Chill Factor

Popular with value-conscious consumers, frozen seafood posts strong sales and is poised for continued growth.

Demands for variety, convenience and a good deal are much on the minds of shoppers purchasing what often has been called "brain food." Frozen seafood is so cool it's hot, and sales trends indicate traditional grocers stand to benefit most from consumers' appetites for flavor and easy-to-prepare delicacies from the deep.

"Value-added items are the craze. Consumers have less time to prepare meals, so they look for convenient frozen products," says Daniel Humphrey, seafood director for Highland Park, Ill-based Sunset Foods, which operates four supermarkets in Chicago's north suburbs. "Marinated and breaded fish items that are ready in minutes seem to sell."

That's an observation backed up by Chicago-based market research firm Mintel, which points to the growth in value-added, pre-seasoned frozen seafood products that aim to replicate a restaurant experience for busy consumers who have curtailed their dining out for economic reasons. "With families being pulled in many directions, and many two-income households, the idea of having to wait in line to buy seafood is not very appealing," Mintel says in its recent seafood report. "Frozen products can also more easily replicate the dining-out experience by offering similar products and flavors that consumers enjoy when eating out."

The frozen segment grew 6.6 percent during 2008-10, with total U.S. sales reaching $5.4 billion in 2010, according to Mintel, which expects the segment to reach nearly $7.4 billion nationwide by 2015.

In fact, sales of frozen seafood have continued on a steady upward course over the past five years. Total dollar sales of frozen fish, including breaded and unbreaded products, approached $821 million for the year ending Nov. 27, 2010, at food stores with at least $2 million in annual sales (excluding supercenters), according to data from Schaumburg, Ill-based Nielsen. That's nearly 16 percent higher than the same period a year earlier, and more than 48 percent higher than the same period in 2006.

Nielsen reported sales offrozen shrimp for that period at more than $1.03 billion, up 4.3 percent, with all other frozen seafood up 8.4 percent to just over $117 million.

"In light of recent economic turmoil, and a still struggling economy, consumers have been much more cautious in how they spend their money," says Corey Henry, VP of communications at the McLean, Va-based American Frozen Food Institute. "As prices of frozen seafood are typically much less than fresh seafood, frozen seafood is increasingly being seen as a much more appealing product to consumers."

Humphrey says he's seen sales of less expensive frozen alternatives increase. "Because prices on fresh fish have risen so much, our sales are slightly up but tonnage is down, which shows we are selling less fresh fish, just at a higher price," says Humphrey, noting that most of Sunset Foods' marketing efforts for frozen products are directed at seasonal fish items that are only available frozen in the off-season, such as wild salmon, halibut and king crab.

Shooting Fish in a Barrel

Grocery and specialty food stores stand to cash in the most on frozen seafood's hot streak. The grocery and specialty food store channels posted 2010 sales of more than $12 billion, roughly four times those of supercenters and warehouse clubs, which is the next-closest channel, according to Mintel: "The grocery and specialty food formats also benefit in this category from a halo effect created by the fact that shoppers are already comfortable buying fresh meat in these outlets, so it is an easy transition to buy fresh fish and seafood here as well."

That also could be why restaurants, seeking to shore up recession losses, are increasingly breaking into the supermarket channel.

Henry points to a December 2010 Packaged Facts report noting that restaurants are venturing into different consumer markets, including selling restaurant-style meals in supermarkets. "With this occurring more frequently, the lines between the frozen food industry, the restaurant industry and the retail fresh-prepared convenience food market are breaking down," he says.

Shrimp and salmon are two of the fastest-growing fish and seafood entrées appearing on restaurant menus and are a key part of this segment as well, Mintel notes.

Some of the new products following this trend come from seafood dining chain Joe's Crab Shack, which has teamed with Gourmet Express to launch a line of frozen eat-at-home meals to be sold at 900 Walmart stores nationwide. Revealed late last year, the initial product launch includes four seafood entrees that steam in the microwave in less than 10 minutes. Touted as containing "simple ingredients and no fillers or additives," the dishes contain zero trans fat and are rich in omega oils, with three of the four meals gluten-free.

Kicking off the line are cod with Cajun lemon butter sauce, parmesan basil orzo and petite green beans; salmon with honey Dijon sauce, jasmine rice and broccoli florets; salmon with sesame ginger sauce, sweet potatoes in dark sugar sauce and petite green beans; and mahi mahi with tropical salsa, coconut rice and sugar snap peas.

