After a rough year for U.S. shrimp importers, the outlook for the first half of 2024 continues to be relatively grim.
A panel of executives speaking at the 2024 Global Seafood Marketing Conference – which took place from 23 to 25 January in Orlando, Florida, U.S.A. – said the first half of 2024 will likely see a contraction across the seafood industry, particularly with shrimp imports, in the wake of a difficult 2023.
“It’s been a wild year, a challenging year for many of us,” Rich Products Consumer Brands Division Senior Vice President Shannon Gilreath said.
Gilreath attributed the contraction to the ending of some Covid-era SNAP benefits and the resumption of student loan repayments that had been frozen during the pandemic. As a result, shoppers could not take advantage of lower shrimp prices, resulting in the industry “sitting on expensive inventory."
"It was hard for a lot of us to react across the industry," Gilreath said.
For the first half of 2024, Gilreath said she expects to see “some contraction across our industry, and particularly shrimp.”
Overall U.S. seafood sales will likely be flat this year, according to Guy Pizzuti, seafood director at Lakeland, Florida, U.S.A.-based Publix. However, instead of looking at seafood sales declines last year, Pizzuti said he preferred to look at the overall frozen seafood increases at retail since 2019.
“When you see frozen sales are down … understand that it’s still way up from where we were. We haven’t given it all back, and it doesn’t look like we are going to slide back,” Pizutti said.
Shrimp continued to represent a large portion of frozen seafood sales, making up 52.6 percent of the category in 2023. However, the shrimp category also had the highest absolute dollar decline, dropping 8.2 percent, or USD 321 million (EUR 296 million), per Nielsen.
Frozen shrimp household penetration fell 5.7 percent across all outlets last year, with the most significant drop of 9.4 percent occurring in value grocery, followed by 7.8 percent at supercenters, 5.9 percent in conventional grocery, and 5.6 percent in warehouse clubs.
Frozen shrimp prices declined 3 percent in 2023 to an average of USD 9.21 (EUR 8.49) per pound, but sales were projected to decrease 3 percent for the year, according to Nielsen Homespun Panel. Grocery spending per U.S. household fell 2.9 percent, while grocery trips per household grew 0.3 percent last year.
“Shrimp prices are down, but units are consistently down; we are not seeing any unit lift out of that,” Pizzuti said. “We are continuing to try to find out where the bottom is. We can’t seem to find any point where the customer is saying, ‘we are going to jump back in.'”
The problem is shrimp is a “more expensive protein than anything other than middle meats,” Pizzuti said. Even if retailers lowered shrimp prices to USD 4.99 (EUR 4.61) per pound, prices would still be higher than pork and chicken, Pizzuti told SeafoodSource.
Which begs the question, he said: how low do U.S. retail shrimp prices need to be to encourage shoppers to start buying it again?
“Each retailer needs to assess the role that shrimp plays in the department and the role seafood plays in the store," Pizzuti told SeafoodSource. "I think the answer will be a bit different for each retailer."
For its part, Publix is running weekly promotions at “aggressive price points” in order to spur sales, he said.
However, shrimp and overall seafood sales are likely to benefit from consumers eating more at home and shying away from foodservice to save money. Disinflation in grocery is outpacing foodservice disinflation, so cash-constrained consumers will shift to value channels and at-home consumption as they work to extend their food spending, Pizzuti and Gilreath agreed. And, although consumers will seek value and trade down, “at-home trade-downs will also show consumers looking for affordable indulgences,” Gilreath said.
“Promotions will be incredibly important,” she said.
Photo by Christine Blank/SeafoodSource
