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What's in Store: Freezers gain favor

Supermarkets benefit from rising frozen seafood sales

By Christine Blank
April 01, 2009

Consumers looking to save money but still eat healthfully are turning to frozen seafood items more and more.

Picking up on this trend, retailers are expanding branded and private-label frozen seafood selections.

"People are buying differently than before. Our fresh fish sales are down, while our frozen sales are up," says Joe Lane, store manager and seafood director at Casey's Market in Western Springs, Ill.

"People are interested in quick and easy. They want something they can put in the microwave and go on their way," says Marty Gaul, seafood buyer and merchandiser for Heinen's Fine Foods, a 17-store chain in Warrensville Heights, Ohio.

Total frozen fish and seafood sales are up, according to Infoscan Reviews, published by Information Resources Inc., which shows an overall sales gain of 5.6 percent in all frozen fish and seafood items, excluding frozen shrimp products, for the 52 weeks ending Jan. 25, 2009.

Still, frozen shrimp sales are strong, up 2.7 percent for the same time period, to $1.1 billion, says IRI.

"In the frozen seafood category, our best performers continue to be frozen shrimp, both raw and cooked. Shrimp is very easy to prepare, for most consumers," says Cecil Smith, manager of seafood merchandising and training for Bloom, a banner of Food Lion in Salisbury, N.C., which is a division of Delhaize Group, Brussels.

Seafood entrées have experienced the highest sales growth over the last year, according to The Nielsen Co.'s research of sales in all food, drug and mass merchandise outlets, excluding Wal-Mart. Sales of combination two-food frozen seafood entrée packages (seafood entrées plus one side dish) jumped 38.9 percent to $43.3 million for the 52-week period, compared to the same period a year ago, says Nielsen.

As a result, grocers have expanded their entrée offerings. Winn-Dixie Stores in Jacksonville, Fla., for example, in late January launched a line of frozen seafood dinners under its Winn-Dixie Fisherman's Wharf brand. The dinners, which average $6.99 for a 22- to 27.2-ounce bag, come in six varieties that include Shrimp and Sausage Gumbo.

In addition, Winn-Dixie, Gorton's, SeaPak and Bird's Eye donated a portion of sales to Feeding America: The Nation's Food Bank Network when Winn-Dixie shoppers bought products in March, National Frozen Food Month.

A variety of Tastee Choice seafood entrées, such as shrimp with linguini, are selling well at Heinen's Fine Foods, says Gaul. The meals retail for an average of $6.99 each.

"I believe [steady sales] is because the restaurant business is down, but people are still looking for restaurant-quality food," adds Gaul.

In addition, High Liner Foods' Sea Cuisine line of frozen seafood, including tilapia, salmon, cod and shrimp, has been selling very well in Heinen's stores.

The biggest frozen sales gainer in Casey's Market store is Pacific Seafood's Starfish brand of gluten-free breaded cod and halibut. "One of our best products is a breaded halibut: We are selling tons of it. It is inexpensive, compared to fresh halibut, and Celiac disease is becoming more common," says Lane. The gluten-free branded halibut retails for an average of $11 per 12-ounce box.

While frozen seafood entrées and specialty products are hot, sales of many fish fillets and seafood products are also increasing steadily. Nielsen's "all other frozen, unbreaded seafood items except crab" category, experienced a 12 percent climb in sales to $58.2 million for the 52-week period ending Jan. 25. In addition, sales of unbreaded frozen fish products rose 11.2 percent to $346.6 million during the same time period, according to Nielsen.

United Supermarkets based in Lubbock, Texas, a chain of nearly 50 stores, is finding that consumers are much more interested in frozen plain and breaded seafood items than entrées.

As a result, United has upped its selection of frozen, private-label shrimp, tilapia, catfish and catfish nuggets in its stores that have a higher surrounding population of lower-income shoppers.

"Frozen seafood sales are up. We put 3-pound to 5-pound bags of tilapia fillets and catfish nuggets in the freezer with a price tag and our lower-end customers have been picking those up," says Scott Nettles, director of meat and seafood for United Supermarkets.

United's private-label frozen catfish, supplied by Seattle Fish of New Mexico, has been particularly popular this year because of the price difference compared to fresh, says Nettles. While fresh catfish fillets typically retail for between $5.99 and $6.99 a pound in United stores, the frozen version retails for between $2.99 and $3.99 a pound.

United and other supermarket chains emphasizing their frozen seafood offerings - especially value-priced items - may have the right idea. Lower-income shoppers are the fastest-growing income group in the United States and are expected to generate $84 billion in incremental spending over the next decade, according to a recent IRI report.

"Lower-income households are one of the hottest opportunities in the marketplace and will provide real growth for those who want to truly learn about the micro-segments and their changing behaviors, due to the economy," says Thom Blischok, president of IRI Consulting and Innovation.


Contributing Editor Christine Blank lives in Lake Mary, Fla.


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