Parallel proteins

Published on
October 17, 2012

Seafood retailers have become experts at adapting their business to the changing economy. Over the past three years, they have slashed costs, increased the value of what they are offering and focused on purchasing fresh, quality seafood.

These traits should help supermarket seafood departments and fish markets compete as commodity and fuel prices rise again this fall. The U.S. drought this year significantly impacted crops such as corn and soybeans, so beef and poultry prices are expected to rise as a result. Higher fuel and transportation costs are also expected to wreak havoc on wholesale seafood prices. Overall wholesale food prices have risen 1.4 percent in the past 12 months, according to the Bureau of Labor Statistics, and are expected to increase 2.5 to 3.5 percent through the end of the year, according to U.S. Department of Agriculture estimates.

Fortunately, seafood retailers that have remained competitive on price and offerings will be able to show shoppers that seafood is a better value than meat in some cases — and is also a healthier option.

“With beef prices going up, seafood becomes a more cost-effective alternative. We have all kinds of options that are less expensive,” says Dan Humphrey, seafood director for Highland Park, Ill.-based Sunset Foods, which operates five stores. However, instead of competing with chains such as Walmart on price, the upscale retailer has found success with sourcing quality seafood and training its employees on how to talk to shoppers about seafood.

“We need to be like the old-time fish market. We are selling quality and knowledge and we have a very educated clientele,” says Humphrey. Sunset sources directly from family fisheries and recently started a Gulf seafood program. “After the BP oil spill, we backed off from anything from the Gulf because of people’s perceptions. Now we are getting back into it with snapper, grouper, swordfish and tuna,” says Humphrey.

Lawrence Duplantis, the meat, seafood and deli director for New Orleans-based Robert Fresh Market, which operates three stores, agrees that shoppers may look to seafood as meat prices rise this year. “With the rising beef prices, people will come looking for a better value, so they may look at species like catfish and tilapia,” says Duplantis.

Still, Robert Fresh Market has faced rising wholesale seafood costs and pressure on margins, like most other seafood retailers. “There has been some softening on our margins because of the crazy market where we are at,” says Duplantis. For example, farmed crawfish is priced around 40 percent higher this season than last, but Robert Fresh Market had to keep its prices low to compete with several supermarkets and supercenters in New Orleans.

Click here to read the full story which ran in the October issues of SeaFood Business >

Contributing Editor

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