U.S. seafood inflation dropped again in July, but that has not translated to an increase in consumer purchases at retail stores as overall sales and volume of seafood dropped last month.
Similar to the past few months, seafood inflation was lower than overall food and beverage inflation, which rose 5.2 percent in July, according to new Circana and 210 Analytics data. Total fresh seafood prices deflated 2 percent, led by a 7.6 percent drop in shellfish. Frozen seafood dropped more than fresh, dipping 4.3 percent, while shelf-stable seafood inflation rose at a slight 0.6 percent rate.
“Seafood prices reflected below-average inflation across the board. In fact, fresh and frozen seafood prices were lower in July 2023 than in July 2022. Fresh shellfish and frozen seafood saw the deepest cuts in price, but fresh finfish is now also trending below year-ago levels,” 210 Analytics Principal Anne-Marie Roerink said in the monthly Circana-210 Analytics U.S. Retail Update.
Even though inflation is lower in seafood than it is in meat and poultry – overall meat prices declined only 0.2 percent in July, per Circana – seafood “still tends to be [considered in] a higher ring because of its above-average starting-off point,” Roerink told SeafoodSource. “Chicken and pork, in particular, are cost-effective for the consumer with favorable price per pound and promotional profiles.”
Ground beef, ground chicken, and ground pork are increasing in sales because they sport a lower price per pound and can “help stretch the protein dollar,” Roerink said. Fresh seafood, she said, does not have the same type of ground value option.
The main problem is that seafood demand has not caught up with deflation, according to Roerink, resulting in fresh seafood sales dropping 4.8 percent in value to USD 483 million (EUR 442 million) in July, with a 3.3 percent decline in pounds sold. Frozen seafood sales also decreased 4.2 percent in value, totaling USD 500 million (EUR 458 million).
The drop in frozen seafood sales value was offset by a smaller drop in volume, as volume fell only 1.2 percent for the month, in part driven by favorable crab prices and promotions.
“With more favorable pricing and a few months having gone by for consumers to notice it, deflation can indeed move the dial,” Roerink said.
Crab remains virtually the lone success story in both frozen and fresh seafood.
Frozen crab sales spiked 27.5 percent in July, and have surged 270.5 percent for the year compared to a year ago. Fresh crab sales also rose 0.9 percent in July, and pounds sold rose 24.1 percent.
“Crab is a great example of how deflationary conditions can indeed turn on consumer demand, with both volume and dollar gains versus July 2022,” Roerink said.
One grocery chain – Downers Grove, Illinois, U.S.A.-based Fresh Thyme Market – has had incredible success rolling out promotions, such as the snow crab clusters it sold for between USD 5.99 (EUR 5.50) and USD 6.99 (EUR 6.42) per pound – a promotion it put on prior to Independence Day on 4 July.
The company’s overall snow crab sales have spiked 800 percent in the first half of this year compared to the same time frame last year, while volume soared around 1,500 percent.
Besides crab, trout was the only other fresh species that experienced a volume increase in July, rising 1.5 percent. Shrimp sales value declined 1 percent, but volume fell 13.2 percent. Fresh salmon sales value declined 2.8 percent, with a 2.6 percent decrease in volume. Lobster sales value fell 12.6 percent in July, while pounds sold declined 5.1 percent, and cod sales value declined 14.6 percent, while volume dropped 13.5 percent.
Shelf-stable seafood sales largely remained steady, rising just 0.1 percent to USD 211 million (EUR 193 million) in July, while volume fell 3.7 percent in the category. Frozen seafood alternatives realized a significant decline, dropping 17 percent in sales and 23.2 percent in pounds sold.
“Seafood alternatives appear to be following the same path as their plant-based meat alternative counterparts. Initially, alternatives gained on distribution [due to] more retailers carrying these items and perhaps expanding their assortment. More distribution equates to quick growth,” Roerink said. “But, with the seafood alternative set more established now, sales have to lap their year-ago levels, and that’s where we’re seeing some difficulty – much like we are for plant-based meat alternatives.”
Photo courtesy of Sorbis/Shutterstock
