to turn that corner this year, which would be the first year in the black rather than the red. This will be an important milestone for the company, as all a part of building up a new business out of a new raw material. It takes years and years of investment. But I think we're turning that corner now, so I think it will be quite exciting years ahead.
I'm ready and I'm committed. I've been here for 12 years already. I'm here for life.
When we said goodbye to Matts, we left him at his "home" in Aker BioMarine. A place where he welcomes anyone who wants to talk about sustainability with open arms. He wants to listen, be positive, and see if there is anything that can be done even better. It's a habit that he believes the aquaculture industry should adopt when it receives criticisms from NGOs. It's also a habit that has served him well so far, if not for nothing, Aker BioMarine is the only fishery with an A rating from the Sustainable Fisheries Partnership.
Aker BioMarine is a biotech innovator and Antarctic krill-harvesting company which consists of two business segments: Ingredients and Brands. Under the Ingredients segment, the company develops krill-based ingredients both for humans in the nutraceutical and dietary supplement space, and for animal feed applications for aquaculture and pet food.
