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Species Focus: Blue crab

Blue-swimming crab imports fuel demand for crab and other value-added products

Rick Ramseyer
December 01, 2005

Seven years ago, Laura and Roman Zabicki opened a seafood restaurant that specializes in Maryland-style crab cakes. Though the couple once lived in the Chesapeake Bay area, their 100-plus-seat eatery is far from the East Coast — it’s just south of Yosemite National Park in Oakhurst, Calif. — and the 25 or so pounds of crabmeat they buy weekly is from Southeast Asia.

“Crab cakes are our signature, top-selling seafood item,” says Laura Zabicki, co-owner of the fittingly named Crab Cake Restaurant. “But when we opened out here, it was unusual to have blue crab on the menu.”

The Zabickis, it turns out, were ahead of the curve. Blue crab, once considered regional fare from the Chesapeake to the Gulf of Mexico, has gone national in both foodservice and retail outlets, spurred in large part by the surging popularity of crab cakes and the ready availability of low-cost imported crabmeat, especially the Portunus genus of swimming crab.

Crab cakes have joined the lineup in recent years at full-service restaurant chains such as Ruby Tuesday, Bennigan’s Grill & Tavern, The Cheesecake Factory, Ruth’s Chris Steak House and Fleming’s Prime Steakhouse and Wine Bar, and are a given for seafood players like Red Lobster, McCormick & Schmick’s, Rockfish Seafood Grill and Joe’s Crab Shack.

“We deal mainly in casual-dining concepts for our foodservice business, and we see the rise of crab cakes in all those institutions,” says Bubba Shaw, senior director of purchasing and sales for Shaw’s Southern Belle Frozen Foods in Jacksonville, Fla., a crab-cake maker that imports crabmeat from Asia and South America.

Moreover, chefs who have migrated from the East to markets like Las Vegas, San Francisco and Los Angeles often have a preference for crab cakes made with blue crab, says Steve Harmell, VP of sales and marketing for Blue Star Food Products in Miami, which sources crabmeat from Indonesia, Thailand, Vietnam, the Philippines and China.

“We’ve seen crab cakes on the West Coast go from being made with surimi or Dungeness to being made with blue crab,” Harmell says.

More supermarkets are stocking blue crab as well, industry stakeholders say.

Among the chains featuring refrigerated or frozen crabmeat (and, in some instances, crab cakes) in various locations are Wal-Mart, Costco, Safeway, Albertsons, A&P, Giant, Stop & Shop, Food Lion, Hannaford, Wegmans and Whole Foods.

The clamor over crab, of course, has heightened demand. In 2004, U.S. imports of pasteurized and frozen crabmeat surpassed 35.3 million pounds, up from around 32 million pounds the previous year, according to the National Marine Fisheries Service. And from January through August 2005, imports totaled 30.4 million pounds, a steep climb from 21.6 million pounds for the same eight months last year.

Through mid-October, based on Urner Barry data and interviews with importers, the price per pound for premium crabmeat was $15.60 to $15.95 for jumbo; $10.25 to $10.85 for lump; $6.75 to $6.95 for special; and upwards of $4.50 for claw.

“Imports are going to continue to increase,” says Troy Turkin, executive VP of sales and marketing for Newport International in St. Petersburg, Fla., which brings in multiple containers of crabmeat per month from China, Vietnam, Indonesia and Thailand that are sold under the Jack’s Catch brand.

“And the supply right now is plentiful.”

Makers’ mark
Food manufacturers and marketers are doing their part to feed the blue-crab boon.

In 2004, Chicken of the Sea International in San Diego unveiled a shelf-stable, 3.5-ounce Premium Crab Pouch as an alternative to its canned crabmeat. And Blue Star, which introduced a refrigerated 6-ounce retail pouch in Wal-Mart stores nearly three years ago — priced at about $5.50 (lump) and $4.50 (claw) — is launching a line of flavored crab cakes in 2006, first for foodservice applications and later for retail customers.

“At the retail level, especially, there’s been a huge amount of value-added products using blue crab come onto the market, some with restaurant-chain names on them,” says Harmell, citing the Jimmy Buffett-inspired Margaritaville brand of Coral Reef Crab Cakes as an example.

Further, Phillips Foods in Baltimore, a blue-crab heavyweight in both foodservice and retail arenas, plans to offer a new twist on its packaged crab cakes that consumers generally fry.

“Gourmet bakeable” crab cakes will be available for retail sale by year’s end, priced $6.99 to $7.99 for two cakes.

“Crabmeat is an expensive protein, and people who buy it don’t want to screw it up,” says Mark Sneed, Phillips president. “They prefer [crab cakes] that are already made.”

Phillips, which has two processing plants on Chesapeake Bay, nonetheless imports nearly all its crabmeat — roughly 13 million pounds per year — from places like Indonesia, Vietnam, China and India.

