« April 2007 Table of Contents 
Top 10 Species: Crab
Market heats up as more players enter the domestic and imported king crab trade
By Rick Ramseyer
April 01, 2007
If you're a buyer or seller of king, snow or Dungeness crab,
you've probably already scrapped your playbook from the past
couple
of years.
Prices for red king crab have fallen in domestic markets, in
large part due to a huge jump in Russian imports that have U.S.
seafood representatives questioning the legality of some of the
harvest.
Depleted inventories of frozen snow crab in early 2007,
meanwhile, coupled with the snail's-pace start of the opilio
season in Alaska, kept prices aloft pending the April launch of
Canada's Atlantic snow crab fishery.
And the Dungeness crab catch on the West Coast is a far cry
from the record hauls of the past few years, resulting in tight
supplies and sky-high prices.
In addition to those disparate issues, several industry
stakeholders have unveiled marketing initiatives to promote
crab, while a well-known blue-crab processor - Phillips Foods -
has introduced pasteurized king crabmeat for foodservice
operators.
The bottom line? Look for the crab market to heat up in the
months ahead.
Royal pain
Alaska's 2006-07 Bering Sea red king crab season, which got
under way Oct. 15, wrapped up in November with a total
allowable catch of 15.5 million pounds, a 15 percent decrease
from 2005-06, according to the Seafood Information Service in
Juneau. It was the fishery's second year under an individual
fishing quota (IFQ) system, which replaced the three-day,
derby-style format of previous years.
The dip in domestic production has been more than offset by
a flood of product from Russia. Indeed, from January through
December 2006, imports of Russian king crab, much of it from
the Barents Sea, surpassed 56.3 million pounds, a dramatic
climb from the 37.5 million pounds imported in 2005, according
to the National Marine Fisheries Service.
Not surprisingly, that abundance has resulted in retail
prices of up to 25 percent lower for king crab, leading some
U.S. seafood leaders to question the lawfulness of Russia's
harvest.
"We know the volume is in the neighborhood of 30 million
pounds of [illegal] product," Arni Thomson, director of the
Alaska Crab Coalition in Seattle, told the news Web site Alaska
Report last year.
Moreover, industry representatives say that since crab is
considered a processed item, and thus exempt from County of
Origin Labeling (COOL) requirements, some Russian product is
being marketed as Alaska king crab, inadvertently or not.
"We've worked hard to brand Alaska king crab, and it's on
lots of menus, especially in fine-dining," says Laura Fleming,
communications director for the Alaska Seafood Marketing
Institute in Juneau. "But it would be interesting to know how
much of that crab is actually from Alaska.
"It's up to the vigilance and the integrity of the people
who are supplying and purchasing seafood," Fleming adds. "What
separates Alaska king crab from other products is it's
carefully managed for sustainability. So there are more things
[to consider] than price."
F.W. Bryce in Gloucester, Mass., owned by Nippon Suisan
(USA), is projecting to sell 1 million pounds of red and brown
kings this year. And though the company currently uses Alaska
product, it also intends to source from Russia.
"Our purchasing of product is very detailed, with
independent inspections to make sure the product is right,"
says Keith Moores, president of F.W. Bryce.
Some seafood businesses nonetheless only handle crab from
Alaska. The Crab Broker in Las Vegas derives the lion's share
of sales from the red kings it supplies to upscale restaurants
and specialty retailers.
"I probably sell into 40, 45 states," says Rob George,
president, estimating he provided 275,000 pounds of frozen
Bristol Bay red kings and another 90,000 pounds of fresh crab
to customers like Bob Chinn's Crab House in Chicago, the Red
Eye Grill in New York and Joe's Stone Crab in Chicago and Las
Vegas, plus grocers like Wegmans, Whole Foods and Ohio-based
Dorothy Lane Markets.
