International

Markets

Bureau

MARKET INDICATOR REPORT | APRIL 2010

Consumer Trends The American Seafood Market

EXECUTIVE SUMMARY

INSIDE THIS ISSUE

DID YOU KNOW?

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Consumer Trends American Seafood Market

Consumer Trends 3

Retail Trends 3

Key Market Segments

Shrimp 4

Lobster 4

Crab 5

Salmon 5

Foreign Suppliers 6

Canadas Export Performance 6

The financial crisis represents

a serious challenge to the U.S.

restaurant business, where

70% of seafood consumption

takes place.

Canada is the top U.S. seafood

supplier, but its total share has

been shrinking in recent years.

The United States (U.S.) is the third largest seafood market in the world, behind Japan and China. Its annual consumption is about five billion pounds. It is estimated that Americans ate an average of 16.3 pounds of fish or seafood per person in 2008a 0.6% increase from 2007. Despite continuing difficulties in the economic climate, per capita consumption of

fish and seafood is expected to remain stable in the near future. With the combined effect of the stronger Canadian dollar and the economic crisis making expensive food less attractive, its expected that Americans will reduce their consumption of luxury seafood, such as lobster, and shift to cheaper, farmed seafood. However, as the economic recovery sets in, this should change again, as American consumers prefer wild-caught, fresh seafood, rather than frozen seafood. The growing Latino community in the U.S., which traditionally likes seafood, is becoming increasingly health conscious, which could lead to an increase in the consumption of these products. This trend could offer opportunities for Canadian exporters. In 2008, U.S. imports totaled about US $14 billion. Canada is the main supplier to the U.S., providing a wide and growing variety of fish and seafood products despite an overall decline in the sector. Other suppliers include China, Thailand, Indonesia, Chile and Vietnam. Over the 2003 to 2008 period, Canadas share decreased by 3% while Chinas share increased by 5%, indicating a trend toward cheaper seafood products. The financial crisis has been particularly hard on Canadian sales of lobster to the US.

FUTURE DEMAND

American per capita consumption of seafood is low relative to that of other developed countries. However, in the long run, seafood should gain popularity, particularly in large populations on the East and West Coasts and in areas with growing Latino or Caribbean populations. Health benefits and low-cost products should also contribute to the development of this sector in more inland urban areas such as Minneapolis, Cleveland and Cincinnati. However, some negative factors, such as contamination fears and lack of knowledge about how to cook fish, will continue to present some challenges to the expansion of this sector in the U.S.

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As American consumers grow more concerned about the health of their hearts, it is expected they will consume more fish because of its high content of omega-3 and omega-6 fatty acids, which provide protection from heart disease and have positive effects on brain function. However, this trend is still not well established as only 22 percent of Americans and 19 percent of women of childbearing age ate seafood two or more times per week in 2008. The economic downturn has negatively affected some of the most significant areas of seafood consumption, such as the tourism and restaurant businesses, with considerable drops in sales of fish and seafood. One of the strategies adopted by households to save money is the reduction of casual dining in restaurants. Given this reality, more information on cooking fish and making seafood cooking easier would be valued by U.S. consumers. Of the total of 16.3 pounds of fish and seafood consumed per person in 2007, Americans ate 12.1 pounds of fresh and frozen fish, 1.9 pounds more than in 2000. Consumption of canned seafood, primarily tuna, was 3.9 pounds per person, 0.8 pounds less than in 2000. The remaining 0.3 pounds is dedicated to niche foods such as cured seafood, smoked salmon and dried cod.

CONSUMER TRENDS

Per Capita Consumption by Category,

pounds, Graph 1

0 %

2 0 %

4 0 %

6 0 %

8 0 %

10 0 %

2 0 0 0 2 0 0 7

Source: National M arine Fisheries Services

Fresh and frozen Canned cured

RETAIL TRENDS

Top Ten Leading U.S. Seafood Restaurant Chains

Restaurant Chain Number of Outlets Est. Sales

(US$Million)

Red Lobster (Darden Rest. Group) 680 $2,400

Landrys/Joes Crab Shack/Chart House 300+ $1,168.00

Long John Silvers (Yum Brands) 1,200 $800.00

Captain Ds Seafood 560 $506

McCormick & Schmicks 57 $238

Bonefish Grill (Outback Steakhouse, Inc.) 63 $203.00

Legal Seafood 30 $150.0(est)

