By Andy Wink of Wink Research & Consulting

The 2024 Alaska salmon fishing season is in full swing, but the sales season is just getting underway. I'm proud to be partnering with Undercurrent News to present the 2024 Wild Alaska Salmon Market Guide and I wanted to share some insights and applications from the report (get in touch with Undercurrent's team at [email protected] if you'd like to learn more).    

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Wild Alaska Salmon Market Guide 2024 Season

View report

In general, wild salmon forecasts were down heading into the 2024 season, and harvests have generally followed those expectations thus far. Those who purchased the report in June were encouraged to secure frozen sockeye supply early, expect smaller fish coming out of the Bay, maximize opportunities for fresh sales, and be careful about counting on a bigger chum salmon run. All of those predictions look good thus far. 

Going forward, we're likely to see more competition for relatively fewer frozen sockeye salmon, especially larger fish.

Since 2020, wholesale prices for frozen headed and gutted (H&G) sockeye from Bristol Bay have run about $2.50-$2.75 per pound above ex-vessel prices. You can see the average first-sale wholesale H&G sockeye prices from the Undercurrent prices portal below or by clicking here. 

Prior to the season, several packers announced a maximum ground price of $1.15/lb, which means the average ex-vessel price will probably fall within a range of $1.00-$1.10/lb, excluding any profit sharing.

This can be used as a guide for wholesale market pricing, but given the smaller harvest, it would not be surprising to see wider price spreads during this sales season. The report also features a sockeye pricing model, which market participants can use to estimate wholesale prices given various market factors pertaining to supply and demand. 

Each wild salmon species is covered in the report, complete with data about historical price spreads, supply outlook, foreign trade analysis, and recommendations for buyers and sellers. 

Frozen: Better than fresh? 

Demand for seafood has softened over the past 12-18 months, with retail sales generally lagging behind levels seen during 2020-2022 (well behind in the case of some species). A lot of Alaska salmon is sold via retail stores in North America and Europe, so this seems like a good time for some thoughts about the typical grocery store approach to selling salmon.

Is it working? Could it be tweaked to provide better value and combat rising costs?

Here's an excerpt from the report, which I hope will prompt consideration of alternative approaches that may result in more happy salmon customers (and better sales figures for suppliers). 

What's better: fresh fish or frozen fish? Obviously, fresh fish tastes the best, right?

Not so fast. We tend to simplify things into binary choices. Either this fish is fresh, or it's not; it's black or white, but in reality, freshness is a grayscale going from just-caught to spoiled/unsafe. The truth is it's really hard and far more expensive to sell truly fresh fish. 

In 2017, Oregon State University (OSU) set out to compare consumer preferences between frozen and fresh fish. The study team conducted a blind consumer survey to determine if +100 participants could tell a difference between fresh-never-frozen and flash-frozen samples of coho salmon and black cod (i.e., sablefish). The frozen fish were flash-frozen on the day of harvest, while the fresh samples were purchased from high-end grocery stores in Portland, Oregon. Samples were also subjected to quantitative quality tests using a certified quality reader, or CQR, device (study link). 

Each sample was cooked and served in an identical manner, and survey participants were asked to grade their impressions on appearance, aroma, flavor, texture, quality, overall likeability, and purchase intent. Across all categories, flash-frozen fish was rated as either more appealing or statistically the same as fresh fish.

The quantitative testing results also showed substantially higher freshness scores for the flash-frozen fish. 

Subsequent studies from OSU confirm that consumer preference for properly frozen coho salmon samples was unchanged even after 24 months since being caught and frozen!  

High-cost of fresh salmon 

Replicating the idyllic dockside seafood display at a bustling fishing port at almost every North American grocery store comes with incredible costs and compromises that ultimately hurt consumers, businesses and the environment: 

Quality & taste. Salmon can go from "fresh" to unacceptable in a matter of 10-15 days and lose a lot of quality after even five days. The whole point of this multi-billion dollar endeavor is to provide consumers with tasty fish they'll enjoy and purchase again, but research suggests more focus should be placed on supplying flash-frozen fish as opposed to "fresh" fish. 

Labor costs. Supporting a fresh seafood case requires far more labor than frozen seafood. Consider a seafood department that sells $10,000 of fresh seafood per week with an average of two employees, each working six hours/day at a fully loaded labor cost of $24/hr. These are reasonable figures based on conversations I've had with numerous seafood category managers. In this example, grocery store labor consumes 20% of the total cost despite providing a product which the research suggests is too often inferior. 

