The price isn’t right
Foodservice’s significance to U.S. seafood sales can’t be overstated. Last year, Americans spent USD 75.5 billion on seafood, two-thirds of which occurred at foodservice establishments. When consumers dine out, seafood sales benefit. When consumers stay home, seafood sales suffer.
Consider the past two years. In 2008, the U.S. economy took a turn for the worse. Consumers tightened their purse strings, eating out less frequently or spending less when they do. Seafood sales took a hit. Some seafood chains, such as Oceanaire Seafood Room, filed for Chapter 11 bankruptcy protection and were bought out, while others, such as Shells Seafood Restaurants, filed for Chapter 7 liquidation.
Now things are looking up. In September, 38 percent of the restaurants polled by the National Restaurant Association reported an increase in customer traffic from a year prior, compared to 35 percent in August, while 44 percent witnessed a jump in same-store sales, up from 38 percent in August.
But, when it comes to seafood, there’s more to the story than restaurant traffic and sales. Casual-dining heavyweights such as Ruby Tuesday and T.G.I. Friday's are featuring more seafood. But will they continue to do so if wholesale prices of a few key seafood species keep rising?
Farmed shrimp, Atlantic salmon and tilapia — three of America’s five favorite species — are considerably more expensive than a year ago, up USD 1 a pound or more. The economy may be improving, but Americans remain value conscious and restaurants are reluctant to increase menu prices.
While analyzing the results of this year’s SeaFood Business foodservice survey, I was surprised to find that less than one-quarter of restaurants are menuing more seafood than a year ago, compared to 32 percent of restaurants polled in 2008. If the industry’s outlook is far brighter now than in 2008 when the economy tanked, why aren’t more restaurants adding seafood to the menu?
The answer may lie with prices. It’ll be interesting to watch over the next year how much prices of key seafood species increase compared to prices of competing center-of-the-plate proteins such as beef and chicken.
This is one of many subjects I will address on 16 November as I present the results of the SeaFood Business foodservice survey during a 45-minute webinar. Joining me is Joseph Sabbagh, a longtime seafood consultant and president of Sax Maritime Associates in Los Angeles, who will participate in a question-and-answer session following the presentation.
To sign up for the webinar, click here. The webinar is open only to SeafoodSource premium members. Premium membership costs USD 95 a year, which gives users access to all webinars, market reports, audio, video and best-practice guides posted to SeafoodSource. Webinar participants will also receive a copy of the presentation following the webinar.
Hope to see you next Tuesday.