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Trend Watch: Recession resilient?
Canned seafood sales may be a bright spot during economic slump
By Lauren Kramer
August 01, 2008
While all companies are dealing with the fallout related to
the nation's economic uncertainty, one seafood segment that
stands to benefit from the troubled times ahead is canned
seafood. Consumers trying to cut back on their grocery bills
may opt for less expensive canned seafood, priced between $3
and $9 per pound of protein, and forego fresh seafood.
Canned seafood consumption has been stagnant over the past
few years, according to the National Marine Fisheries Service.
Per-capita canned seafood consumption totaled 3.9 pounds in
2007, down from 4.7 pounds in 2000. Per-capita consumption of
fresh and frozen seafood has increased from 10.2 pounds in 2000
to 12.3 pounds in 2006 (see Newsline, p. 8).
Opting for canned seafood in an economic recession gives
consumers maximum nutritional benefit while saving money. But
the trend toward canned over fresh and frozen seafood may not
be revealed until 2007 consumption data is available, according
to Alan Lowther, a survey statistician with NMFS.
Larry Andrews, retail marketing director for the Alaska
Seafood Marketing Institute, agrees that it is too soon to
gauge the recent economic impact on canned seafood consumption
numbers.
"The canned seafood category has undergone a number of
changes in terms of product forms over the past few years, and
all those changes have some impact on the results we may be
seeing," he says.
Andrews points to canned salmon as a prime example of a
format in flux. "You're getting into more skinless, boneless
product and smaller can sizes, with a move away from
14.75-ounce to 7.4-ounce sizes," he says. "Pink salmon is
increasingly being sold in pouches containing fillet forms, so
you can buy a pre-grilled or pre-spiced fillet portion. That
will have some impact as consumers move into that category and
become more familiar with it."
The ways in which canned seafood are being used are also
changing, according to Andrews.
"Younger consumers are using it on salads or omelettes or
breakfast frittatas. It's becoming an ingredient in another
dish that may become the center-of-plate dish," he adds.
With a household penetration of 70 percent, canned tuna
dominates the canned seafood category, and San Diego-based
Bumble Bee Foods believes economic conditions will be driving
consumers back to the center aisle.
"We definitely believe there's a correlation between the
economy and consumers' food purchases," says Dave Melbourne,
senior VP of consumer marketing at Bumble Bee. "At the end of
2007, 41 percent of consumers said they would be eating out
less and doing more things at home. Historically, when there's
a downturn in the economy, we do see an increase in the sales
of dry food, and tuna specifically is a destination
category."
With a household penetration of 20 to 30 percent, canned
tuna consumption has nevertheless been on a downward spiral
since 1984, says Harry Balzer, VP at the NPD Group. "That
indicates there are larger forces at play than purely economic
issues, foremost among which is convenience," he says. "The
trend in this country has been toward packaged meals, not just
packaged foods like canned tuna, which requires some degree of
preparation."
Both as a brand and an industry player, Bumble Bee is
focusing on the healthy, nutritious properties of tuna, and the
fact that it is low in calories and fat and high in omega-3
fatty acids.
"With two-thirds of our population overweight, there's a
real focus on healthy eating options," Melbourne says. "And
consumers are nostalgic about their tuna. It's a fast,
convenient, portable meal solution and one they grew up
with."
Bumble Bee data indicates that 52 percent of consumers use
tuna in a sandwich, and 22 percent use it in a salad. "There
are so many different ways consumers can use this affordable
protein solution," he adds. "It's up to the industry to educate
consumers on the versatility of these products and their health
benefits."
Both Bumble Bee and Chicken of the Sea are focusing their
marketing efforts on the healthful, convenient aspects of
canned tuna.
"As people are watching their pocketbooks but still
interested in meeting their health requirements, canned and
pouched seafood become increasingly popular choices," says John
Sawyer, senior VP of sales and marketing at Chicken of the Sea
International.
But as food prices rise, canned seafood is not exempt.
"We've raised our prices marginally, primarily due to the
rising cost of goods," says Sawyer. The average price of tuna
at retail was up 2.6 percent in 2007.
"Just as all food companies are being faced with rising
costs, we've seen increases in the price of fish, fuel, steel
and many of our input costs," says Melbourne. "Still, it's
important to understand that canned seafood, tuna specifically,
is an incredible value - affordable, for a healthy, nutritious
protein solution."
The question marketers need to ponder is how to gain new
customers who are pinching pennies.
"Fifty cents of every dollar spent on food goes to a
restaurant, so we know that eating out will be the first thing
Americans moderate," says NPD's Balzer. "But when they go to
the supermarket, the question is, what will they buy? Any food
price that's not moving as rapidly as our income will have the
natural advantage. Canned seafood, an already popular category,
is something we're very familiar with so it will have a natural
advantage over this time. But the long-term question is, will
it remain a packaged food or will it become more of a packaged
meal?"
Contributing Editor Lauren Kra m er lives in British
Columbia