Quality, value-added seafood products lead U.S. retail sales growth

Published on
March 24, 2015

Thanks to the rebound of the U.S. economy — along with supermarkets stepping up their fresh seafood merchandising, sourcing and education — fresh seafood retail sales are on the rise. Effective promotions, value-added seafood products, smaller package sizes and shoppers’ increasing demand for wild domestic seafood are other trends fueling U.S. seafood department sales, according to a new survey.

Nearly 60 percent of supermarket seafood departments reported sales gains for the 12 months ending November 2014, a gain of 4 percent, according to Progressive Grocer’s recent “2015 Retail Seafood Report.” In addition, 70 percent of supermarket seafood executives surveyed said they expect even higher sales this year.

“The biggest reason consumers are buying more fresh seafood is that the quality is improving,” said Brian Harbach, seafood category manager for Greensboro, N.C.-based The Fresh Market, which operates 158 stores.

“Supermarkets and wholesale clubs are sourcing better product, are more quality-conscious and are educating their staff better,” agreed Steve Gyland, owner of West Palm Beach, Fla.-based Cod and Capers Seafood Market.

Shoppers are getting more comfortable buying farmed fish, for example, because of the improvements suppliers have made in product quality, according to Harbach. The retailer’s farmed salmon supplier is working towards Aquaculture Stewardship Council (ASC) certification, giving the product sustainability credibility. “Overall, there are a lot of positive opinions out there, including [farmed fish’s] sustainability and the price points more attractive than wild. Having that good story to go along with [ASC certification] helps the customer as well.”

In addition to grocery chains, Cod and Capers and many other independent seafood markets have seen a spike in sales over the past year. Cod and Capers’ turnover increased around 12 percent last year, partly due to its move to a new location with more than 8,600 square feet, which includes a foodservice component.

Lower commodity costs on certain species are also spurring seafood department sales. Gyland noted as much as a 40 percent decline in the store’s salmon costs, which he attributes to Russia’s import sanctions. “Much of the Norwegian, Irish and Scottish salmon is at price points that are 30 percent to 40 percent better than in 2013,” he said. Other retailers say the record wild Alaskan salmon run last season allowed them to offer discounts and boost sales.

Prices and availability for farmed salmon have improved in recent months, according to Harbach. “Even during Lent, when there can be more demand, the supply chain crunches have not been there.” Likewise, the increased availability of cod in recent months is pushing many retailers’ sales and promotions of the fish. In November and January, The Fresh Market offered cod for USD 6.99 (EUR 6.38) on Saturdays only. Similarly, it is offering cod for USD 7.99 (EUR 7.30) every Friday during Lent.

Consumers’ increasing demand for wild seafood, smaller pack sizes and value-added items have fueled growth in fresh seafood departments, according to the Progressive Grocer report. Sixty-eight percent of those surveyed said that smaller portions/pack sizes were one of the primary drivers to the department, while 43.2 percent said value-added seafood was one of the most important drivers over the past year.

“Value-added is a big portion of our business,” Harbach said. “Convenience is so important to customers. When they are able to grab something with specific cooking institutions on it, our department becomes more convenient to them.” In recent months, The Fresh Market has added several value-added items such as tuna poke and sashimi and ready-to-cook items like herb and garlic flounder and rosemary grilling shrimp.

While consumers are buying more of both wild and farmed seafood, 45.5 percent of retail seafood executives surveyed noted an increase in demand for wild domestic seafood versus 37.5 percent who said there is more demand for imported farmed seafood and 29.5 percent who said there is more demand for U.S. farm-raised seafood. Meanwhile, around 20.5 percent said shoppers are asking for more imported wild seafood.

However, Gyland has not noticed more demand for wild than farmed seafood. “If there is a trend toward wild, maybe people are not educating their guests and instead trying to cater to what they see as a demand for wild. There is so much good farmed product out there.” When shoppers express concerns about farmed fish, like whether the flesh is dyed or not, Cod and Capers staff talks with them and explain the true facts about farmed seafood. They also hand out cards detailing what farmed salmon is fed and that it gets its color from a naturally occurring compound added to its feed.

“People are buying the same — if not more — farmed seafood,” Harbach said. “There are always going to be the folks who don’t want to eat a farmed fish but there are a lot of companies doing a lot on their own to work with different NGOs and improve. We are making it better for people who have might have hesitation to have more positive feelings.”

In addition to one-day sales events like The Fresh Market conducts, the retailers surveyed have found success with sampling events, in-store radio ads, three-day specials and themed events. Cross-promotions with other categories in the form of bundled family recipe meals are also spurring seafood department sales, the executives said.

“The biggest challenge with seafood is people’s fear of cooking it and the expense can be a little scary too. Promotions allow people to try it,” Harbach said.

Contributing Editor



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