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Frozen seafood cabinet again darling of profit-minded supermarket operators.

Frozen Seafood Cabinet Again Darling Of Profit-Minded Supermarket Operators

So-called |fresh' fish merchandising is losing appeal. From orange roughy to Alaskan cod, retailers are vacuum packing frozens with renewed vigor. Value is what shoppers want.

A sea-change away from so-called fresh fish and back to the aggressive merchandising of frozen products continues to rise throughout the Western world. This is especially so on the highly competitive USA supermarket front where sharp-penciled, recession-minded retailers are carefully scrutinizing operating costs and bottom lines.

But before the current economic slowdown put a cramp on discretionary consumer spending, a return to value-oriented shopping habits had become apparent in many of the nation's seafood outlets. Consumers are thinking twice about paying premiums for fish flown in from far-away places when frozen species are available at much more affordable prices.

"In the past two years we have experienced more growth in frozen self-service than in either refrigerated service or self-serve. We are vacuum packaging frozen seafood in all our stores and selling it frozen," advised Tim Kean of Pay Less Super Markets, Inc., Anderson, Indiana.

"Many of our customers have told us they prefer to buy seafood frozen because it enables them to shop today for a meal to be enjoyed later in the week," he told delegates attending the recent Food Marketing Institute-sponsored Seafood Merchandising Conference in Williamsburg, Virginia.

Pay Less runs nine stores in land-locked middle America. But geography has not prevented its clientele from satisfying a rather sophisticated appetite for seafood variety. Kean sees to it that, among other species, stocks of Australian orange roughy, Alaskan pollock and cod, and Atlantic Ocean perch are usually on hand. Most of the product is procured in frozen form, although some of it ends up being thawed and merchandised from refrigerated cabinets.

While the majority of sales are generated through refrigerated service cases, Kean pointed out that volume is not growing in this sector. However, sales from frozen self service cabinets continue to advance and boost profitability accordingly.

This comes as no surprise to Lance Singleton, corporate manager of seafood merchandising for Fleming Companies, Inc., Oklahoma City, Oklahoma. "Frozen features more stability in pricing and definitely gives more flexibility in marketing," he commented. "Another positive feature lies in the logistics of distribution. The integrity of the product can be controlled because it is frozen. Also, there's less shrink."

The key word is consistency, he added. "Frozen fish offers a consistent value, which is what the consumer is looking for."

Drip Factor

Just how big a factor can drip loss be?

Pay Less Super Markets tested samples of frozen fillets and found that over 16% of original de-glazed weight was lost in three days' time. "If that product was sold under refrigeration and the drip loss was not known, and compensated for, a lot of potential profit would be lost," said Kean.

One thing is certain, though. Buying frozen fish and selling it frozen, or even after it's thawed out under refrigeration, greatly reduces throw-away and handling losses as well as curbs inventory and drip problems. Another plus is that frozen shipments are more convenient to receive at the back door than are so-called fresh products.

"Overall, we have much better control of our operation and our numbers from handling frozen seafood," stated Kean.

A big advantage in keeping costs down is realized through reduced labor requirements. And overhead is less, since frozen packs tend to sell themselves. Properly merchandising fresh fish, on the other hand, requires costly counter help to transact business.

While it tends to be more expensive to package frozen fish in the store than to wrap refrigerated product, it is justifiable when one considers the savings realized from product loss reduction. On-site vacuum packaging generally runs about 3.5-cents per unit versus .5-cents for overwrapping.

Sell the Sizzle

Richard Catanzaro of Mayfair Supermarkets Inc., Elizabeth, New Jersey, called on retailers to "sell the sizzle" of frozen fish as well as price, quality and convenience attributes. Don't promote flounder fillets, he implored, but instead push fresh hand-cut Georges Bank Grade A flounder fillets. And rather than offer plain old catfish fillets, try heralding them as farm-raised Grade A catfish fillets.