Despite some companies' Alaska-only stance, it's clear the
Russian-fueled profusion of crab has resulted in bargains for
red kings, which generally are considered a luxury item. One
recent industry report cited prices in Seattle supermarkets as
low as $6.99 per pound for small king crab legs and $9.99 to
$11.99 per pound for large legs.
Christian Limberg, national sales manager for Harbor Seafood
in New Hyde Park, N.Y., which sources red and brown kings from
Alaska and Russia, as well as snow crab from Alaska, Canada and
Russia, says lower-than-usual prices resulted in small kings
being priced at or below snow crab prior to the kickoff of
Canada's East Coast opilio season. In late February, for
instance, several retailers were selling small king crab legs
for $5.99 to $6.99 per pound.
"That's a slam dunk," Limberg says. "It opens up [retail and
foodservice] applications for king crab that weren't available
before."
New products, promotions
The king crab category is
getting more competitive these
days with new players, products and promotions.
Phillips Foods in Baltimore, a longtime provider of
blue-swimming crab, last month unveiled a 1-pound plastic
container of pasteurized king crab meat for foodservice
applications.
"Our intention is to create a new category of use and
demand," says Honey Konicoff, VP of marketing.
Phillips, which initially is sourcing Russian red kings from
the Bering Sea and is processing the crab at its own plant in
Vietnam, also plans to introduce three retail options in late
May: a 1-pound metal can; a 1-pound plastic tub with shrink
sleeve; and an 8-ounce shrink-sleeve plastic tub.
"It's a combination of leg meat as well as shoulder and
knuckle meat," says Konicoff, citing potential uses in sautés,
pasta, salads and as an appetizer. (The crabmeat will be used
in Phillips' seven full-service restaurants.)
"We anticipate the price will be comparable to jumbo lump,"
Konicoff says. (In late February, 16-ounce cans of jumbo lump
blue crab from Thailand/Indonesia were selling for $16.25 to
$16.50, according to Urner Barry Publications in Toms River,
N.J.)
Another new player on the scene is Ocean to Ocean in
Virginia Beach, Va., owned by Icelandic USA. In December, Ocean
to Ocean received its first shipment of Russian king crab, and
"we expect to handle three or four truckloads in 2007," says
salesman Robert Bajek. The crab will be available under the
Neptune brand.
New marketing efforts in the crab category also are under
way. ASMI is ratcheting up promotion of Alaska shellfish, which
accounts for 1 percent of the volume of all Alaska seafood, yet
11 percent of the value.
Crab, in fact, is the focus of one of the three ASMI-funded
television ads that feature actor and comedian Ben Stein. The
crab-tailored ads, which aired last year to coincide with the
king and opilio harvests, may run again
in 2007.
Further, ASMI continues to forge foodservice partnerships.
Rockfish Seafood Grill of Plano, Texas, for example, is
participating in a "crab craze" promotion at its 16 restaurants
in Texas, Arizona, New Mexico and North Carolina. Between Feb.
21 and April 8, Rockfish customers can choose between five crab
dishes, including an Alaska king crab entrée.
"We are excited to offer our customers wild Alaska king crab
because it is an exceptional product and has a great story,"
says Rockfish marketing director Aaron Horton, a reference to
the crab's awe-inspiring harvest.
ASMI additionally taps that excitement with a new
foodservice brochure that touts Alaska crab's sustainability,
flavor and versatility, using dramatic photos showing fishermen
hauling pots in heavy seas. A February news release announcing
the brochure carried this headline: "40 Ft. Swells, 20 Hr.
Shifts, 700 Lb. Pots, Countless Great Dishes."
Pining for opilio
Snow crab is a mainstay on menus at U.S. casual-dining
chains and buffet houses, as well as in supermarkets around the
country. Most of that product comes from Canada, with a smaller
amount from Alaska.
