BY MICHAEL FRIEDMAN

Consumers are treating themselves to higher-end frozen grocery items at home rather than splurging on restaurant meals, and seafood continues to broadly benefit from the trend, with both value and value-added segments gaining.

Frozen seafood dollar sales at supermarkets in the United States rose 7.2% to $2.1 billion in the 52 weeks ending Oct. 4, compared to the same year-earlier period, according to Information Resources Inc., a Chicago-based market research firm. Unit sales were up 0.9% to 323.4 million.

Although shrimp still represents more than half of frozen seafood dollar sales, less-expensive frozen fish/seafood items, including new steamable products, are registering strong gains.

One-third of consumers report increased consumption of frozen seafood over the past two years, according to a recent study commissioned by the Alaska Seafood Marketing Institute. Yet broader gains might be available for retailers willing to work for them.

“Many consumers — 43% — have already tried cooking fish or seafood directly from frozen,” says Larry Andrews, retail marketing director for the Juneau-based marketing organization (800-806-2497). “Couple that with the fact that 82% of consumers say preparation tips and recipes for cooking fish while still frozen would increase their likelihood of trying this cooking method, and that spells one hot opportunity for retailers.”

Consumers are balancing their desire to enjoy healthy, hearty seafood with concerns about spending restraint.

Stretching the food dollar is the driving force for the consumer in all retail categories today, according to Jeff Krause, president of RT Foods (888-258-4437), Scottsdale, Ariz.

“I don’t see that changing any time soon. I also think shoppers are trumping value over the health and wellness issues in food. They are still concerned about quality ingredients and nutrition, but not as much as before the recession started,” he says.

“When people enjoy shrimp at home, they feel as if they are indulging in a restaurant-style meal while keeping their budget in check,” adds Bryan Jaynes, director of marketing of SeaPak Shrimp Co. (912-638-5000), St. Simons Island, Ga.

Krause believes all retail food channels have benefited from the drop in restaurant business.

“This could be a long-term trend, as consumers are eating more meals at home and enjoying the many benefits of that change,” he says. “Food Network has a top-20 rating among cable networks, so it appears that learning to cook and being creative in the kitchen [are] popular right now. I also think the recession has many families looking to eat similar meals that they used to eat in restaurants, but they now want to prepare at home.”

Norbert Sporns, president and CEO of HQ Sustainable Maritime Industries (206-621-9888), Seattle, says that although the buying public today is more aware of health issues, food safety and quality, products have to be delivered at a fair and economical price.

Moreover, health and highlighted nutrient messages are much more prevalent on the packaging of new items, according to Honey Konicoff, vice president of marketing at Phillips Foods & Seafood Restaurants (888-234-2722), Baltimore.

“Seafood is naturally healthy, and consumers are responding very positively to delivering that message on-pack,” she says.

Jaap Langenberg, president of Blue Horizon Organic Seafood Co. (831-685-1648), Aptos, Calif., says health is important, but he does not believe consumers have fully grasped the meaning of healthful in seafood.

“There is so much more education needed,” Langenberg says. “What wellness means in some categories may mean something totally different in the seafood segment.”

Wellness issues mitigate in favor of fish, Sporns says.

“Tilapia is inexpensive and healthy. People are concerned with the excess fats from fast food and beef, and are conscious of the importance of the balanced diet that wellness dictates,” he says. “The juxtaposition of quality, all-natural vegetables and carbs with a whole, all-natural tilapia fillet is a very attractive proposition for consumers anxious to eat well and maintain a budget.”

Speaking of wellness-oriented seafood offerings, Blue Horizon introduced wheat-free/gluten-free Seafood Bites this year and hopes to expand the wheat-free/gluten-free concept into more items, according  to Langenberg.

Understanding the Consumer
The most successful retailers are those that best understand their consumer, Sporns says.

“Merely competing by copying will always put you in the back seat. To drive today’s market, one has to stay in tune with changing public demands,” he says. “Wellness is one [demand] that will make big inroads in how mass markets stock their shelves. The early ones to recognize this will be the winners.”

Just because consumers want to improve nutrition through seafood consumption doesn’t mean they have the time or inclination to prepare products from scratch. Despite the Food Network influence, many consumers are averse to preparing seafood at home. So it’s no surprise that Konicoff says meal solutions are becoming hugely popular in seafood.

“In frozen, we’re mostly seeing meal kits that serve two, sometimes four people,” she says. “In refrigerated, there are emerging trends in ready-to-eat, value-added fish, seafood cakes and salads. Consumers have been willing to pay higher price points for the convenience, for not having to buy multiple ingredients. Easy-to-follow cooking directions on the packaging also appeal to consumers who don’t often buy or prepare seafood.”

Convenience is an important factor for today’s multi-tasking adults, Sporns adds.

“Time for cooking is minimal, so fast pre-prepared meals and easily prepared frozen fillets are very important for Americans,” he says.

SeaPak’s Jaynes believes convenience is often a determining factor in the choices consumers make for at-home meals.

“Our goal is to ensure that our products are great-tasting, easy to prepare, and versatile enough to serve in a variety of dishes,” he says.

Konicoff adds that frozen seafood “takes the guesswork out” of frozen meal preparation. But James Berger, director of national sales of Beaver Street Fisheries Inc. (800-920-2002), Jacksonville, Fla., says the consumer will rarely choose convenience in a vacuum over quality and price.

“All of those factors have to be balanced when going to market because today’s consumers are savvy enough to understand when they are being short-changed simply for the sake of convenience,” he says.However, Langenberg notes, buyers are taking longer to decide whether to authorize new items.

Berger says buyers are approaching the category critically.

“I think any buyer will tell you that they have seen awesome items that taste great in an office presentation,” he says. “The real question is: How will they perform 60 feet away in the top left-hand corner of a plan-o-gram?”

Higher-priced items such as lobster tails and shrimp have seen their markets soften, Berger says.He stresses that it is extremely important for retailers to pass along savings to consumers. He points out that the tilapia market has been at historic lows, even if rising of late. But in many stores, pricing simply remains the same or, in some circumstances, actually is going up.

“There is a time and a place to make more margin,” Berger says. However, generating more volume at a lower price benefits retailers and suppliers in today's slippery economy, he adds.

Interesting flavor profiles, particularly ethnic alternatives, also are attracting consumer interest. Phillips, looking to introduce more ethnic flavors to the frozen seafood section, is in the process of developing products using Thai and Indian sauces, Konicoff says. The company also is leveraging the expertise of retailers to develop regional and national products to cater to customer taste and trends. And Phillips sees a great opportunity to use its frozen seafood products in bulk pack in the seafood and deli prepared cases.

“Strategy-wise, we’re concentrating efforts on more trade promotions and in-store programs to meet consumers’ desire for lower prices,” Konicoff says. “Retailers are pushing manufacturers to provide more promotional activity and for longer periods of time.”