While fresh seafood sales spiked in 2021, the outlook for the rest of 2022 is uncertain with inflation and supply chain pressures.
Fresh seafood sales rose 4% in 2021 compared to 2020 and 30.8% versus 2019, reaching a record $7.1 billion, according to IRI and 210 Analytics.
“Fresh and frozen seafood retail sales reached new records in 2021, boosted by robust demand as well as inflation,” 210 Analytics Principal Anne-Marie Roerink said.
Fresh finfish sales climbed 6.4% in 2021 versus 2020 and soared 25.5% versus 2019. Fresh shellfish sales rose .5%versus 2020 and 37.6% versus 2019.
However, supermarket buyers and analysts are concerned about inflation’s impact on seafood sales this year. Food-at-home prices soared 7.4% over the past year in January, and 1% compared to December, according to US Bureau of Labor Statistics Consumer Price Index (CPI) data.
Already in January, fresh seafood sales dropped 7.3% for the first four weeks of the month, while units fell 16.3% and volume dropped 15.9%, according to IRI and 210 Analytics.
“The first four weeks were a bit of a struggle. We are now going up against the two biggest years in grocery retailing ever,” Roerink said.
However, sales of seafood trays soared 85.9%, while seafood salad sales jumped 25%, salmon rose 7.8% and smoked salmon was up 3.2%.
“Several of these items are up in units and volume as well, indicating growth beyond inflation. Most fit two themes: easy entertaining and ease of preparation,” Roerink said.
Inflation is still a complete unknown this year, said Shawn Oliver, seafood category manager for Giant Eagle. Oliver said he cannot predict whether fresh seafood sales will continue to grow this year, as it “really depends on the pricing.”
While luxury items like crab and lobster have been priced very high over the last year, farmed salmon and shrimp prices remained fairly steady. But that may be changing this year.
Chilean farmed salmon prices have risen around 15% since the start of the year, due to a massive algae bloom, said Oliver, who expects prices to continue to rise through March.
“Due to a lack of supply in the market, it is also driving up the cost of Canadian Atlantic salmon,” Oliver said.
Roger O’Brien, president and CEO of distributor, retailer, and cafe operator Santa Monica Seafood, said the company’s executives “definitely see high inflation continuing throughout 2022.”
The spread of the omicron variant of COVID-19 also threatens to worsen shortages of labor and supplies which, in turn, will only drive an increase in consumer-price inflation, O’Brien said.
“And we’ve already learned this year that restaurants, and even grocery retailers, will remove various seafood items from their menus and shelves if the prices get too high,” O’Brien said. "Luckily for seafood, the increase in prices for meats and other proteins is worse than it has been for seafood.”
Roerink expects continued inflation across all grocery categories, not just seafood.
“I’m not a supply chain expert, but across categories, those who are tell me that there is no immediate end in sight,” Roerink said. “One factor, COVID, is impossible to predict and an added layer on uncertainty.”
Inflation “puts more pressure on the purchase, but with fresh seafood buyers being higher income, perhaps that will help with having a bit less economic pressure,” Roerink added.
Plus, inflation for seafood is not outpacing that of other meal ingredient or center-of-plate proteins.
“Now is the time to press harder on health, convenience, availability and confidence, and — if possible — promotions to drive trial,” Roerink said.
Roerink also notes the continuing trend of preparing seafood at home, along with “continued strength in convenience and entertaining, such as value-added, seafood platters, etc.”
During times of high inflation, frozen food sales typically strengthen, “so I wouldn’t be surprised to see more mixing and matching of fresh and frozen,” Roerink said.
Key to boosting sales this year will be carrying a variety of species, including lesser-known species, and passing savings on to shoppers, according to Oliver.
“I’m still looking [for those lesser-known species]. During the pandemic, it was easy. There were a lot of products accessible at really cheap prices for retail, but I have not seen that recently,” Oliver said.
However, Giant Eagle is testing Greenland turbot, which is very similar to halibut but is around half the price, in some of its stores. It is too early to determine customer response to the fish, Oliver noted.
In addition, due to higher prices on walleye and US ocean perch, Giant Eagle is looking into European lake fish options such as European lake perch and zander.