Not surprisingly, crab plays a role in about 65 percent of the menu items at Phillips’ seven full-service restaurants in Maryland, Washington, D.C., and Myrtle Beach, S.C. (An eighth location is set to debut next May in Atlantic City.)

In addition, concession providers such as HMSHost Corp. in Bethesda, Md., have license agreements to run Phillips restaurants in airports.

“Our intent is to grow that business over the next five years between 40 and 50 units,” Sneed
explains.

Domestic demand
Despite the increasing reliance on imported crabmeat, annual landings for domestic blue crab (Callinectes sapidus) remain significant, ranging from 160 million to 185 million pounds. Indeed, U.S. product is a must at scores of restaurants and grocery stores in the Chesapeake and Gulf regions, as well as at national, high-end eateries like McCormick & Schmick’s.

Sting-Ray’s Restaurant in Cape Charles, Va., uses 300 pounds of locally caught crab per month — even more during the summer — to create popular dishes such as Broiled Crab Cakes ($18.95) and Crab Imperial ($21.95), says Tim Harclerode, one of Sting-Ray’s managers.

At Crab Shack on the James in Newport News, Va., crab cakes made with Chesapeake-area lump backfin are the favorite. (The sandwich platter is $9.50 and the dinner is $18.95.)

“The secret is using the best-quality crabmeat,” says Nicky Hionis, manager of the Crab Shack, where in late October a half-dozen steamed No. 1 Jimmies were $17.95.

Chesapeake Crab Connection, with three retail outlets in Pennsylvania, typically goes through 800 bushels of live or steamed blue crab a week during the summer. Early last month, a dozen supers were priced at $69, up $4 from a year ago.

“It’s all domestic, but it comes from different areas,” says Jim Norton, president. “We buy a lot of crabs and crabmeat out of Louisiana, and some out of Maryland and North Carolina.”

The company also is expanding its restaurant — Chesapeake Crab Connection in Lancaster, Pa. — from 90 to 270 seats and recently launched a consumer-focused Web site.

For crab processors that have a domestic-product slant, however, keeping competitive against the tide of inexpensive imports has been rough.

Graham & Rollins in Hampton, Va., one of a handful of processors left in the Chesapeake region, handles 4 million to 5 million pounds of U.S. blue crab annually, sourced primarily from the East Coast.

“My crabmeat prices have not changed in the last 15 years, plus or minus a quarter to 50 cents,” says John Graham III, president. “But the cost to do business here has gone up 40 percent to 60 percent. That’s what’s wiped the industry out.”

Graham & Rollins, in fact, is gradually getting into imports, bringing in a small percentage of pasteurized crabmeat from Colombia.

“A lot of restaurants and users just don’t care about supporting local people anymore,” Graham says. “They realize they can save $2 to $3 a pound by replacing what used to be my meat with a cheaper meat and with Old Bay and butter and other types of seasonings.”

“It’s a hard sell just to switch them back based on taste and waving the U.S.A. flag,” he adds.

Hurricane hurdles
Along the Gulf Coast, meanwhile, processors are struggling to overcome the one-two punch of hurricanes Katrina and Rita.

Sal’s Riverside Seafood, a wholesaler in Kenner, La., sustained damage to its building, lost $20,000 of softshell crab and as of late October didn’t have any blue crab in stock. And with Louisiana fishermen struggling to replace lost traps and ruined boats, owner Sal Junda doesn’t expect to have any Gulf- or Lake Pontchartrain-caught crab until next spring.

“But if fishermen start getting them in, we’ll start buying,” Junda says.

“The hurricane put a lot of fishermen out of business, but those who’ve returned to work are producing a lot of crabs,” says Jim Rich, president and owner of Catfish Wholesale in Abbeville, La., which sells 160,000 pounds of Gulf-area crabmeat and around 1 million pounds of live crab a year.

“We’re paying 40 cents a pound for crab now, and right after Hurricane Rita we were seeing 65 cents a pound,” Rich says.

Other factors that are top of mind with blue-crab stakeholders are fuel costs and — for importers — the weak U.S. dollar. Still, those issues don’t appear to be slowing demand.

“Our costs have gone up over 5 percent in the past year,” says Norman Whittington, president of Byrd International in Owings Mill, Md., which owns facilities in Thailand, Indonesia and China and also packs in the Philippines. “But the market seems to be accepting the increases we’ve been forced to pass along.”

Phillips Foods, tagged with higher fuel bills in Indonesia in particular, tells a similar tale.

“This is our fourth month of extraordinarily brisk sales, and we’re selling out of product even with pricing high,” says Sneed, noting that special and backfin grades are going to the first point of distribution at an all-time peak of $11.25 and $13.25 per pound, respectively.

Mike Henninger, VP of distributor Poseidon Seafood in Charlotte, N.C., which each month sources about 5,000 pounds of domestic and imported crabmeat, echoes the comments of many industry representatives: “Usage is certainly up. And our feeling is, it will continue to grow.”
 

 December 2005 - SeaFood Business 

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