Gone Fishing: Growing Demand Gives Retailers New Opportunities for Seafood
As the number of Americans looking to maintain a healthier diet continues to increase, the amount of seafood being consumed also continues to grow.
According to FMI’s report, The Power of Seafood 2022, total seafood sales were $16.9 billion in 2021, growing 0.9% compared to the previous year. In 2020, seafood sales grew by 28.4% over 2019. FMI also reported that 29% of Americans are classified as frequent seafood consumers, eating seafood at least two times per week.
That number was 25% of shoppers in 2019, and 21% in 2018, showing the continued growth of seafood accelerated by the COVID-19 pandemic and consumers’ shift towards healthier lifestyles. While more than half (54%) of consumers surveyed in The Power of Seafood 2022 report said the desire to eat healthier was driving their increased seafood consumption, other factors for the increase include wanting a greater variety in their diet, eating more proteins and looking for new types of food to eat.
“Experts predict that by 2030, seafood will provide 3.3 billion people with 20% of their animal protein intake,” said Tom White, Senior Manager of Supply Chain Food Safety - Seafood at NSF International, a third-party certification firm. “Awareness of the health benefits of seafood has also increased, as it is known to be an excellent source of lean protein with a range of nutrients that help to prevent heart disease and diabetes, and to improve brain and eye health as well as mental health.”
White also pointed to a recent report from the Food and Agriculture Organization of the United Nations that noted global seafood production has quadrupled in the past 50 years to meet increasing appetites for this source of protein.
Shrimp, salmon, tilapia and tuna remain the most popular seafood products, accounting for 60% of total revenue according to FMI’s report. Crab has seen increased popularity, but the high cost has impacted its share of the seafood market. Since most seafood consumed in the U.S. is imported, experts point to
higher shipping costs as a key factor for higher prices consumers are seeing in the seafood section.
But price isn’t the only issue impacting what private label seafood products shoppers are buying. Like many other categories, sustainability is an important issue for consumers when purchasing seafood.
“As seafood intake increases, more consumers are actively seeking out sustainably sourced seafood,” said White. “Consumers are becoming more intentional about what they choose to eat, often selecting products that have a ‘seal of approval’ in the form of a certifier’s logo ensuring that what’s marketed as sustainable or healthy for them is validated by a reputable source.”
He noted that ‘sustainably sourced’ is defined as seafood that is caught or farmed with minimal social impact and environmental impact to the marine ecosystem, conserving fish stocks and the ecosystems that support them while complying with relevant laws and regulations.
White added that the demand for sustainable seafood is causing some retailers to make certifications a prerequisite to be carried in store, or to become a supplier for private brands. While it can be costly, these measures are what retailers view as important when creating a private label seafood portfolio.
And with retailers trying to mitigate cost increases, many continue developing their portfolios of private label seafood options, said Rick Stein, VP of Fresh Foods at FMI. “Private brands are often a cost savings option for consumers,” he said.
According to the U.S. Grocery Shopper Trends: Shopping Landscape, 86% of shoppers who are worried about rising food prices are making behavior changes and that includes 35% of those shoppers buying more private brand products.
While seafood still lags behind meat categories like beef and chicken in sales, the category’s growth over the past two years should signal to retailers that expanding seafood offerings could lead to strong sales performance.
Stein added that when it comes to new ways for retailers to expand their private label seafood selection, success can be found in the freezer aisle. From 2020 to 2021, frozen seafood sales increased 4.1% according to FMI’s report.
“Retailers are developing lots of frozen meal options in seafood,” he said. “Consumers enjoy the convenience of having the seafood partially prepared in order to meet their menu desires. For food retailers, frozen is the best way for private brands to expand meal seafood options and create solutions for shoppers.”