Ask any seafood industry professional, stakeholder, or analyst about 2023, and they’re likely to groan.
“As much as it pains me to say this, 2023 was a year of headwinds and struggles for seafood, including fresh, frozen, and shelf-stable,” 210 Analytics Principal Anne-Marie Roerink said when queried about last year. “The seafood retailing industry certainly did all the right things to kickstart sales, including increased levels of promotion, keeping prices flat, and even driving more favorable prices for the consumer. But, the reality of the marketplace was a harsh one for seafood.”
Inflation was once again a primary antagonist for the U.S. economy in 2023, Roerink said, with American consumers paying 30 percent to 35 percent more for food overall last year compared to 2019. As 2024 gets underway, the “sustained impact of inflation … has a lot of consumers scrambling to balance their budgets,” she said.
According to FMI – The Food Industry Association Vice President of Fresh Foods Rick Stein, the impact of inflation last year was particularly intense for the seafood industry.
“Inflationary price increases certainly had a negative impact on the sale and consumption of seafood in 2023, with many shoppers turning to more affordable proteins as they adjusted their spending habits to the economic environment,” Stein said.
Data from Circana revealed a 3.8 percent decrease in sales by volume for refrigerated finfish during 2023 and a 1.8 percent dip in sales by value for the category. Meanwhile, frozen finfish sales by volume and value fell 4.2 percent and 3.1 percent, respectively. Refrigerated shellfish sales dropped 5.6 percent by value in 2023, though sales by volume actually rose 0.9 percent, thanks in part to crab sales growth. Frozen shellfish sales dropped 2.9 percent by volume and 7.3 percent by value.
Inflation certainly wasn’t the only obstacle obscuring U.S. seafood consumption, Roerink said, noting that “the nation as a whole is facing record credit card debt, now exceeding [USD 1 trillion, EUR 924 billion], in addition to the savings built up during the first pandemic year now being depleted.”
“On top of all this, the end of the emergency SNAP/EBT allotments in Q1 and student debt repayments resuming in Q4 meant a marketplace with a lot of economic pressure on America’s pocketbook,” Roerink said.
These troubles pushed consumers to opt for familiar, routine meals more often – an unfavorable trend for seafood, Roerink said, as “it is a very thin slice of the population who routinely purchase seafood” compared to the American majority, “who only purchase it a few times a year.”
“That meant a loss of household penetration to just 53 percent of households purchasing fresh seafood in 2023 – a loss of 2 percent,” she said. “Additionally, those who did buy seafood bought it less frequently, with [shopping] trips down to fewer than eight per year.”
Retailers were hit hard by the category’s decline, Roerink said, with some choosing to do away with their full-service seafood counters in response, while others downsized the size and scope of cross-merchandizing displays.
“When starting with household engagement of 53 percent versus, say, 87 percent for beef, it is harder to justify cross-merchandising displays involving seafood than beef,” Roerink noted.
Stein said it is in retailers’ best interests to reverse this trend in 2024.