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What's in Store Seafood costs more than beef or poultry, but signs point to a potential leveling. U.S. Department of Agricul- ture estimates. Fortunately, seafood retail- ers that have remained com- petitive on price and offerings will be able to show shoppers that seafood is a better value than meat in some cases — and is also a healthier option. "With beef prices going up, seafood becomes a more cost-effective alternative. We have all kinds of options that are less expensive," says Dan Humphrey, seafood director for Highland Park, Ill.-based Sunset Foods, which operates five stores. However, instead of competing with chains such as Walmart on price, the upscale retailer has found suc- cess with sourcing quality sea- food and training its employ- ees on how to talk to shoppers about seafood. "We need to be like the Parallel proteins Rising commodity costs help seafood compete with beef and poultry on health and price BY CHRISTINE BLANK S eafood retailers have become experts at adapting their busi- ness to the chang- ing economy. Over the past three years, they have slashed costs, increased the value of what they are offering and focused on purchasing fresh, quality seafood. Tese traits should help supermarket seafood depart- ments and fish markets com- pete as commodity and fuel 34 SeaFood Business October 2012 prices rise again this fall. Te U.S. drought this year signifi- cantly impacted crops such as corn and soybeans, so beef and poultry prices are expected to rise as a result. Higher fuel and transportation costs are also expected to wreak havoc on wholesale seafood prices. Overall wholesale food prices have risen 1.4 percent in the past 12 months, according to the Bureau of Labor Statistics, and are expected to increase 2.5 to 3.5 percent through the end of the year, according to old-time fish market. We are selling quality and knowledge and we have a very educated clientele," says Humphrey. Sunset sources directly from family fisheries and recently started a Gulf seafood pro- gram. "After the BP oil spill, we backed off from anything from the Gulf because of peo- ple's perceptions. Now we are getting back into it with snap- per, grouper, swordfish and tuna," says Humphrey. Lawrence Duplantis, the meat, seafood and deli direc- tor for New Orleans-based Robert Fresh Market, which operates three stores, agrees that shoppers may look to seafood as meat prices rise this year. "With the rising beef prices, people will come look- ing for a better value, so they may look at species like catfish and tilapia," says Duplantis. Still, Robert Fresh Market has faced rising wholesale seafood costs and pressure on margins, like most other seafood retailers. "Tere has been some softening on our margins because of the crazy market where we are at," says Duplantis. For example, farmed crawfish is priced around 40 percent higher this season than last, but Robert Fresh Market had to keep its prices low to compete with several supermarkets and su- percenters in New Orleans. More shoppers are moving "With beef prices going up, seafood becomes a more cost- effective alternative. We have all kinds of options that are less expensive." — Dan Humphrey, seafood director, Sunset Foods to seafood away from meat but not because of higher meat prices, according to Scott Nettles, director of meat and seafood for United Super- markets in Lubbock, Texas. "I think the shift will be due to health concerns more than pricing," says Nettles. In fact, United Texas' seafood depart- ment sales have risen around 7 percent this year, compared to last year, while volume has climbed 12 percent. To appeal to shoppers looking for value, United has added more private-label frozen seafood, bulk bags and frozen fish portions over the past year. Tis summer, the chain that operates the United, Amigos and Market Street brands also introduced private-label "Zero Latitudes," 12-ounce 91/110 cooked shrimp and 61/70 raw shrimp. "We are seeing Walmart come in at a cheaper price point for shrimp, so we added the 12-ounce bag that retails at $4.99 each," says Nettles. Despite a 3 or 4 percent increase in overall wholesale seafood costs, United has also Continued on page 50 Visit us online at www.seafoodbusiness.com Photo courtesy of Sunset Foods