Fresh seafood sales plunged in early spring due to rising inflation — primarily impacting crab, lobster, tilapia and catfish. Still, there are some bright spots in the department, including an uptick in sales of salmon, trout, seafood salads and other items.
Fresh seafood prices rose an average of 12.1% to $8.51 per unit in March 2022 versus a year ago, more than the 10.9% increase in February, according to IRI and 210 Analytics.
The higher prices led to a 10.4% decline in fresh seafood sales to $505 million in March, primarily impacting fresh shellfish sales, which realized a significant 27.8% decline in sales. Crab (-34%), lobster (-27%), tilapia (21.6%), and catfish (16.4%) realized the biggest sales drops in sales in March.
Inflation has hampered sales in all categories across grocery stores — including fresh seafood, said Shawn Oliver, seafood category manager at Pittsburgh-based Giant Eagle.
“It looks like people are cutting back in general, store-wide,” he said.
As a result, overall fresh seafood sales have declined slightly, according to Oliver.
The sales drops in crab and lobster reflect the impacts of inflation on the cost of goods in general, including non-food luxury items, Oliver noted. In addition, “We had government-subsidized funds going into the economy at this time last year; people don’t have the extra money to afford the luxury items [this year].”
The plunge in crab sales is also likely linked to a decrease in purchases of seafood from Russia, amid United States sanctions against the country over its invasion of Ukraine.
Russia is the fifth largest producer of wild caught fish and the world leader in cod exports, according to the United Nations Food and Agricultural Organization. US retail and foodservice chains reportedly buy a majority of their snow crab, king crab and pollock from Russia.
Major food companies have stopped doing business in and with Russia since the Ukraine invasion, and restaurant chains have pledged not to purchase seafood from the country. Retailers, heavily reliant on crab and pollock, may not be able to back out of the country as easily.
In Giant Eagle’s case, executives “made the decision we are done with Russia crab as soon as they attacked Ukraine,” Oliver said. The retailer was previously buying all of its king crab and around 50% of its snow crab from Russia.
Giant Eagle had some crab in reserves and it switched to purchasing snow crab from Canada. “The good thing is the quotas were increased from last year, so the prices actually came down on snow crab,” Oliver noted. King crab prices, meanwhile, “are through the roof — at least 50% higher than two years ago.”
Seafood prices may spike further amid Russian sanctions, with particular impact on crab, cod and Alaskan pollock, according to 210 Analytics Principal Anne-Marie Roerink.
The tilapia price conundrum
While tilapia sales dropped significantly in March and over the last year, that is primarily the result of inflation on Asian tilapia, with wholesale prices on frozen imported tilapia from Asia rising 100% over the last two years, according to Oliver.
However, that price inflation led Giant Eagle to carry more “high quality” tilapia that is also closer to the US and is not facing the same transportation costs as seafood from Asia, according to Oliver. It increased SKUs of Miramar, Fla.-based Regal Springs’ tilapia, which are raised in deepwater pens in lakes in Honduras and Mexico, as well as the Indonesian ‘Ring of Fire’ in Lake Toba.
Differentiating its premium product, Regal Springs said on its website that, “Our tilapia race and dart against currents in deepwater pens, building a firm and healthy body, not like fish reared in shallow muddy waters, which just taint their flesh.”
The supplier has obtained both Aquaculture Stewardship Council (ASC) certification and Better Aquaculture Practices (BAP) certification for its fish.
The “premium” tilapia has been moving very well at Giant Eagle and is now the highest percentage growth item in the seafood department, according to Oliver.
“We have been given an opportunity to promote it for several months and will promote throughout summer. It has been moving very well for us and will continue to move well.”
Although “cheaper” products have increased in price and sales have declined, sales on certain premium seafood items, such as Regal Springs tilapia, are rising.
“I think you will find the premium products are greatly increasing as they are becoming more affordable,” Oliver said.
More tilapia will also be available eventually, as US-based aquaculture firm Fishin’ Company said it will invest ₹1,000 crore in India to establish a fully integrated freshwater fish culture ecosystem including hatcheries, feed manufacturing, cage culture, processing and exports.
The massive facility is expected to produce 85,000 tons of tilapia annually.
Salmon, trout make headway
Despite the decline in sales of certain fish and shellfish, there are bright spots, as salmon sales continue to soar (up 9.9% in March), along with flounder and trout.
Trout realized a sales hike of 1.1% in March and 4.6% over the last year.
Giant Eagle has realized an increase in trout sales, according to Oliver. While prices are up slightly due to inflation, the fish is still competitively priced and continues to produce strong sales, according to Oliver.
“In the last year, it [trout] has definitely increased in sales,” said Todd English, vice president of sustainability for Boise, Idaho-based sustainable trout producer Riverence, which is backed by Hollywood producer David E. Kelley. “People are starting to realize you can get the same health benefits as eating other types of seafood, and it is a local USA product, which is a big thing for consumers.”
As the cost of transporting salmon and other seafood from foreign countries rises, Riverence also has the advantage of having its own tractor trailer fleet, delivering to more than 90 fish houses twice weekly in most major US cities and Canada, according to English.
During COVID-19, consumers have recognized the need to eat healthier food, which benefits trout sales, English said.
“When people are looking to a healthier alternative to any other land-based protein, trout offers all those benefits at a price point that is key for consumers.”
Riverence is partnering with Elk Ridge, Md.-based Clean Label Gourmet Foods to provide shrimp, salmon and, eventually, trout for Clean Label’s ready-to-microwave and ready-to cook meals.
The vacuum-sealed frozen and refrigerated seafood meals contain only a few ingredients, and zero additives and preservatives, according to English. The meals, which retail for a suggested $8.99-$9.99 each, include four different flavors and will be expanding.
Using a unique technology, Clean Label vacuum seals the tray and then pressurized it at extremely high pressure, which inactive bacteria and viruses, according to English. As a result, the shelf life on the meals is two years frozen and 45 days refrigerated.
Publix has carried the meals for a few months, and Clean Label is talking with other grocery chains about carrying the line.
While salmon volume declined 2.5% in March, sales jumped 9.1%, according to IRI and 210 Analytics. “In comparison to the double-digit declines for crab, shrimp, lobster, catfish, tilapia and seafood cakes, salmon’s performance was solid,” Roerink noted.
Farmed salmon prices soared at the beginning of this year due to algae blooms in Chile, but Oliver noted that the price is “starting to slowly back off now.”
The only top 10 fresh seafood seller with positive volume growth was seafood salad, rising 5.8%.
“Smoked salmon and seafood salad have done very well amid an overall strong trend in items related to entertaining,” Roerink said.