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Surimi big retail winner in 1990 in otherwise dull frozen fish case.

Surimi Big Retail Winner in 1990 In Otherwise Dull Frozen Fish Case

Breaded fish sticks and breaded shrimp also posted small gains in USA, while every other seafood category headed south. Pricing elasticity, undifferentiated products and soft brand loyalty blamed for slide. Rationalization needed now to stem tide.

"Lackluster" was the way Dr. Roger Anderson described the performance of the retail frozen fish sector in the USA for the past 12 months. Only surimi products fared well during the period, he told delegates attending the Boston Seafood Show, as it pushed the "All Other Frozen Fish" category up 19%.

The Lakeland, Florida-based vice president of Bee Gee Shrimp, citing SAMI statistics, put total retail frozen seafood poundage at 29 million in 1990, down 5.5% from the 30.7 million moved the previous year. The dollar value slipped 1.7%, going from $1.034 billion to $1.016 billion.

Big losers percentage-wise were: raw unbreaded fillets, down 20.5% from 3.2 million pounds to 2.5 million; peeled shrimp, off 13.6% from 1.7 million pounds to 1.4 million; frozen entrees, sliding 13.1% from 4.4 million pounds to 3.8 million.

Other than surimi, the only product groups to post gains were breaded fish sticks, up a scant 1.4% from 8.1 million pounds to 8.2 million, and breaded shrimp, rising 2.9% from 1.3 million pounds to 1.4 million.

Anderson suggested that manufacturers will have their work cut out to convince retailers that frozen seafood product facings should be allowed to hold on to their traditional shelf space. And purveyors of fresh fish will find themselves in the same boat, as supermarket operators have discovered that most service cases are a drag on the bottom line.

"For all their glamour, it has been the exceptional (fresh fish) program that has turned a consistent profit. Labor costs and shrink remain eternal obstacles," said Anderson.

NatSea's View

Mike Yurchesyn of National Sea Products, Halifax, Nova Scotia, Canada, shared a similar view of the slumping frozen retail seafood category, although his figures varied somewhat from numbers put out by SAMI. He pegged the overall decline at 7%, with each of the three top segments (which represent 75% of the total category) down. Battered and breaded portions suffered a 7% setback, while frozen raw fillets fell a whopping 22%. Even fish stick volume was off slightly.

Yurchesyn cited high pricing elasticity as one of the key reasons for the problem. Small shifts in prices are thought to cause consumers to switch to other brands and different food groups. Little product differentiation makes for little brand loyalty, it seems.

"Frozen seafood has just not kept up with other frozen foods in the areas of new product development and brand positioning," said the NatSea executive. "As a result, competitive strategies are almost totally based on pricing tactics."

This issue has loomed even larger in recent months as tighter supplies of raw materials have put upwards pressure on producer costs. Traditional finfish species like cod and haddock are especially high in price. Ocean perch, on the other hand, has had a more stable supply but demand for frozen packs over the past year has diminished.

"For all intents and purposes, cod fillet blocks have priced themselves out of the retail frozen seafood market, and now have little or no use in secondary processing," said Yurchesyn. "Pollock blocks and minced have picked up much of the slack, but prices for these products continue to escalate."

Some processors have responded by making large scale conversions to less expensive minced products and by downsizing packs without implementing price reductions. There has also been more importance placed on "value pack" sizes and positionings. However, little promotional support has been dedicated to the raw fillet segment because of low profit margins and anticipated supply problems.

What to Do

Yurchesyn urged the industry to begin seriously focusing on finding ways to build real value back into the category. And he called on retail buyers to act as category managers in their approach to allocating freezer space.

"Today there are simply too many undifferentiated products competing for too small a consumer base," he said. "By rationalizing their product offerings, buyers can create a concise impression of the category for their customers and eliminate the typical shelf problems associated with slow moving items."

The National Sea executive admitted that in some cases this may mean reduced frozen seafood sections in supermarkets. "If we want to prevent this reduction," he reasoned, "we better develop the products necessary to get consistent consumer takeaway." [Tabular Data Omitted]
COPYRIGHT 1991 E.W. Williams Publications, Inc.
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Title Annotation:QFFI's Global Seafood Magazine
Publication:Quick Frozen Foods International
Date:Apr 1, 1991
Words:769
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