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Seafood FAQ: Restaurants benefit from falling fuel prices

Procuring quality seafood, product availability, rising wholesale prices are major chef concerns

Diners are most concerned about the freshness and
    quality of the seafood they order. - Photo courtesy of Up the Creek Fish Camp &
    Grill
By Steven Hedlund
December 01, 2006

Product availability and escalating wholesale prices are the two biggest challenges seafood restaurateurs face, according to SeaFood Business' biennial foodservice survey.

But that hasn't stopped them from maintaining or increasing seafood sales. The vast majority of survey respond-
ents say they're menuing as much - or more - seafood this year versus 2005.

That's encouraging, particularly in the face of fluctuating fuel prices, which boosted seafood-distribution costs. Fuel is the lifeline of the seafood industry, as nearly 90 percent of the U.S. seafood supply is imported and distributed throughout the country.

In addition to fluctuating fuel prices, wholesale prices of several key species, including king salmon, halibut and American lobster, were up this year, due largely to increased demand.

"It's not just one or two items that have gone up [in price]," says Joe Monteiro, executive chef and general manager of A Fish Called Avalon in Miami Beach. "It's just about everything."

Seafood accounts for 90 percent of the menu items at A Fish Called Avalon, a 200-seat upscale restaurant. Tuna Tartare and Jamaican Jerk Grilled Grouper are two of the restaurant's best-selling dishes.

"I'm trying to increase profits in other areas, like wine," to compensate for rising seafood prices, says Monteiro. "I'm constantly asking myself, 'What can I do to reduce costs?'"

Seafood prices are going up, but fuel is becoming more affordable. Oil prices tumbled from a high of more than $78 a barrel in July to an 11-month low of $57 in October.

Lower gas prices translate into more disposable income for luxuries such as dining out.

Fishermen and sea-food distributors have yet to pass any savings onto Monteiro. He buys local seafood from fishermen whenever possible to keep prices down.

Bill Bayne, founder, president and CEO of Neighborhood Ventures in Dallas, which operates 12 Fish City Grill restaurants in Texas and Oklahoma, uses a "chalkboard" menu of daily specials to help his chefs manage rising seafood prices. The chalkboard menu, which represents about 40 percent of a restaurant's total sales, gives chefs the flexibility to pass on highly priced seafood.

"If sea bass is outrageously priced," says Bayne, "we move on to halibut."

Everyday menu items such as shrimp are contracted a year in advance to guarantee stable pricing. Shrimp, farmed Atlantic salmon, tilapia and catfish are Fish City's best-selling species.

In addition to managing rising seafood prices, satisfying diners' growing appetite for the protein is a challenge for restaurateurs. More than half of survey respondents cited product availability as one of the three biggest challenges they face; it was selected by the greatest number of respondents.

When asked what the biggest problem they encounter when sourcing seafood, 31 percent of respondents picked product availability; again, it was the respondents' top selection.

Procuring quality seafood is also a major concern. When asked what they look for in a supplier, a convincing 87 percent of respondents cite quality (up to three answers were selected).

"Our biggest issue is keeping quality product in our house," says John Keener, founder and owner of Charleston Crab House, with three restaurants in Charleston, S.C., and one in Columbia, S.C. "I get quality in here first. I worry about price second."

"It's getting harder and harder 
to get [quality] seafood," adds Monteiro.

Keener says the key to consistently procuring quality seafood is finding reputable suppliers.

"Once I find them I stick with them," says Keener, who deals with three to four brokers. "The key to the business is finding good brokers because they find good suppliers, and you can concentrate on serving food. If you don't trust your broker, you need to find a new broker."

Sustainability and health

Sourcing seafood from sustainable resources, where the rate of harvest doesn't exceed the rate 
of regeneration, also concerns Keener.

"I'm an avid supporter of using sustainable seafood and local seafood," says Keener, who a few years ago removed swordfish, mako shark and Chilean sea bass from his menu due to sustainability concerns.

He's not alone. Nearly half of survey respondents (47 percent) cite sustainability as one of the three biggest challenges they face when sourcing seafood.

But only 9 percent of respondents say their customers worry about sustainability. Nearly three-quarters of respondents (73 percent) say freshness and quality is a common concern among their patrons, while 55 percent cite taste and 50 percent name price (multiple answers selected).

Diners are also watching their waistlines, and that benefits seafood, which is low in saturated fat and high in omega-3 fatty acids. More than one-third of respondents (36 percent) say preparation is a common concern among their patrons, while 20 percent cite health and nutrition.

What's more, 37 percent of survey respondents are menuing more seafood-topped salads, while 
22 percent are offering less 
fried seafood.

Keener hasn't decreased his fried seafood selections, but on Nov. 15 he's switching from hydrogenated oil to cottonseed canola oil, a healthier option because it's free of trans fat (see Newsline, p. 8). He says his customers are increasingly health conscious.

"How I prepare and how I 
handle seafood is the key to 
making our customers happy," says Keener.

Shrimp, crab cakes (blue crab) and snow crab are Charleston Crab's best-selling species.

In just the past six months, an increasing number of Fish City's patrons are asking for the nutritional information of its menu items, especially via the chain's Web site, says Bayne. Fish City makes nutritional information available upon request in each restaurant.

"We never used to get requests," says Bayne. "Now we get quite 
a bit."

 

Methodology

This marks the 19th year SeaFood Business surveyed its foodservice readers. The survey was mailed, faxed and e-mailed to 2,000 SFB foodservice readers in September. A total of 190 surveys were returned, for a response 
rate of 10 percent. Surveys 
were analyzed by Diversified Business Communications' market research staff.

Respondents comprise independent restaurateurs (64 percent), chain restaurateurs (20 percent) and institutional operators (16 percent) and represent a variety of concepts, including dinnerhouse/casual dining (45 percent), white tablecloth (26 percent), cafeteria/institutional (12 percent), fast-casual (9 percent), quick service (3 percent) and other (5 percent). They are located in the Northeast (34 percent), South/Caribbean (30 percent), West (23 percent) and Midwest (13 percent).

Most respondents (42 percent) reported annual sales of $1 million to $5 million, while 36 percent posted annual sales of more than $5 million and 22 percent less than $1 million.

 

Associate Editor Steven Hedlund can be e-mailed at shedlund@divcom.com

 

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