"Sell the meal, not just a piece of fish," intoned the seafood merchandising director. "And remember that the display of your frozen fish case is a major contributor in the purchaser's decision-making process."

Supermarket operators must make sure that their personnel know what they are showcasing. "The product mix today consists of a very large portion of frozen or previously-frozen seafood," he stated. "As you walk through the |fresh' display, you are most likely to see defrosted orange roughy, hoki, swordfish, mako, surimi, value-added items and cooked and raw shrimp."

Catanzaro urged retailers to advertise and champion frozen seafood as a category segment second to none. "After all, which is better," he asked, "unfrozen fish that arrives in port once the catch is maximized, or fresh-frozen seafood that has its flavor locked in within hours of the catch?"

As a matter of fact, he added, one should be very proud to promote sashimi grade frozen fish, if indeed that is what is being offered. Never stored at above -- 40 [degrees] F (the temperature of dry ice), such product meets the Japan Clippership Association's stringent criteria for freshness, texture and taste required of fish intended to be eaten uncooked.

Another New Jersey retailer, David Lewis of Clementon-based Zallie Supermarkets, said that the quality of frozen fish will remain well preserved at -- 29 [degrees] F. "But if you buy it frozen, you should sell it frozen," he insisted.

The seafood merchandiser said that store managers have to become more conscious of the ways they pack fish in-house for display. "Overwraps are user-friendly," he commented, "while the sales of vacuum packs can be hurt by frost build-up. This is also true with polybags."

Lewis said that the growth of membership club stores on the American retail scene should prompt conventional supermarkets to consider carrying bulk- or institutional-size packaging to cater to bargain-hunting shoppers.

He also suggested that a section of the frozen display case be designated for individually-wrapped fillets or single see-through packs. Each should be hung on pegs to provide maximum visibility and avoid flat stacking which tends to bury product at the bottom of cabinets. "You may have to punch your own holes in the bags," he said, "but this will result in more sales being punched up at the cash register."

Red Hot for Frozens

On the foodservice front, frozens figure very much into the $1.4 billion in annual sales realized by America's largest complete-service dinnerhouse operation. "It is through consistent quality of our frozen foods that we are able to meet our quality and value objectives," pointed out Jeff Suber, director of commodity purchasing for Orlando, Fla.-based General Mills Restaurants Inc., parent of the Red Lobster chain.

Running more than 500 outlets in 42 states, the company served about 70 million pounds of seafood to over 110 million customers last year. "As we plan to expand by 80% by the year 2000, the opportunities are obviously significant for the frozen food industry," Suber told delegates attending the National Frozen Food Convention in the USA recently.

The Red Lobster executive warned, however, that raw material costs must be held to reasonable levels if real growth is to continue. "Consumers are demanding a better price-value relationship," he said. "They are willing to pay only so much . . . They also expect variety and service. And good old-fashioned consistency is the glue that binds things together."

Meanwhile, Red Lobster buyers will travel to at least 33 countries this year in search of seafood. They plan to purchase about 100,000 tons of various species, of which 90% will be center-of-plate fare shipped in frozen form. All totaled, that will translate to more than $300 million in business for suppliers worldwide.

PHOTO : "If you buy it frozen, you should sell it frozen," insists David Lewis (l) of Zallie Supermarkets, Clementon, N.J. Listening in are Tim Kean (m) of Pay Less SuperMarkets, Anderson, Ind. , and Richard Catanzaro of Mayfair Supermarkets, Elizabeth, N.J.
COPYRIGHT 1992 E.W. Williams Publications, Inc.
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Title Annotation:includes related article
Author:Saulnier, John M.
Publication:Quick Frozen Foods International
Article Type:Industry Overview
Date:Jan 1, 1992
Previous Article:Dutch, Belgian fish sector stay course notwithstanding shortage of Dover sole.
Next Article:'Force'= customer is always right, Young tells Int'l Seafood Conference.

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