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« October 2008 Table of Contents

Top 10 Species: Wild salmon

Buyers warm up to underappreciated species, product forms

Alaska's salmon runs started out slow, but ended higher than expected. But that's not the biggest news in the wild salmon industry right now.

Because of supply and pricing issues in recent years, the species and product forms of Pacific salmon buyers are looking for are changing.

"As a result of the strengthening of prices and the high value of wild salmon, American consumers and buyers are becoming more familiar with the different species," says Laura Fleming, communications director at the Alaska Seafood Marketing Institute in Juneau, Alaska.

For example, because of the fishing closures in California and Oregon and lower runs of king salmon in Alaska this year, some buyers are using more sockeyes and pinks for center-of-the plate applications.

The higher prices of king salmon this year - averaging $8 to $10 a pound for whole 10- to 15-pound fish at wholesale and as high as $30 to $40 a pound for Copper River fillets at retail - some consumers switched to coho, pink and other Pacific salmon species.

"People don't buy as much salmon as they did before. Or, if they bought king before, 
they will buy coho now because it is fairly abundant," explains Jon Speltz, VP and buyer at Wild Salmon Seafood Market in Seattle.

"The king salmon supply took a definite hit and prices for fresh kings jumped dramatically. If you had to have wild king salmon, you had to dig deep into the wallet this year," says John van Amerongen, spokesman for Trident Seafoods in Seattle, one of the nation's top Pacific salmon suppliers.

As a result, sockeye has become more popular among U.S. buyers and consumers.

"We had been looking to increase sockeye demand for a long time. It was traditionally exported more to the European Union and other areas but 
has been more widely expanded in the United States," 
says Fleming.

"Japan used to be the dominant market for frozen sockeye, and they are still a solid customer. But the continued abundance of sockeye in Alaska and our investment in value-added products has allowed us to move more of it to the domestic side," says van Amerongen.

"There has been a pretty substantial increase in the pink salmon supply in the last five years. The high volume species are going more [toward] frozen or fresh product to meet demand, instead of in a can," says Chris McDowell, seafood industry analyst for The McDowell Group in Juneau.

In fact, 80.3 million pink salmon were caught in Alaska through Sept. 12, according to the Alaska Department of Fish and Game. The sockeye runs had also yielded 38.2 million fish by Sept. 12, coho was at 3.4 million fish, and chum had reached 16.6 million fish.

Alaska's total salmon catch had reached 138.8 million fish by Sept. 12, surpassing the 137-million-fish preseason forecast.

Alaska salmon supplies are up this year thanks to healthy salmon runs and government policies, according to ASMI and seafood buyers.

"So far, it is the fourth largest harvest to date. Overall, people were pretty happy with the salmon runs," says Fleming.

"[Alaska is] managing the fisheries so well," says Tom Sunderland, director of marketing for Ocean Beauty Seafoods in Seattle. "The pink salmon runs were lower this year, but I don't think anyone is unduly concerned about it. They believe Alaska is handling it right."

Still, the canned pink salmon industry is increasingly sharing the market with the fresh and frozen fillet market. Half of last year's pink salmon harvest was canned, down slightly from 52 percent in 2006. Pink prices are also expected to jump this year, because the catch was lower than last year's 144-million-fish catch, the third largest haul on record.

"There didn't used to be a lot of pink salmon fillets, but the world has seen what a great value it is," says Sunderland.

As a result, Ocean Beauty has launched two frozen pink salmon entrées with sauce 
and vegetables under its Sea Choice brand.

"The big change in Alaska has been the increase in the ability, or the freezing infrastructure, to produce value-added product forms, such as fillets," says Ocean Beauty's Sunderland.

Trident Seafoods has experienced similar success on the foodservice side with its frozen, fully-cooked pink salmon portions sold under the Redi Grilled brand. The simplicity of the product, prepped and ready for pitas and other entrées, makes it a good seller, says 
van Amerongen.

"It has performed so well in our 4-ounce portion that we're now offering it in a 6-ounce center-of-the-plate cut," he notes.

On the retail side, Trident is realizing success with its vacuum-packed frozen chum portions with Thai chili lime marinade. As a result, the company is developing a full line of "Trident Naturals" marinated fish portions, using a variety of fish and sauces, for supermarket and club store customers.

Portioning has had a positive impact on salmon sales, especially in the foodservice sector.

"Only during the last year or so have we seen advancements in boneless, skinless portions, and many companies are making value-added products that are ready for foodservice and retail," says Fleming.

Nevertheless, suppliers report that the market still demands canned pink salmon.

"The traditional pack with skin and bones in it still does very well," says van Amerongen. Trident is also betting on the success of its Bear & Wolf premium line of skinless, boneless canned Alaska pink and sockeye salmon sold in club stores, after acquiring the Seattle company last year.

Demand remains strong

Despite price pressures over the past year, Americans continue to demand wild salmon, and that is not expected to change in the near future.

"Part of the supply problem is a function of demand. Wild salmon demand around the country is up," says Speltz at Wild Salmon Seafood Market.

In fact, many suppliers said they were not worried about the West Coast closure and the resulting price hikes this year, because that alleviated some of the pressure on demand.

"People were kind of holding back a bit because of gas prices and the economy. It kind of helped create a smaller demand," says Harry Yoshimura, owner of wholesale and retail seafood market Mutual Fish of Seattle.

Basically, people were still eating wild salmon, but not as often, say Yoshimura and others.

Prices remain strong, because the demand for wild salmon exceeds supply, explains ASMI's Fleming. "There is a strong demand for wild salmon, especially since our industry has been responsive to the marketplace's desire for value-added products," says Fleming.

Consumers will still choose salmon for its health benefits, even if it costs more than chicken, beef and other meats.

"Some people are reluctant to part with their money, but if they see a health benefit, they may choose salmon based on that. It is always good to remind sellers that people are not only persuaded to consider seafood because of its flavor, but also because of its potential health benefits," says Fleming.

"Not a week goes by that we don't hear something good about fish oil, and wild salmon fortunately stands out as a natural product that is loaded with it," says van Amerongen of Trident Seafoods.

Part of the high wild salmon demand can be attributed to the growth of farmed salmon.

"One of the things that farmed salmon has done is dramatically increase the [salmon] consumption worldwide," says McDowell (see sidebar, p. 33).

Still, retailers and suppliers are concerned about salmon prices becoming too price-prohibitive.

"California [fishing restrictions] kept prices high. We saw people backing away from it a bit," says Yoshimura. Copper River king salmon was selling as high as $30 to $40 a pound retail at the onset of the fishery in May, he added.

"The catch of Copper River sockeyes and kings was really low this year and prices were high. We just tried to get what we could to our regular customers," says Sue Laird, VP of 
processor Prime Select Seafoods of Cordova, Alaska.

Although some buyers are price sensitive, Prime Select's buyers are willing to pay for top-shelf, custom-processed king and coho salmon from Copper River and other areas.

While some buyers will pay for wild salmon, some may move to farmed salmon if king and other prices remain as strong as they have been.

"Our customers prefer wild salmon, but if prices on wild salmon continue to escalate, I don't have a problem selling less expensive farmed salmon," says Speltz of Seattle's Wild Salmon Seafood Market.

Others are watching the price hoping it does not become too price-prohibitive for shoppers.

"There is going to be an issue if fish gets too expensive," says Sunderland. "Will they pay $10 or $20 a pound? I don't know."

Christine Blank is a business writer and editor in Lake Mary, Fla.