The crab market “is at a place where it’s never really been before,” with constrictions in supply and astronomical prices, according to Chicken of the Sea Frozen Foods Vice President of Category Management Rob Kragh.
Speaking at the National Fisheries Institute’s 2022 Global Seafood Market Conference shellfish panel on Wednesday, 19 January, Kragh said expected shortages of snow crab and other types of crab are crashing up against record-high prices, setting the stage for a showdown between consumers’ taste buds and their wallets.
“Every person [in the sector] is experiencing risks that you’ve never seen before,” he said. “We’re all walking into categories at historical highs, places we’ve never been.”
Canada and Japan have not yet set their 2022 quotas yet, but Alaska cut its snow crab quota by 88 percent, which is predicted to leave the global market short between 7 and 9 percent of its 2021 total.
Coupled with that is booming demand for the species and a resulting mushrooming of prices. Snow crab prices rose 69 percent in 2021, even with a supply increase of 9.8 percent. Harbor Seafood President Christian Limberg said the market is starting to react to the pressure.
“One of the adaptations you've seen is the fact that people are starting to change, in certain cases, the size of the actual product [they’re ordering],” Limberg said. “So we're seeing the people who were using the much larger snow crab for its look and presentation are now switching to the smaller crab and that's strictly from a price standpoint to survive these incredible markets.”
Limberg said 2021 showed those in the crab market that consumers are willing to pay more for crab, but with prices continuing to rise, there’s uncertainty as to whether the market will hit a ceiling.
“The greatest impact by far to the demand is going to be the price point. Price point allows you to have the flexibility to feature it in retail and promote it in foodservice. Without that price point, there's going to be a real challenge. The question is, relative to other proteins, where those price points pull out? Where do they allow you to be flexible? Where is the consumer now in learning to accept higher prices? Do they want that privilege of eating crab enough that they'll actually go out and spend the extra money? These are all the questions that no one really knows [the answer to] yet,” he said. “We've seen the increasing demand for everything in the year 2021 and that's been exciting … but the question is, can you continue that momentum?”
Numerous foodservice venues, such as casinos and high-end restaurants, haven’t fully reopened since the start of the COVID-19 pandemic, and if they get back to full service in 2022, that could open up new markets for crab, even at higher pricing levels, according to Limberg.
“I think you just can't get fixated on the supply side. You really have to concentrate on the demand and the early parts of the season, which will be basically be when the Alaskan product starts coming in, which we expect to be in late March, April, when that meets up with the Canadian product coming in, which will probably be close to mid-April,” he said. “That's when the story is going to start to be told.”
Photo courtesy of TMON/Shutterstock