McGrath's Fish House 17 $68.0

Bubba Gump Shrimp Co. 20 $65.0

Rockfish Seafood Grill 25 $50.0(est)

Shells Restaurant 25 $41.60

Source: H.M. Johnson & Associates

Seafood is still not a big part of many Americans diets. Less than 40% say they shop for seafood at their primary grocery stores at least once a month and just 4% do so at least once a week. Over 32% never shop for fresh seafood, according to the 2008 Food Marketing Institute Grocery Shopper Trends survey. In 2008, seafood was reported as grocers least-profitable department. According to Datamonitor, U.S. consumers spent an estimated US $13.1 billion for seafood products in 2008 which includes US $8.8 bi l l ion in expenditures on fresh seafood; US $ 2.3 billion in retail sales for frozen fish and seafood, and US $ 2.0 billion for canned fish and seafood. By 2010, it is expected that Americans will spend US $ 14.0 billion on fish and seafood.

Shrimp is low in fat, a good source of protein, contains important vitamins and minerals, and is easy to digest. Shrimp have been one of America's favourite seafoods in recent years. In 2007, Americans consumed 4.1 pounds of shrimp, per capita compared to 2.5 pounds in 1994. Americans consume a lot of shrimp during the holiday season when entertaining friends. The sales peak for shrimp is the week before Christmas and Christmas week. Shrimp is the second largest category in the seafood market, accounting for about 30% of seafood sales in recent years. However, a report on shrimp sales from The Perishables Group shows that retailers are reducing their promotions for high-value seafood products like shrimp and, consequently,

sales showed a reduction in terms of volume and value at the end of 2008. This lack of demand has, in turn, reduced prices. As long as supply remains sufficient, low prices should encourage consumption in the short term, as the economic recovery sets in. The volume of U.S. shrimp imports was 562.5 million kilograms in 2008, up 1.3% from the previous year. Shrimp imports from Thailandthe top supplierreached 182.4 million kilograms, down 3.2 % from the previous year.

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SHRIMP

LOBSTER

Lobster is one of the seafood products most affected by the economic downturn. Live lobster is still prominent in niche wealthy markets on the East Coast and has been gaining strength on the West Coast as well. Although lobster consumption in restaurants has fallen dramatically, live lobster sales in supermarkets have done relatively well, as new technology is making live-lobster tanks easier to maintain. The much lower 2009 market price also contributed to sustained supermarket sales.

SEAFOOD MARKET NAMES WHERE CAUGHT

American/Maine Lobster Lobster Northeast U.S. & Canada

Spiny Lobster Rock Lobster, Warm Water Lobster U.S., Western coast of Baja Peninsula

Spiny Lobster Rock Lobster, Warm water Lobster Caribbean

Spiny Lobster Rock Lobster, Warm water Lobster Brazil

Source: National Marine Fisheries Services

Source: National Marine Fisheries Services

SEAFOOD MARKET NAMES WHERE CAUGHT

Northern

Shrimp Salad Shrimp, Cocktail Shrimp, Ebi

U.S. & Canadian

Atlantic

Pink Shrimp Ocean Shrimp, Salad Shrimp, Cocktail Shrimp, Ebi Oregon

Shrimp White Shrimp, Brown Shrimp, Pink Shrimp, Ebi U.S. Gulf of Mexico, U.S. South Atlantic

Shrimp Pacific White Shrimp, West Coast White Shrimp, Ebi U.S.

Shrimp Black Tiger Shrimp, Tiger Prawn, White Shrimp, Ebi Imported

Shrimp Black Tiger Shrimp, Tiger Prawn, White Shrimp, Ebi Imported

Spot Prawn Prawn, Spot shrimp, Amaebi British Columbia

Spot Prawn Prawn, Spot Shrimp, Amaebi U.S. Pacific

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CRAB

American per-capita crab consumption amounts to 0.7 pounds per year. Crab is commonly available for purchase as live, refrigerated in pieces, canned, or frozen. Each form may be more readily available in certain regions than others. In U.S. supermarkets, whole crabs and crabmeat, are sold in the fresh seafood departments. In 2008, crab sales peaked at the beginning of the year with an average US $1,084 per store, per week.

