The Luxury Backlash

This economic disaster has created widespread commodity deflation. With the exception of Farmed Salmon, which is suffering from a major crop failure in Chile, we have seen prices drop. Sometimes these price drops can be good for a product. Lower prices, historically, have lead to increased consumption, and we’ve seen this on a number of items this year. There are a category of items however that have experienced a disproportionate drop in value and seen consumption drop to boot. I’m talking about luxury seafood items. 

What is a luxury seafood item? You’d think that it would be defined by price, but that is only part of the story. Perception is the other part of the equation. How many people are buying Hummers right now? Not a lot. It’s not solely based on the cost.  According to Carprice.com the base price of a Hummer is $32,345. The base price of a Toyota Avalon is $32,145, virtually identical. The Hummer is actually cheaper on the lot. People aren’t buying Hummers because of the message of “in your face” luxury and crass commercialism. Three years ago it was a status symbol. Now, it’s an embarrassment. This same thing is happening in Seafood.

What have been the biggest losers this past year in seafood? Jumbo Lump Pasteurized Crabmeat, Jumbo Shrimp and Lobster tails. These items dropped in value precipitously when the economy softened. The worst part was that consumption dropped more quickly than the prices, and no amount of discounting could bring that customer base back into the fold. We’re almost a year into the new economic reality and what do we see with these items? The pricing is still at or near historic lows and demand is still relatively low. What’s to be done?

We have to reposition these seafood items and make them accessible to a wider range of customers. We have to take the smaller sizes of lobster tails and sell them at retail as an affordable luxury. We need to get large shrimp on the menus of midrange restaurants in preparations that are not too “snotty” and at prices that are reasonable. We need to change customers’ perceptions of the position of these items in the marketplace.

It wasn’t just our 401k values that changed when the economy went south. We also have experienced a major shift in culture, away from flash and pretention and towards modesty and value. No one is sure how long the economy will be bad. Similarly we don’t know when or whether we will see a shift in cultural values. We need to live in the present and build our business based on current realities. If we do this, we’ll create a stronger and more stable base of demand for all products.

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Welcome!

 This is your place to learn about a wide variety of fresh and frozen seafood.  Posts will cover a variety of topics.  Expect to see focus features on individual species of fish such as Cod or Pollock.  You’ll also see articles comparing different species of Shrimp, Crab, or Lobster.  Some posts will have pictures of fish and will teach you how to handle and prepare them.  Other posts will focus on the seafood commodity markets, helping you to anticipate rises and falls.  We’ll explain the different species of wild Salmon, the different countries of origin for farmed Salmon, and how to choose which to use.  Additionally we will have a recipe section with our favorite seafood recipes and a glossary of fish terms that may stump you.  The seafood experts who will be contributing to this website have an average of 20 years of experience.  In general, our focus is on posting and publishing articles, as such we will be moderated and are not likely to post many responses.  We will review your responses however, and will do our best to reply to you off-line.  Feel free to email us with suggestions for future posts as well.  Again, this website is for you.  Thank you for your attention, and welcome to seafoodexperts.net!

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Cephalopods are an amazing seafood category.  Part of the mollusk family, these animals form a category unto themselves.  The three main types of Cephalopods are:  Squid, Octopus and Cuttlefish also known as Calamari, Pulpo and Sepia.  There are a wide variety of products available in the market from many different countries of origin.  All cephalopods are wild caught.  However, the most amazing cephalopod story occurs with Squid.

Squid is a cephalopod that in less than 20 years has become a mainstream seafood item.  Originally an ethnic specialty, Squid was introduced to mainstream USA in the mid 1980s in its cleaned form as “Cleaned Calamari.”  Now you find Calamari, (bypassing the common name of squid) featured on most restaurant menus and is a consumer favorite despite being “SQUID” or bait.  It has transcended from squid to Calamari and the fact that Calamari is squid has become a distant memory for most consumers.  Calamari is sold primarily in cleaned form:  Tubes and Tentacles, Tubes Only, Rings and Tentacles, Rings Only or even as Steaks.  Cleaned Calamari is 100% useable, with no waste.  Cooking applications range from fried and grilled, to stuffed and sautéed.  Price point, cooking ease and the U.S. love of fried food makes calamari a natural winner.

There are many different types of squid with their own particular characteristics that we will explore in future discussions.  However, regardless of the type, Calamari or Squid is one of the best seafood values out there!

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South African Lobster Tails

These are cold water spiny lobster tails. They have the well deserved reputation as the world’s premiere lobster, offering unmatched freshness, taste and texture. Caught in the cold, clean waters of the coast of South Africa, this lobster is immediately processed on frozen-at-sea vessels to preserve freshness. Dramatically overflowing with meat, these sweet and mild lobster tails can be boiled, steamed or grilled. These Lobster Tails can be thawed and chilled prior to use, delivering added versatility during preparation and presentation.

The factory vessels fish in very deep water off of the coast of South Africa at an average depth of 900-1200 feet. The lobsters are caught in traps.

The shell is very thin and the meat to shell ratio is very high.

This lobster species is smaller than other lobsters. The majority of the lobster tails are in the 3.5 oz to 6.0 oz range.

Each size has a letter designation. The following is how the lobster tails are graded:

Tight size grading allows customers to keep South African lobster tails on the menu at an affordable price point.

Comparison of South African lobster tails to other cold water lobster species:

Suggested applications and preparations for South African Lobster Tails include:

Uses of Raw Extracted Meat

Medallions • Casserole dishes • Ceviche

Split Tails

South African Lobster Tail’s uniquely thin shell allows it to be split easily

Uses In-Shell

Surf & Turf • Broiled • Grilled • Boiled

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Looking For Value

The food landscape - always a fluid environment, has seen some dramatic shifts over the past 12 months. With consumers reducing their dining out dollars and increasing the number of meals consumed in the home, competition has become most intense in the past few months to provide value to retail consumers trying to stretch their purchasing power. This is great news from a retailer’s perspective as it drives more consumers into the store and many retailers are seeing comp sales increases as high as 5% over last year. But what are they going to buy? Convenience-as the economy has slid into recession, people are working harder. Taking on more responsibility and working more hours as they are asked to do more with less. They have little or no time to plan much less execute on a meal. So they are looking for products that they know how to cook or products that they feel they cook quickly and successfully. Quality-for those consumers that are trading in their frequent diner card for a frequent shopper card, they are coming into the store looking for products that will replace that restaurant experience. That means that they are looking for quality products in terms of freshness, taste and appearance. Value- Consumers are watching their expenditures. Savings rates have increased for the first time in decades and everyone is trying to do more with less. Does this mean that they are looking for the cheapest product on the shelf? Not necessarily. What they are looking for is a solid value. Products that are aggressively priced and meet their need for quality and convenience at the same time.

Unfortunately, seafood has not fared as well as we all would like in this competition. In the last three quarters of 08′, seafood was the only perishables department that did not see an increase in sales and tonnage. As customers have defined their purchasing decisions they have found that other proteins, in particular poultry, which saw a 6.7% increase in sales in 2008, have met their needs more effectively. It does not have to be this way. There are a large number of products that can be offered at a great value.  Products like Capensis, Swai and Ponga, to name a few, all offer wholesale price points in the mid $2.00 range which would allow a retailer to market these products for as little as $3.99 per pound on sale. Although it may take some innovative marketing to introduce consumers to these species, given the competitive environment I think it will be well worth the effort.

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