The 2006-07 Bering Sea opilio fishery opened Oct. 15 with a
total allowable catch of 36.5 million pounds, a 2 percent drop
from the previous year. Despite the fall kickoff, most
harvesters waited until mid-January or later to begin fishing,
in part because of the concurrent Pacific cod season. Moreover,
a fire aboard the F/V Steller Sea, a major floating crab
processor, kept January snow crab landings low.
"There were boats out there that had crab, but they had to
bob in the ocean for two or three weeks waiting for the Stellar
Sea to come back online," says George of The Crab Broker.
With frozen crab inventories running on empty since late
last year - and some fishermen not expected to deliver product
until last month - one Northwest seafood processor set a base
ex-vessel price of $1.52 for the 2007 season, a big boost from
the preliminary 2006 price of 84 cents.
At press time, meanwhile, seafood buyers awaited the start
of Canada's East Coast snow crab fishery, which last year
brought in 195.8 million pounds of opilio. But Canada's quota
is declining - it totaled 220.6 million pounds in 2005 - and
further cuts may be announced for 2007.
F.W. Bryce, which last year sold in excess of 6 million
pounds of snow crab, most of it from Canada, is projecting to
sell 8 million pounds in 2007, much of it destined for retail
and ca-
sino customers.
"Snow crab is our second-largest item, behind farm-raised
salmon," Moores says.
And though pre-harvest prices remained high, Moores says
they don't accurately reflect the market, since up to 70
percent of Canada's snow crab production is committed to
existing foodservice and retail programs.
"A large majority of Canadian production is programmed, and
those are going off of a price that was secured probably at the
end of May, early June last year," Moores says. "So they could
still be executing at maybe $1 to $1.50 below the [current]
price."
Dungeness down
It's easy to understand buyers' disappointment with this
season's Dungeness crab harvest. In Oregon, where Dungeness is
the most valuable fishery for a single species, the catch has
fallen markedly after landmark hauls the past two years of 27.6
million pounds and 33.6 million pounds, respectively.
In late February, landings stood at 12.5 million pounds, and
by season's end in April could reach 14 million pounds - a
level that industry officials stress is still above the
historical average of 11 million pounds.
"It's a cyclical fishery, and right now we're on the down
side of it," says Hugh Link, interim administrator for the
Oregon Dungeness Crab Commission in Coos Bay.
The less-robust Oregon catch mirrors the climb-and-decline
cycle in other areas. California hauled in a record 24.8
million pounds in 2004, while Washington's harvest peaked at 34
million pounds in 2003 before dropping to 15 million pounds in
2004.
Dungeness imports also have eroded. For 2006, the United
States brought in about 339,000 pounds of the crab, down from
826,700 pounds a year ago. Of that, Canada's contribution
plummeted to just 137,000 pounds after supplying nearly 743,000
pounds two years ago.
Prices, of course, have risen accordingly. "Last year,
Dungeness crabmeat prices stayed fairly steady; this year they
appear to be going up rapidly - I've heard as high as $16 a
pound wholesale as of March 1," Link says. "And ex-vessel price
to the boats from some of the major processors has gone up to
$3.05 since last week after starting at $1.60."
Early last month, King's Fish House in California had live
Dungeness crab selling for $29.50, while Pure Foods Fish Market
in Seattle listed three frozen Dungeness crabs for $66 over the
Internet.
"When you come into a year like this, with less Dungeness
available, you want to make sure you keep product on the menu
and in the stores where you market the hardest," says Link,
citing casinos in the South and along the Gulf Coast as
examples. "Then, when we have another good year, those doors
are still open for us."
All told, given the commotion in the crab category, it's
little wonder there's a bit of uncertainty in the marketplace.
That leads Limberg of Harbor Seafood to offer some friendly
advice.
"Buyers should stay in close contact with their suppliers so
they don't get caught at the top or bottom of the market," he
says. "I can't remember in years past it being this crazy."
Find other SeaFood Business articles with crab here.
Contributing Editor Rick Ramseyer lives in Cumberland,
Maine