Flood of cheap shrimp fueling retail, restaurant promotions
Thanks to lower prices and increased availability, United States restaurants and retailers have stepped up their shrimp promotions.
Since February, distributors, retailers, and restaurants report a 10 to 15 percent drop in shrimp prices due to increased production in India and Asia.
“We are seeing these lower prices due to increased production, especially from India and Indonesia,” Jeff Goldberg, president of Fortune Imports, told SeafoodSource. “Through the first four months of 2018, imports were up 13.2 percent.”
Since February, wholesale shrimp prices have dropped around USD 1.00 (EUR 0.86) per pound, and around USD 2.00 (EUR 1.71) per pound over the past two years, William Bradford, marketing and communications manager for distributor Samuels & Son, told SeafoodSource.
Richardson, Texas-based Rockfish Seafood Grill has realized a price drop of 19 percent on its 21/25s shell-on shrimp from Asia since February, and a 10 percent decline on 51/60s peeled and deveined, tail-off shrimp.
As a result, the 11-unit restaurant chain was able to change the portion size on many of its shrimp dishes, and increase the frequency of its USD 7.99 (EUR 6.84) “peel-and-eat” shrimp promotion. The special – a dozen shrimp plus corn on the cob and potatoes – is offered once a month.
“We added additional shrimp to the Mexican Shrimp Cocktail and Volcano Shrimp appetizers, plus the Shrimp and Grits entrée,” Virginia Pivonka, director of procurement and marketing for Rockfish, told SeafoodSource.
Similarly, Malvern, Pennsylvania-based Acme Markets has seen wholesale shrimp prices decline around USD 0.50 (EUR 0.43) per pound since February 2018.
“It’s the lowest cost we have seen in years. It is not only great for retailers, but it is also great for customers,” Charles Bell, assistant sales manager for meat and seafood at the 175-store chain, told SeafoodSource.
As a result, Acme promotes 21/25s farmed shrimp for as low as USD 5.99 (EUR 5.13) per pound in two-pound bags. The chain is currently promoting four-pound bags of 21/25s for USD 4.99 (EUR 4.27) a pound. Acme has also priced 26/30s for USD 15.00 (EUR 12.83) per pound for a 10-pound bag, for a two-week period.
“We are seeing increases in sales of raw shrimp 10 to 15 percent compared to last year,” Bell said. “Everyone knows what the cost of the king crab market is. We had to find the sales somewhere else.”
However, Bell does not expect the shrimp price to continue its decline.
“Pricing has leveled off,” he said. “I don’t think it will get any lower, and it will likely start to creep up a little bit.”
Goldberg, of Fortune Imports, agreed with Bell’s assessment.
“Prices overseas are showing signs of strengthening due to the large orders being placed by the restaurants chains, but also because the retailers have stepped in and placed their orders for the fourth quarter of 2018,” he said.
However, “It will take a while for prices to increase here as many importers are holding large quantities of product and need to continue to sell it off so that it can be replaced with lower prices inventory,” Goldberg added.
Meanwhile, lower domestic wild shrimp prices in the U.S. have also led to increased promotions of the shellfish. Acme, which carries both private label and Open Nature wild shrimp, is promoting 21/25s for as low as USD 8.99 (EUR 7.70) per pound.
“There are still people who will only eat wild shrimp. That price is not as positive for us, but it’s at a good price right now,” Bell said.
Currently, Rockfish is not featuring any wild U.S. shrimp on its menu.
“We look at it each fall when the season is underway and decide whether or not to go with wild or farmed 21/25s gutted, headed shrimp for the year,” Pivonka said. "Last October, when we had to make our decision, the wild shrimp price was USD 0.95 [EUR 0.81] per pound higher than the farmed shrimp. With that kind of price spread on our volume, we had to go with the farmed.”
Photo courtesy of Fortune Imports