In the Swim

With seafood sales trending higher, customers are biting on grocers’ baitcasting of expertise, convenience products and health-focused messaging.

Faced with a perpetual undercurrent of choppy waters in the shrink-prone, labor-intense fresh seafood department, category executives are well versed in the daunting expedition that lies before them when angling to increase sales. It appears the efforts paid off well in the past year for most retail seafood directors, who reported respectable — if not stellar — conditions in terms of both dollar and volume gains, according to the findings of Progressive Grocer’s 2014 Retail Seafood Report.

Results for PG’s exclusive, retailer-driven seafood study were once again amassed from direct input by a cross-section of national, regional and independent category officials with “sole” responsibility for seafood category procurement decisions for their supermarket(s). Responses to the annual retail seafood benchmarking study captured snapshot feedback on the shifting tides of such issues as comparable sales and profit performance, chief hot-buttons, and category performance by species and merchandising methods.

While retail seafood teams back-trolled mightily to keep retail prices on an even keel amid rising wholesale costs, 37.8 percent of PG’s 2014 retail seafood survey participants reported increased sales for the 12 months ending Nov. 30, 2013, up seven points from PG’s 2013 study. Equally telling of the more stable retail seafood sales climate is the same percentage – 37.8 – of retail executives who reported reeling in status quo same-store seafood sales in the past year, paced by 24.4 percent who lamented decreased comparable category rings.

As one retail executive told PG: “Overall, 2013 was a consistently good year from both a dollar and pound standpoint. Consumers were still buying our biggest driver, shrimp, even as price increases were passed on. It was probably one of the best years we’ve seen with our seafood sales in recent memory.”

While various fresh foods are making inroads in distribution to other retail channels, such as dollar stores, drug chains and c-stores, supermarkets still reign supreme as the primary channel of distribution. With little change expected to occur on that front in the immediate future, retail seafood leaders have good reason to harness the tailwinds of heightened consumer awareness of the health benefits of more frequent seafood consumption.

This sentiment was heavily hammered home by this year’s panelists, not one of whom – for the first time ever in the 20-year history of PG’s Retail Seafood Report (formerly known as the Seafood Operations Review) – projected decreased category sales during the current year. Nearly half – 45.5 percent of participants – projected increased seafood sales for 2014, while a little more than half – 54.5 percent – anticipated static sales.

The majority of the 11 seafood categories increased average dollar and volume sales compared with the previous year during the 52 weeks ending Dec. 28, 2013. Increases in categories like seafood side items and other seafood helped drive seafood department growth upward. Each of the three seafood supercategories (fresh, other and prepared seafood) increased average weekly dollar sales compared with the previous year, and increased volume sales.

Within fresh seafood, the fin fish category increased average dollars and volume during the latest 52 weeks (up 3.5 percent and 5.3 percent respectively). The crustaceans category had the largest growth within fresh seafood, up 7.2 percent in average weekly dollar sales and 12.7 percent in volume, aided by a 2.1 percent dip in average retail price.

The seafood department saw diminished emphasis on promotions. All but three of the 11 categories decreased volume sold on promotion compared with the previous year. Among the major sellers, shrimp had the largest decline in volume sold on promotion compared with the previous year, down three percentage points.

In assessing the key challenges facing retail meat executives – who were again asked to rank the seriousness of various issues on a scale of one to six – attracting more shoppers to the department was cited as the top-ranked concern. Store labor-related considerations took the next two slots on the problem index, with attracting new department staff landing in the second slot, followed closely by training/motivating department staff to engage with customers. It comes as little surprise to find retail pricing, country-of-origin compliance and profits also cited prominently among survey panelists’ pain points. Meanwhile, nutrition labeling, customer confusion/perception and food safety were deemed somewhat less worrisome, but nevertheless vexing, for retail seafood stewards during the past year.

Scaling New Heights

With more shoppers inclined to purchase fish more often as part of a healthier diet, as well as for specific health benefits, seafood departments can cast an even wider net with high-visibility merchandising and presentation. With merchandising and POP deemed the top two promotional vehicles, it’s important that retailers keep these dual blades as sharp as possible to keep sales afloat.

Relief on this front is increasingly being sought from leading seafood organizations such as the Alaska Seafood Marketing Institute (ASMI), which offers an online training tool – Alaska Seafood U – to augment current retail training practices; the Gulf Seafood Marketing Coalition; and the Marine Stewardship Council, whose new blog, Seafood Matters, features a diverse array of authoritative voices on sustainable seafood topics.

Further, while the majority of consumers rely on seafood counter staff as the main source of seafood information when selecting fish or seafood to prepare at home, leading supermarket companies are increasingly employing branded messages like ASMI’s Alaska Seafood logo or the Monterey Bay Aquarium’s “Seafood Watch” program (see related sidebar on page 84).

Hy-Vee, Rouses Flaunt ‘Best Fishes’

To their exceptional credit, regional seafood boards are helping progressive grocers excel at simplifying the sustainability message and quality proposition of their specialty items, through such means as enabling customers to understand which items are “good,” “better” and “best” in the realm of sustainable choices, and the natural bodies of water particular species hail from that provide distinct flavor profiles.

To wit: As part of the its revamped seafood procurement policy, West Des Moines, Iowa-based Hy-Vee has unveiled its new “Responsible Choice” program, in which select seafood products will bear color-coded labels from the Monterey Bay Aquarium’s “Seafood Watch” program.

The 235-store supermarket chain, which operates stores across eight Midwestern states, recently unveiled its Responsible Seafood Commitment and comprehensive procurement policy, developed in partnership with the nonprofit FishWise, which focuses on supporting sustainability through environmentally responsible practices.

“The Responsible Choice logo serves as a seal of approval that more and more of our seafood is responsibly harvested or raised, minimizing damage to the environment and other sea life,” says Nate Stewart, Hy-Vee’s VP of perishables. “Responsible Choice assures our customers that their seafood is of the highest quality and that Hy-Vee is committed to the global environment.”

Meanwhile Thibodaux La.-based Rouses Markets with 43 locations in Alabama, Louisiana and Mississippi, saw great success with a partner promotion with the Gulf Seafood Marketing Coalition (GSMC) last year that enabled customers to sample Gulf Coast shrimp and oyster recipes, alongside informative in-store materials to help them prepare the dishes at home.

“At Rouses, we always strive to offer our customers the best and freshest products and in the seafood industry this means Gulf Coast seafood,” says Donny Rouse, third-generation managing partner of Rouses. “The Gulf Coast is known for fresh and tasty shrimp and oysters and we want to encourage Rouses shoppers to explore new dishes using Gulf Coast seafood.”

The timing of Rouses’ promotion with GSMC came in tandem with last year’s headline-grabbing seafood mislabeling issue. Accordingly, Rouses was able to tout its Gulf Coast seafood messaging with confidence via the “Gulf Trace” traceability program which assured shoppers that the shrimp or oysters were 100 percent authentic, wild-caught Gulf Coast shrimp.

Rouses touted the promotion with door clings and other POP materials to help impart excitement and drive traffic to the seafood department where fresh Gulf Coast seafood was the star attraction