Inflation harming US seafood sales, but sales decline improves
Inflation continues to depress U.S. seafood sales, but the sales drop in October was less than in previous months.
Shelf-stable seafood prices soared 12.5 percent, while frozen seafood prices spiked 10.2 percent, and fresh seafood prices rose 4.2 percent. Fresh shellfish prices declined by 2.7 percent, according to new data from IRI and 210 Analytics.
“October seafood inflation showed some improvement over the past year. While prices still rose over prior year levels for all but fresh shellfish, the increases were much milder than those seen in the first half of 2022,” 210 Analytics Principal Anne-Marie Roerink told SeafoodSource.
Inflation in total frozen food and beverages has been trending above the store average for several months, so frozen seafood is not unique in that respect, according to Roerink.
However, total U.S. inflation cooled in October by more than was forecasted, with the consumer price index rising 7.7 percent over last October – the smallest increase since the beginning of 2022, according to the U.S. Bureau of Labor Statistics.
In addition, the food index rose by only 0.6 percent in October, compared to September.
Despite lower inflation increases, fresh and frozen seafood sales have suffered. Frozen and fresh seafood sales both dropped 3.4 percent in October, which is less than in previous months. Frozen seafood hit USD 627 million (EUR 603 million) in sales for the month, while fresh seafood sales reached USD 570 million (EUR 548 million).
On the other hand, ambient seafood sales grew 3.9 percent to USD 254 million (EUR 244 million).
The lighter drop in sales in fresh and frozen seafood could be attributed to comparing the data with last October, when seafood sales began to fall, “so the bar is set lower,” Roerink said.
An increase in social gatherings could also be shoring up seafood sales, according to Roerink.
“We are entering the season when people are starting to get together. People start to make a little more room in their budgets and [splurge] on the more celebratory meal,” Roerink said.
In fresh seafood, despite the inflationary boost, the unit and volume declines were “too deep to achieve dollar growth,” Roerink said. However, dollar and volume numbers rose in October compared with 2019.
Fresh crab, which had been priced too high for many shoppers earlier this year, realized a price drop of 7.7 percent on average in the third quarter, according to Roerink.
In October, crab volume rose nearly 18 percent over a year ago, while dollars were flat.
“The more favorable prices for consumers led them to buy 18 percent more pounds of fresh crabs. This is an interesting finding. We have long linked the decline in seafood purchases this year to inflation,” Roerink said. “The crab case study seems to suggest that if we can get prices under control … fresh seafood demand may bounce back.”
Another way grocers can boost fresh seafood sales is to present the overall value seafood presents, according to Roerink.
“Seafood has always been positioned as being premium, right along with that premium beef item, so the consumer perception is, if I need to save money to feed my family [reduce seafood purchases]," she said.
However, she said there are plenty of seafood options that compete favorably in price with other protein options, and seafood can be presented as a value proposition when it is part of the total meal.
Roerink said Wegmans is an example of a retailer that effectively presents the value of a total meal – such as chicken, fresh mushrooms, pasta, and pasta sauce – that can feed a family of four for a set amount, such as USD 3.25 (EUR 3.14) per person. Retailers can present the same type of value with seafood meals, Roerink said.
While nearly all fresh seafood species declined in sales in October, salmon sales rose 2.9 percent, and tilapia sales were up 4.3 percent. Roerink attributes continued strong salmon sales to Americans’ comfortability with cooking and eating the fish.
“Salmon is the powerhouse during typical and atypical times anyhow, but we have to keep in mind that there is enormous pressure on income right now for many Americans. That means the last thing people want to do is buy something and have buyers’ remorse because they ended up not liking the taste, not quite knowing how to prepare it, etcetera,” Roerink said. “This is where salmon comes in. With among the highest household penetration of all seafood offerings, there is a lot more familiarity with salmon than some of the other species.”
In addition, the salmon industry “has done a fantastic job in highlighting its powerful delivery of health and wellness attributes as well as sustainability,” Roerink said.
Photo courtesy of Zety Akhzar/Shutterstock