Retailers predict buoyant seafood sales this year

Published on
March 27, 2017

A new survey by U.S. magazine Progressive Grocer, shows more than half of American retailers in a buoyant mood, with 55.8 percent predicting an upturn in seafood sales this year. A further 40.4 percent believe sales will remain at the same level as 2016.

The 2017 Retail Seafood Review, which interviewed supermarket seafood executives for its annual state-of-category report, found just 3.8 percent of people anticipating a downturn in sales and profits. However, it noted that this uncertainty had not been expressed in the previous year’s poll.

Over the past year, actual performance in the seafood category saw 39.2 percent of respondents experiencing a rise in sales, 52.9 percent reporting no change and 7.8 percent noting a decline.

Shrimp was the driving factor in terms of volume sales during the year, largely thanks to an 8.9 percent drop in retail prices, according to Nielsen. Crustaceans in general showed both high volume and value increases compared to the previous year.

Overall sales were lower than expected, and Bridget Goldschmidt, reporting in Progressive Grocer, questions whether a basic lack of consumer knowledge about seafood is playing a role. Nielsen itself notes that “consistent consumer education concerning seafood’s benefits and preparation is a hurdle to clear” in growing category sales.

Goldschmidt, reported that one key reason cited by respondents for slow sales is price, although there remains a loyal segment of customers willing to pay more for seafood they deem to be superior. This is more noticeable with “home-grown” product originating from Alaska, Canada and the Gulf of Mexico.

In fact, U.S. wild-caught seafood topped the list of seafood products showing the highest increase in demand this year, according to 57.4 percent of respondents. In 2015, this category was down in fourth place. Value-added products, value-priced items, “free-from” products and smaller portions or pack sizes also saw rising demand from seafood shoppers.

Despite a strong growth in the number of seafood products coming from aquaculture, wild-caught seafood is still perceived as being of higher quality by many consumers. 26.5 percent of respondents said that demand had increased last year for farmed seafood, but 19.1 percent reported a fall in demand.

“A 2015 Omnibus survey by New York-based market researcher Edelman Berland found that 53 percent of those who prefer wild-caught seafood believe that it tastes better than farm-raised options,” Goldschmidt noted.

According to FoodDive, consumers are purchasing less beef, chicken and pork, due to concerns over its impact on health, and issues linked to animal welfare and environmental sustainability. This gives retailers an excellent opportunity to grow the seafood category, but much work is needed in terms of advertising and consumer education to get customers to bite.

FoodDive suggests that retailers ramp up in-store signage and make better use of digital coupons and promotions to lure shoppers to the seafood space. Effort is also required to teach employees about the different fish varieties, where they come from, whether or not they are farm-raised or wild-caught, how sustainable they are, what they taste like, and in particular, how to prepare them.

The Retail Seafood Review showed that temporary price reductions were the most popular and effective form of promotion, while BOGOFs moved from fifth to second place, with product demonstrations and sampling in third position.

Goldschmidt reported that communication of a product’s sustainability was not mentioned by survey participants, but she recommended it as a wise move, citing a recent survey by the Marine Stewardship Council. In this study, 72 percent of seafood consumers agreed that people should eat seafood only from sustainable sources in order to save the oceans. 68 percent believed that consumers should be prepared to switch to more sustainable seafood, and 54 percent said they would pay more for a certified sustainable seafood product.

She also cited Jeff Brammer, of product testing, inspection and certification organization NSF International, who said: “Price may be the Number One factor today for consumers, but with proper communication and knowledge provided at the point of sale, this pendulum can shift toward sustainability, social accountability and quality.”

Asked what input they would like from seafood suppliers to help improve retail seafood sales, many respondents to the Retail Seafood Review, mentioned better pricing and greater promotional and marketing support. According to Goldschmidt, one respondent specifically requested “lower pricing on less popular fish to get people to try more and build sales slowly.”

Greater availability of cheaper types of fish could allow retailers to expand their sustainability initiatives and encourage repeat-purchases driven by low pricing.

Other requests included product training for staff, consistency of quality, fewer out-of-stocks, and greater transparency on country-of-origin labelling, which is a major area of abuse for fraudsters.

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