SEAFOOD MARKET NAMES WHERE CAUGHT

Blue Crab Hardshell Crab, Softshell Crab, Blue-Claw Crab, Kani U.S.

Dungeness Crab Market Crab, San Francisco Crab, Pacific Edible Crab, Commercial Crab U.S. and Canada

Jonah Crab Atlantic Dungeness Crab U.S. Atlantic

King Crab Alaska King Crab, Red King Crab, Golden King Crab, Blue King Crab, Kani U.S.

King Crab King Crab, Red King Crab, Golden King Crab, Blue King Crab, Kani Imported

Kona Crab Spanner Crab, Frog Crab Australia

Kona Crab Spanner Crab, Frog Crab, Ppai kualoa Hawaii

Snow Crab Snow Crab, Tanner Crab, Queen Crab, Spider Crab, Kani Alaska, Canada

Stone Crab Gulf Stone Crab, Florida Stone Crab U.S. Atlantic, U.S. Gulf of Mexico

SALMON It is no surprise that salmon sales account for a significant percentage of fresh retail seafood sales. In 2007, American per-capita salmon consumption was 2.36 pounds, including 0.3 pounds of canned salmon, according to National Marine Fisheries Service data. Salmon represents 13% of all seafood sales nationwide and represents 36.9% of all fish sold in the U.S. Peak season for salmon sales is during the summer months, when salmon is at its highest quality, which coincides with grilling season. With the economic crisis continuing, American consumers have become more price sensitive and many have shifted to farmed Atlantic salmon in the short term.

SEAFOOD MARKET NAMES WHERE CAUGHT

Salmon Coho, Sockeye, King, Pink and Red, Sake Alaska

Salmon Coho, Sockeye, King, Pink and Red, Sake Washington

Salmon (farmed) Farmed Salmon, Atlantic Salmon, Sake Worldwide

Salmon Roe Ikura, roe Alaska

Salmon Roe (farmed) Atlantic salmon roe, Farmed salmon roe Worldwide

Source: National Marine Fisheries Services

Source: National Marine Fisheries Services

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FOREIGN SUPPLIERS

The U.S. imports about 84% of its seafood, half of

which is farmed. In 2008, U.S. imports totaled US $14.2

billion, an increase of US $500 million over 2007,

although quantities of imports declined slightly to 2,370

thousand tonnes.

The value of crab imported in 2008 was US $1.4 billion, of which 30% came from Canada. The value of imported lobster was US $1.1 bil lion with 67% originating from Canada, while the value of imported salmon was US $621 million, with Canada leading all suppliers with 68% of sales. The U.S. encourages the development of domestic aquaculture to increase its domestic supply and to lower seafood prices.

USA Major Suppliers in 2008, US$ million

0

500

1000

1500

2000

2500

Can

ada

Chi

na

Thaila

nd

Indo

nesia

Chi

le

Source: Global Trade Atlas

others

Salmon

Shrimp

Crab

Lobster

CANADAS EXPORT PERFORMANCE

U.S. Seafood Imports From Canada, US $ Millions

2,000

2,050

2,100

2,150

2,200

2,250

2,300

2003 2004 2005 2006 2007 2008

Source: Global Trade Atlas

0%

5%

10%

15%

20%

25%Value

Share of US Imports

The American Seafood Market Her Majesty the Queen in Right of Canada, 2010 ISSN 1920-6615 Market Indicator Report AAFC No. 11185E Photo Credits All Photographs reproduced in this publication are used by permission of the rights holders. All images, unless otherwise noted, are copyright Her Majesty the Queen in Right of Canada.

For additional copies of this publication or to request an alternate format, please contact: Agriculture and Agri-Food Canada 1341 Baseline Road, Tower 5, 4th floor Ottawa, ON Canada K1A 0C5 E-mail: infoservice@agr.gc.ca

Aussi disponible en franais sous le titre : Le march amricain des produits de la mer

The Government of Canada has prepared this report based on primary and secondary sources of information. Although every effort has been made to ensure that the information is accurate, Agriculture and Agri-Food Canada assumes no liability for any actions taken based on the information contained herein.

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