Concerns mount over rising US seafood prices
Rising seafood prices due to inflation continue to cause concern among the entire industry, including retail and foodservice buyers.
Frozen seafood prices experienced the biggest gain in the second quarter of this year – up 9.2 percent versus the same quarter in 2019 to USD 6.96 (EUR 5.95) per pound on average in U.S. grocery stores and mass retailers, according to IRI and 210 Analytics. Frozen prices also grew 3.2 percent in the quarter versus 2020.
Frozen seafood products saw the biggest price hike from the first quarter to the second quarter of this year, jumping 5.6 percent, while shelf-stable seafood prices rose 3.3 percent and fresh prices were up 2 percent. Fresh seafood prices also soared 8 percent in the second quarter of 2021 versus 2019 and 4.1 percent versus the same quarter in 2020 to reach USD 8.40 (EUR 7.14) per pound on average.
Shelf-stable seafood prices rose 4.4 percent in the second quarter of 2021 versus the second quarter of 2019 but fell 0.3 percent compared to 2020. The average price for the second quarter of this year was USD 4.88 (EUR 4.15) per pound.
“Very few products are not going up in price,” Santa Monica Seafood President and CEO Roger O’Brien told SeafoodSource.
The price inflation in the distributor, processor, and foodservice operator’s sales to foodservice customers alone was a “whopping 29 percent” in June, O’Brien said.
The tight supply chain for many seafood products has forced Santa Monica Seafood to take on significantly larger frozen inventory than it normally would to ensure sufficient product to meet its customers’ needs.
“Frequent communications with our vendor partners and vendor managed inventories have also become the norm during these tight supply times,” O’Brien said.
Santa Monica Seafood is trying to “control and reduce its costs where we can and take advantage of our volume buying strength to keep price increases to a minimum for our customers,” O’Brien noted.
“We’re watching what our competitors are doing with their pricing and we’re trying to ensure our cost increases are not temporary in nature before passing them on,” he said.
The foodservice recovery has created a surge in orders from restaurants on top of the increased orders from retail, leading to tight supply and increased prices, O’Brien said. Species with the highest price increases this year include king crab, snow crab, blue swimming crab, large domestic scallops, North Atlantic lobster, Chilean seabass, farmed Chilean Atlantic salmon, yellowfin tuna, and pangasius, according to O’Brien.
“We’ve all heard how restaurant customers are enjoying going out to eat again, but they all have stories of how large their restaurant tabs are compared to pre-pandemic days,” O’Brien told SeafoodSource. “Consumers will continue to go out to eat since they have such pent-up demand for high quality restaurant food and getting out of their houses to eat at a nice restaurant, and they’ve saved a lot of spending money with almost no travel or vacation activity for the past year, plus. But the time will come when they will refuse to pay the super-high restaurant tabs.”
The price hikes are due to logistical challenges, high consumer demand, labor shortages, and supply issues, Samuels & Son Seafood CEO Sam D’Angelo told SeafoodSource. D’Angelo’s company has seen the most-significant price hikes on squid, lobster, Chilean sea bass, and crabmeat.
Lobster boat prices have reached record prices this summer, driving some restaurants to shy away from carrying the product to avoid sticker shock for customers. Boat prices have climbed well north of USD 6.00 (EUR 5.08) per pound when the price is typically around USD 4.00 (EUR 3.39) per pound, the Lewiston Sun-Journal reported. Some restaurants interviewed by the newspaper confessed to removing lobster from menus to avoid charging an exorbitant amount of money for the product.
The price hikes are also hitting retail, 210 Analytics Principal Anne-Marie Roerink told SeafoodSource.
“The entire grocery supply chain, including seafood, is dealing with cost increases every step of the way,” she said.
While the price of many species is soaring, shrimp and salmon prices have remained fairly steady, Roerink said.
“Powerhouse salmon is a notable exception to the increases in seafood prices, in part due to being more frequently promoted,” Roerink said.
Prices have remained steady at USD 9.25 [EUR 7.87] to 9.30 [EUR 7.91] per pound on average for several years.
Complications involving transportation are causing logistical headaches and higher prices for seafood companies, according to Roerink, with costs doubling or tripling in some cases.
“Add to that, issues in finding and keeping labor, increased costs in supplies, such as packaging, labels, pallets, etc., and I doubt that the inflation seen at the store is even keeping up with the cost increases incurred throughout the production process,” Roerink said.
Photo courtesy of Samuels & Son Seafood