Seafood sales spike for UK foodservice channels, offset declining retail numbers

Published on
June 27, 2016

Over the last two years, the United Kingdom has seen a strong resurgence in its eating out of home (OOH) consumption, which has been buoyed by solid GDP growth and the considerable diversity that now exists in the country’s restaurant scene. Finally, it seems seafood has started to benefit from this foodservice upswing with spend and the number of servings up this year. Seafood is also growing faster than other proteins.

For many years, seafood has missed out to chicken and beef when it comes to U.K. consumers ordering their center-plate proteins, mainly slipping down the pecking order because of a lack of innovation, uninspiring menu listings and a high price perception. At the same time, there’s been a slow but steady decrease in the seafood volumes being sold across retail – down 0.9 percent last year to 331,151 metric tons (MT) with a value of GBP 3.1 billion (USD 4.6 billion, EUR 4 billion), a decline of 0.6 percent.

Offsetting this decline, commercial OOH seafood consumption increased in value by 1 percent to GBP 3.2 billion (USD 4.7 billion, EUR 4.2 billion) in 2015 with the total number of seafood servings up 3.8 percent to 993.6 million. And the latest foodservice quarterly report prepared by the NPD Group Inc. on behalf of the U.K. Seafish Authority confirms the welcome upturn in OOH seafood consumption has continued into 2016.

Across the overall foodservice sector, consumers increased their spend by 3 percent or an additional GBP 398 million (USD 587.4 million, EUR 518.1 million) year-on-year in the first-quarter of 2016. This growth was driven by a healthy mix of both traffic and average check increases, which were up 1.5 percent and 1.7 percent, respectively.

According to the report, the total OOH spend for the 12 months that ended March 2016 was GBP 52.6 billion (USD 77.6 million, EUR 68.5 million), an increase of 3 percent year-on-year, based on 11.2 billion visits (up 1.5 percent). Crucially, the number of seafood servings increased 1.4 percent to 988.6 million servings.

Seafood growth was largely driven by the quick service restaurant (QSR) sector excluding fish and chip shops, which achieved sales of GBP 19.8 billion (USD 29.2 billion, EUR 25.8 million) in the 12-month period, a 4 percent rise year-on-year. The number of visits in QSR increased 2.4 percent to 5.4 billion and the number of servings grew 12.6 percent to 292.9 million.

Despite the overall increase, seafood deal rates are still fewer than with other proteins and declining. Furthermore, NPD’s data finds that younger generations continue to find seafood – particularly shellfish – less appealing than older consumers and so the challenge remains developing products that are attractive to the former demographic.

Significantly, while seafood dishes remain relatively expensive, prices are slowly falling. For the 12 months that ended March 2016, the average spend per seafood dish was GBP 6.24 (USD 9.21, EUR 8.12), down GBP 0.06 (USD 0.09, EUR 0.08) year-on-year but still well above the average for protein during the period, which was GBP 5.56 (USD 8.21, EUR 7.24), up GBP 0.03 (USD 0.04, EUR 0.04). Only beef and lamb had higher price points than seafood at GBP 6.53 (USD 9.64, EUR 8.50) and GBP 11.29 (USD 16.66, EUR 14.69) per serving, respectively.

In terms of product formats, fried fish dominated OOH seafood consumption with a 36.8 percent market share, followed by fish sandwiches (19.9 percent), shellfish (15.9 percent) and seafood sandwiches (10.2 percent).

In QSR, the average individual spend on seafood in Q1 was GBP 3.75 (USD 5.53, EUR 4.88), up GBP 0.10 (USD 0.15, EUR 0.13) year-on-year and lower than the average for protein at GBP 3.90 (USD 5.76, EUR 5.08), up GBP 0.04 (USD 0.06, EUR 0.05). Within this category, only pork was cheaper at GBP 3.28 (USD 4.84, EUR 4.27) per spend.

Meanwhile, the iconic fish and chip shop channel experienced its second consecutive positive quarter, but the actual number of seafood servings fell by 7.2 percent or 969,000 to 168.3 million for the year, showing that businesses are increasingly diversifying into other product areas.

The spend in fish and chips for the year totaled GBP 1.1 billion (USD 1.6 billion, EUR 1.4 billion), up 0.7 percent, and the average individual spend on seafood increased GBP 0.22 (USD 0.32, EUR 0.29) year-on-year to GBP 3.82 (USD 5.64, EUR 4.97), compared with an average of GBP 3.64 (USD 5.37, EUR 4.74).

NPD’s data also confirmed a continued decline in seafood servings in the full service restaurant (FSR) channel in spite of strong and stable growth in the channel, and despite fish being a “perfect fit” in this area. The number of seafood servings in FSR fell 4.7 percent to 126.6 million, while the total spend in the channel grew 3.8 percent to GBP 20.8 billion (USD 30.7 billion, EUR 27.1 billion) and the number of visits increased 2.6 percent to 1 billion.

However, NPD and Seafish believe there is plenty of scope, especially through QSR and FSR, to create the right offering to boost the popularity of seafood, which would in turn help sustain the positive growth trends currently being seen in the market.

Contributing Editor reporting from London, UK

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