Scaling Into the Ceiling: Why Land-Based Salmon Has a Built-In Growth Problem

Even When It Works, It Doesn't Scale Like You Think

After the Atlantic Sapphire unraveling, many investors came away with a clear lesson: don’t confuse technical feasibility with operational resilience. But there’s a subtler, equally critical insight lurking behind the headlines—one that gets less airtime but carries just as much weight for anyone still circling the land-based salmon sector:

Even if these projects work perfectly—if the fish grow, the systems run, the mortality stays low—most of them still don’t scale.

Not in the way investors want. Not in the way that justifies billion-dollar valuations. The reality is that growth in land-based aquaculture isn’t additive—it’s duplicative. Every new kilogram of salmon requires a near-total replication of capex, permitting, regulatory negotiation, and social license. It's not a flywheel. It’s a copy-paste operation across hostile terrain.

The Scaling Mirage

Traditional investors are conditioned to expect that once a platform is up and running, scaling gets easier. Costs drop, margins expand, and growth accelerates. This is the entire premise of tech investing—and to some extent, it holds for traditional aquaculture as well. Net-pen operations benefit from economies of scale, operational leverage, and logistical efficiencies.

RAS? Not so much.

In land-based systems, each facility is site-specific, biologically constrained, and dependent on an incredibly narrow environmental envelope. The systems don’t scale naturally. In most cases:

• Permits are tied to volume.

• Water use and discharge limits don’t rise without fresh approval.

• Infrastructure has limited upscaling capacity.

• Community support can degrade as operations grow.

This means “scaling” a RAS system typically involves building another one. Not adding another tank. Not doubling production from the same footprint. Building. Another. Entire. Site.

The Infrastructure Illusion

Some operators claim their facilities are “built to scale”—that their intake, pumping, or power systems are oversized for future growth. That sounds good on a pitch deck, but in the real world, water rights don’t scale because your pumps do.

Regulatory bodies don’t care about your electrical capacity—they care about how much effluent you're dumping into their watershed. Environmental permits are not dynamic. They're rigid, conservative, and tied to original production volumes.

Even in countries like Norway and Iceland—where the permitting systems are relatively clear—production caps are tied to biomass, not ambition. Want to grow more fish? Get a new permit. Start a new EIA. See you in 24–36 months.

The Economics of Duplication

Let’s say your land-based farm nails 20,000 metric tonnes of production and hits a 25% EBIT margin. Great business. Now what?

You can’t just add 5,000 more tonnes like flipping a switch. You need new land, new community approval, and possibly a whole new intake system. It’s not scaling—it’s duplicating.

This is the heart of the issue: the next tonne of salmon costs just as much as the first. Sometimes more.

There is no cost curve compression. No margin expansion. And if biological risks rise with density—spoiler alert: they do—you may actually lose efficiency as you grow.

Investors Take Note: Growth ≠ Platform Value

Platform businesses create value by scaling cheaply. That’s why SaaS companies trade at 10x revenue and land-based fish farms don’t. You can’t franchise a fragile biological ecosystem. You can only build new ones—and each is a capital-intensive, operationally distinct challenge.

So, the math starts to look like this:

• $500 million for 20,000 tonnes

• $500 million more for the next 20,000

• Plus new permitting risk, startup delays, and possibly worse margins due to tighter site constraints

It’s not “scale.” It’s capital rinse and repeat.

Conclusion: Know the Ceiling Before You Bet the House

Land-based salmon farms may still play a role in the future of aquaculture. They offer biosecurity, location advantages, and sustainability optics that matter. But investors need to understand what they’re buying.

You’re not buying a scalable platform. You’re buying an industrial project with a hard cap on growth.

The returns may be real. The fish may be healthy. But the value ceiling is lower—and closer—than most decks admit. And once you hit it, there’s no magical upshift into margin-rich growth. There’s just more concrete, more consultants, and more risk.

Final Thoughts (and a Lightly Salty Call to Action)

If you’re still bullish on land-based salmon after this, congratulations: you either have iron conviction or you’ve stopped reading at the subheadings. Either way, good luck scaling your capital into a sector where every new fish requires an environmental review, three permits, and a small prayer to Poseidon.

But if you're an investor, analyst, or seafood optimist who believes in due diligence over PowerPoint pyrotechnics—get in touch. Or don’t. You can always wait for the next press release with “breakthrough” in the title and “delays due to unforeseen mortality events” in the footnotes.

Just remember:
Hope isn’t a strategy.
Margin expansion isn’t magic.
And fish don’t care about your model.

Questions, compliments, or righteous counterarguments are welcome via LinkedIn, email, or shouted across a fjord. I’ll be here.