Waste. Obviously, not every fresh fish put out on ice in a grocery store will end up being sold. Research on this topic suggests fresh seafood counters generate shrink rates of 8-21%. Again, this adds tremendous cost to the fish sold, plus it's very sad that up to 1-in-5 animals were killed for ultimately no purpose. In contrast, the waste/shrink on frozen fish is virtually zero.  

Carbon footprint. Shipping fresh seafood around the world on planes creates far more carbon emissions than transporting frozen product via container ships, rail or trucks. 

Convenience. The clock ticks quickly on fresh fish. Too often, if consumers do not use fresh fish purchased from grocery stores within one to three days, they're likely to have a negative experience (and then a bunch of bad outcomes happen). In contrast, frozen fish can be stored, thawed, and used when it's convenient for consumers. 

Photo: Alaska Seafood Marketing Institute/Wink Research & Consulting

Given the historic increase in food and other living expenses over the past five years, it's no wonder that seafood sales are struggling. Consumers have to be more careful about how they spend their money, and seafood is generally perceived as the most expensive protein option. 

What if a fresh seafood case was the exception instead of the rule? Or was put in a supporting role instead of being cast as the star of the show?

Yes, there are some affluent customers who are willing to pay higher prices to buy truly fresh fish, and that should be available (at least at some stores).

But think of most grocery stores, there's usually a 10-15 foot fresh seafood case flanked by a few standup freezers, refrigerated shelves and maybe a bunker freezer. The fresh case is the main attraction.

What if educated consumers see the high-quality, frozen products as the main attraction and could provide them at a better value? What if the fresh case contained fewer items of truly fresh fish or rotating specials/offerings? 

Focusing on frozen isn't the only way to reduce costs, increase consumption, improve quality, and thereby realize better overall margins. Several club store chains do an excellent job by selling refrigerated "skin-pack" fillets cut from previously frozen fish, and certainly, many grocery chains also sell this product form. However, club stores typically sell higher volumes per store per week, so they're able to succeed with lower margins (because their unit labor and shrink costs are lower).

Chilled skin-pack fillets are an excellent product that increases shelf life, entails less labor costs, and reduces shrinkage. But my personal belief is that skin packs won't take off the same way at grocery stores (versus club stores) until the price reflects these lower costs, rather than averaging it out with fresh case product. 

Photo: Alaska Seafood Marketing Institute/Wink Research & Consulting

To some marketers and retail seafood veterans, this all might sound far-fetched or even crazy. Consumers buy with their eyes! They want to see pretty fish and talk to someone who can help them. We have to keep the fresh seafood case!

But I'm not alone in asking, "What would happen if we tried a different approach?"

To wit, Wild Fork Foods is a retail chain that provides pre-packed, frozen meat and seafood (store example). What's notable here is that Wild Fork Foods is a subsidiary of the world's largest meat packer, JBS Foods. The company appears to be making a big bet that North American consumers will ultimately find better value in frozen meat and seafood.

Time will tell whether their "zag" tactic proves successful, but after starting with about a dozen stores in Florida and Chicago, the chain now has many more outlets in Los Angeles, San Francisco, New York, Dallas, Philadelphia, and Toronto markets. This concept is similar to its Swift stores in South America, which had 125 locations as of 2019.  

The nice thing for current US grocery chains is it's not a binary choice. For those willing to test these notions, companies could try a different approach with some stores in different locations or markets and then compare performance with the status quo. But a final word of caution, consumer education is critical. I think the appropriate message is honesty: 

Truly fresh fish provides an amazing taste experience but it creates more costs which have to be priced in. Studies show flash-frozen fish tastes better than fresh fish which is nearing the end of it's shelf life. So we offer a limited selection of high-quality fresh seafood and flash-frozen product at a reasonable price. 

These sentiments are also echoed by grocery consultant Joseph Sabbagh, who offered some thoughtful advice in this Supermarket News article from January 2024. 

The Wild Alaska Salmon Market Guide is an excellent resource for buyers and sellers of Alaska salmon. For the cost of a few labor hours, market participants can be fully informed for business planning efforts, negotiations, and get access to a library of data which would take weeks to find and compile. We see this as a resource which will empower and enhance company's sales and procurement teams. To catch your copy of the report, troll on over to the report page.