BOSTON - Seafood sales will get a huge lift in the coming years, thanks to favorable demographics, better supplies and marketing programs, according to a panel of industry experts.
New distribution channels, such as convenience stores, will also give total seafood sales an unprecedented boost, the speakers said.
By 2020, there will be 70 million Americans over the age of 60, and they will drive the expected increase in sales, said industry consultant Howard Johnson of H.M. Johnson & Associates, Jacksonville, Ore. In fact, the aging of the population could help lift per capita seafood consumption from just over 16 pounds to as much as 20 pounds by 2020.
"The health factor is one reason," Johnson said. "In fact, there are people over 65 right now eating nearly double the average per capita consumption."
Nevertheless, mainstream supermarkets have difficulty achieving consistency in the quality of seafood, so they should pay more attention to the category and the numbers it produces, another speaker said.
Johnson moderated a panel that included former supermarket executives turned consultants - Philip Walsh, Alfa Gamma Seafood Group, Miami, and Tom DeMott, Encore Associates, San Ramon, Calif. - and James Anderson, a professor in the University of Rhode Island's department of environmental and natural resource economics, who noted the fast-growing fish farming industry will bolster the seafood industry.
Ex-retailers Walsh and DeMott pointed out that the fresh seafood business is a particularly vulnerable one for supermarket chains.
"It's very difficult to achieve consistency in quality of seafood in mainstream supermarkets in America today," Walsh said. "The model is tough and the numbers show it. Selling a retail value of $2,000-$4,000 a week [from the service case] while keeping the fish fresh is very difficult."
He and DeMott recommended more self-service cases in stores with smaller footprints. Most of the panelists agreed that the retailers' focus should be on driving core species, rather than bringing in an overwhelming variety, and they suggested pushing enhancement, packaging and pricing upstream in the supply line to cut shrink and maximize profits. Increased branding of case-ready fillets could also be a plus, they said.
In the past, the allure of having a beautiful, ice-bedded, service seafood department too often has overshadowed attention to the bottom line, the ex-retailers pointed out.
Up until recently, many supermarkets blended their meat and seafood department numbers together. Since seafood was such a small percentage of the total, its shrink never was transparent.
"At one supermarket we worked with, once the numbers were broken down, we found shrink in seafood as high as 40%. That took the glow off the service seafood case and they pulled it in a little bit," Walsh said.
Walsh, whose background includes stints at Harris Teeter and Stop & Shop, said he sees retailers trying to tackle the shrink problem with better buying and reduced footprints, but he also said they're trying to sell a big variety, which he thinks works against them.
"They bring in more variety, new species, because they think they'll bring more customers, but I don't think that's a good thing," Walsh said. "The people behind the counter just have to babysit that many more species and it's difficult for them to keep track."
Hybrid display cases - full service on top and tray packs on the bottom - are common but not particularly effective as far as image goes, he said.
"To me, that doesn't make a statement one way or the other," Walsh said.
On the contrary, he heartily recommends self-service all the way for most mainstream supermarkets, and suggests pushing as much labor as possible upstream, making many products case-ready when they hit the store.
DeMott also emphasized that self-service makes the most sense.
"Are your customers really happy with your service department and the service they get?" he said. "How many service chicken departments do you see? Can't seafood go the same way?"
