Why Mowi Is Rethinking Fish Feed—and What That Means for Investors

Salmon farming remote feeding center

Back in 2018, I wrote about the wave of salmon farming profits fueling vertical integration—particularly into feed. Companies like Mowi (then Marine Harvest) were snapping up or building feed operations not to chase margins, but to exert control over what is arguably the most important variable in aquaculture: what the fish eat.

At the time, this made perfect sense. Farming was consolidating. Performance was stabilizing. Feed companies were keeping their cards close to the vest. So why not take that knowledge in-house? Feed accounted for more than half the farm-gate cost of salmon, yet farmers often negotiated those contracts armed with little more than crude protein percentages and hope.

Fast-forward to 2025, and Mowi is now considering selling the very feed business it built. What changed? And what should potential investors in Mowi Feed—now under strategic review—understand about this unique corner of the value chain?

The 2018 Rationale: Control Over Cost, Quality, and Leverage

When Mowi launched its feed division, the rationale was all about integration. Owning feed meant shaving millions off costs, understanding raw material sourcing firsthand, and reducing dependency on suppliers who guarded digestibility data like state secrets.

Feed negotiations were opaque. Contracts usually involved:

• Price and volume: quarterly price adjustments were volatile and opaque.

• Nutritional parameters: crude protein and energy targets—useful, but not definitive.

• Flexibility via least-cost formulation: the supplier could swap ingredients within a defined nutritional framework depending on market dynamics. Given the secrecy around true digestibility and inventory position, it was hard to confirm best pricing,

For Mowi, having internal formulation expertise changed the game. It gave them leverage even in regions where they didn’t produce their own feed. They knew how diets were built, how digestibility models worked, and what prices made sense.

Owning a feed mill also meant access to ingredient markets—fish meal, fish oil, soy protein concentrate—allowing Mowi to evaluate supplier performance beyond invoice price.

2025 Rationale: Complexity, Capital, and Corporate Focus

So why the potential divestment? According to Mowi’s 2024 Annual Report, it’s not about failure. The feed division just had its best year ever, with record volumes (585k tons) and operational EBIT of EUR 46.8 million—equivalent to a margin of just under 4%. This, however, pales in comparison to the performance of their core salmon farming segments, where EBIT margins regularly exceed 25%—and it meaningfully diluted the company’s overall margin performance, contributing just 5.6% of group EBIT while accounting for 20% of operational revenue—making feed look more like a necessary utility than a growth engine.

The issue is complexity. Mowi has become a 600k GWT farmer across 11 farming regions in seven countries. Add a growing branded consumer business and downstream processing, and suddenly the elegant simplicity of vertical integration turns into operational Jenga.

The strategic review of the feed division is about streamlining operations—deciding what’s core and what’s auxiliary. While feed offers moderate, stable returns, it doesn’t match the capital efficiency or strategic lift of farming or brand development. It’s a good business. It might just be a better business for someone else.

What Buyers Should Know: Contracts, Costs, and Constraints

For potential investors or acquirers of Mowi Feed, understanding the mechanics of feed contracting is key:

1. Least-Cost Formulation Still Rules: Feed suppliers build diets using current market pricing and inventory positions. Ingredient swings (fish oil, soy, wheat) can impact diets dramatically—even if nutritional outputs are roughly static.

2. Nutritional Transparency Varies: Some feed companies lean towards open formulation, but secrecy remains the norm. Internal expertise in digestibility modeling is a competitive advantage.

3. Regional Nuances Matter: Norway isn’t Chile, and Scotland isn’t Canada. Feed preferences, regulations, ingredient availability and local market conditions vary widely. Feed businesses must localize without losing scale economies.

4. Contract Risk Is Real: Feed contracts can represent tens of millions in liability and volatility. Price renegotiation clauses and ingredient cost pass-throughs must be scrutinized and quarterly price review mechanisms need to be robust.

5. Margin Expectations Should Be Tempered: Unlike salmon farming, which occasionally prints money, feed is a grinding business. Margins in the 5%–10% range are typical. Volume matters. Operational discipline matters more.

Final Thought: Feed Fatigue, Profit Priorities

Let’s be clear—Mowi didn’t build a feed empire because it loved raw material logistics or because it had a deep, soulful connection to extrusion technology. It did it to control costs, exert leverage, and box out suppliers. And it worked.

But now, they’re walking away—not because feed doesn’t work, but because it no longer flatters the narrative.

Potential buyers shouldn’t see this as a warning sign. They should see it as a clearance sale on a functioning, strategically underappreciated business.

Just don’t expect Mowi to admit that its big play has quietly become a rounding error on the salmon spreadsheet. Some exits are graceful. Others are just convenient.

Thanks for reading. And to my friends still negotiating feed contracts —may your crude protein estimates be ever in your favor. Comments can be made below, via Info@AlanWCook.com or LinkedIn.