Product innovation is helping to propel the category. According to Mintel's Global New Products Database, frozen fish and seafood accounted for two-thirds of the product launches between 2005 and 2010. "When a leading name brand makes a product introduction, it can have a halo effect over the entire segment by attracting consumers who may not have previously paid attention to the seafood aisle," Mintel says.

Sea Best, flagship brand of Jacksonville, Fla.-based Beaver Street Fisheries, expanded its product line with the addition of new items for 2011, including Tuscan-Style Shrimp, Shrimp Scampi, and two varieties ofTorpedo Shrimp in coconut and breaded options.

"These new products aim to help Sea Best retailers in their effort to attract more shoppers with a wider variety of seafood choices," says Cyd King, brand spokeswoman. "They also fulfill the consumer demand for more restaurant-quality products."

Cold, Hard Facts

Environmental issues are driving consumer behavior to a certain extent as well.

"As long as the species that people are buying are from a well-managed fishery, there is no environmental downside," says Steve Musser, VP of Atlanta-based Inland Seafood. "The idea of buying frozen seafood for home use also reduces waste from spoilage and still offers consumers restaurant-style meals right in their own homes."

To that end, Inland has launched a new product that supports a sustainable species while making healthy eating a little easier. Under its Inland Market Premium Foods brand, Sea Salt and Roasted Garlic Mahi is low in saturated fat and a good source of nutrients such as B vitamins, phosphorus, potassium, protein, niacin and selenium.

"We are constantly creating meals which incorporate the nutritional benefits consumers want into the taste and quality that they demand," says Jerry Staines, Inland Market VP. "With seafood sustainability being a rising concern and of great importance, we also strongly consider what species we use in our recipes."

Consumers are more informed than ever about issues like the sustainability of certain species. "This is creating a bigger market for fish like mahi that reproduce quickly and are a responsible food choice," Musser says. "The preparation and seasoning of food has become more health-conscious, but consumers will not give up flavor."

Inland has a team of grocery professionals who track consumer buying and food trends. "Working with retailers on the development of recipes is crucial," Musser explains. "The retailers hear firsthand what consumers are asking for. In-store promotions and direct-to-consumer online marketing are also imperative these days."

Food safety is another concern, one that the frozen segment is well equipped to address. "Knowing that much of the frozen seafood caught today is frozen immediately after catching on a fishing vessel and kept at very low temperatures is helping to increase the popularity of frozen seafood, as consumers can feel safe that a frozen product is far less likely to be exposed to potential environmental hazards," says AFFI's Henry. "Frozen seafood offers consumers an assured supply of product, as the freezing process ensures products can be sourced globally, lessening supply disruptions caused by environmental issues in seafood-rich regions."

What's the next wave in frozen seafood? "I think that you will be seeing more gourmet meals, replacements for what consumers receive in restaurants," Musser says. "Flavor profiles will be more diverse, and there will be additional options of cooking besides bake or broil — for example, steam-in-bag or meal kits. There will be more 'whole meal' options with sides, instead of just a frozen fillet offish or breaded shrimp."

Sunset's Humphrey believes it all depends on the product."My feeling is that the closer they make frozen options that taste as good as fresh," he says," people will be willing to try them."

King & Prince Launches New Brand Initiative

King & Prince Seafood has launched a new communications platform and integrated brand communications initiative with Marriner Marketing Communications.

The brand's new company positioning — "Seafood. Without a Catch"— reinforces the company's commitment to delivering consistent-quality seafood products to operators and patrons.

"Our priority has been, and will always be, our customers," says Volker Kuntzsch, president of Brunswick, Ga.-based King & Prince. "In order to ensure we continue to deliver relevant products and perfect customer service, it was important we undertake this bold and ambitious initiative and do it right."

The proprietary Marriner ClarityCapture positioning process included primary research, both in person and online with customers and prospects, along with an in-depth analysis of foodservice and seafood industry trends and insights. Once finalized, the new positioning, messaging and creative identity was rolled out in phases to employees, the nationwide sales force and, most recently, to customers and partners. Integrated campaign elements include print and online advertising, sales promotions, marketing collateral, videos, packaging design, public relations, industry event and food show support, a broker toolkit and new product research.

King & Prince's brands also include Mrs. Friday's, Oceanway and Pride of Alaska. Columbia, Md.-based Marriner's clients include Perdue, Rich Products Corp., McCormick and Phillips Foods.