Icelandic venture seeks value in cod byproducts

By  SeafoodSource,     Jason Holland

As wild capture fisheries are a finite resource, an essential part of sustainability is ensuring that the seafood economy utilizes as much of each fish that is commercially caught as possible. In the case of cod, which is one of the world’s most popular and plentiful whitefish species, there is as much as 50 to 60 percent of the biomass remaining after filleting, which, if you are processing large volumes of it, results in a lot of byproduct.

Fortunately, Icelandic whitefish companies have found that there is no shortage of outlets for many cod byproducts. A lot of trimmings go to fishmeal production; fish oil is very valuable to the supplement sector; dried heads and backbones are a delicacy in markets like Nigeria; and further proving that there’s much more value in cod than just the loin, one venture is now aiming to optimize the value of cod skin by turning it into collagen powder.

Cod is an iconic species in Iceland – it is caught in large quantities and exported to many markets, but cod skin is underutilized, explained Davíð Tómas Davíðsson, research and development manager for Codland.

“Very little is done with the skin. It is basically thrown away – either by the processor when they are portioning or by the consumer when they are at home making dinner. If any is sold, it’s at a very low price for feeds, and in Iceland, we have large quantities of it,” Davíðsson said. “However, something that has been getting very popular is active ingredients, specifically bioactive collagen peptides, and that is what we are doing with it. It has a very beneficial effect on the joints, reducing pain and smoothing the skin. Basically, people are getting older and they want to maintain an active lifestyle. That’s why the market is seeing this strong ‘beauty from within’ trend, where we are all eating for better health. Collagen is a convenient tool for people who want a little extra help.”

Codland was founded in 2012 when the Iceland Ocean Cluster brought together seven fishing and ocean-related companies to look at creating maximum value from every part of the fish. These companies wanted people to research the raw material and to also understand the byproduct market in order to achieve the best margins possible. Indeed, Codland’s founding owners – fishing companies Visir and Þorbjörn, along with the fish drying firm Haustak – had already been through a 10-year development process, learning how to properly handle, sort, and create consistent quality from highly perishable fish byproducts.

“They understood that developing valuable products from new raw materials can take a long time, but they were willing to make the investment, which was very important for us,” Davíðsson said.

Codland’s largest project to date is using the cod skin, which though 80 percent water is also 17 percent valuable collagen.

“The market for collagen is quite sophisticated because it is usually incorporated into other foods,” Davíðsson said. “Consumers also want it in a very convenient format so we will be selling the powder in bulk and mostly to producers of functional foods and drinks.”

Davíðsson acknowledged that while you can also make collagen from mammal skin, cod collagen is regarded as high-end and products in that space cannot have connections to factory or battery farming, poor animal welfare, or hormone or antibiotic use. Consequently, the product will seek a raw material price of EUR 15 to 20 (USD 17.50 to 23.33) per kg.

“All we are using is wild fish that are caught from sustainable stocks. And, because we are in Iceland, we are using green energy to produce it,” he said.

As well as having a finalized product, Codland has also managed to secure the support of some of Iceland’s biggest fishing companies, including HB Grandi and Samherji.

“They are actually working together to start this plan, and collaborations between such competitors are not usual in Iceland,” said Davíðsson. “It’s like this plan is coming from the industry itself – to find a large-scale use for the fish skins.”

To begin with, Codland is aiming to use 4,000 metric tons (MT) of cod skins, which will create 400 MT of collagen annually. This is quite a modest output, representing about a month’s bovine or swine collagen production, but because skin is a much smaller percentage of the overall fish (about three percent) than with these land animals, Davíðsson estimates that almost 130,000 MT of cod will be required to reach the target level, which is the lion’s share of the country’s annual cod catch.

“In the beginning, it will only be cod. But later on, as we get used to the systems and procedures and have everything running smoothly, we may look to other species,” he said.

Essentially, the new company, called Collagen ehf, will be a highly automated collagen producing factory and the four fishing/processing companies of Visir, Þorbjörn, HB Grandi and Samherji will be partner-owners, and each will supply a volume of cod skins. There will also be a technical partnership with Spanish collagen company Juncá Gelatines, which Codland’s owners have been working with for a number of years.

Codland’s role will be to manage the production and selling of the product.

With a site for the plant selected in Reykenes and the equipment already decided upon, Davíðsson anticipates that with contract agreements soon to be finalized, the business will be up and running and supplying collagen powder before winter 2018.

Sales will begin with Europe, supported by the revenue channels already established by Codland’s owners, and then Davíðsson hopes to tap into the “difficult to break” Japanese market.

“The collagen trend has been growing very quickly again since about 2010. People have been coming back to it, especially in Asia,” he said. “We will make a big push when we have the plant up and running.”

Also at the Reykenes location, but in a separate facility, Codland is working with partners on other byproducts, including the utilization of fish livers, bones, and innards.

“This will create a lot of synergy,” he said. “Just processing all the different raw materials in one place creates interesting opportunities to use the different value streams and combining them to further upgrade the raw material.”