Restaurant menu shifts punishing seafood sales to foodservice sector

The COVID-19 pandemic has fueled major restaurant menu shifts – some that favor seafood and others that don’t, according to Datassential Director Kelley Fechner.

Chicago, Illinois, U.S.A.-based Datassential annually provides updates on menu trends in the restaurant industry at the National Fisheries Institute’s Global Seafood Market Conference (GSMC). At this year’s event in Orlando, Florida, U.S.A., Fechner said 60 percent of restaurants have shrunk their menus since the beginning of the COVID-19 crisis in the U.S., by an average of 10.2 percent.

“We have never seen this, even though we saw the financial crisis,” Fechner said. “It wasn't to the degree that we're seeing with a pandemic.”

While restaurants are launching limited time menu offerings, operators probably won’t return to the same menu size they featured pre-COVID-19, according to Fechner.

“This is a trend that is continuing,” she said.

Of additional concern to the seafood industry is that fact that independent restaurants have closed at the highest rate of any type of restaurant since the start of the pandemic, Fechner said.

“The thing that's most-concerning from a seafood perspective [is that] 98 percent of all fine-dining restaurants have some form of seafood. You did see the most closures of fine-dining independent restaurants as well … closing down permanently as opposed to temporarily closing,” Fechner said.

Higher prices are also spooking restaurant-goers, according to Fechner. More than half of American restaurants have raised their menu prices. The reasons for the price increases include supply shortages, food inflation, and higher labor costs.

“Americans will pull back on restaurant visits as prices remain high. Forty-two percent of consumers say, ‘I'm going to pull back on those restaurant visits,’” Fechner said.

In the seafood industry’s favor, beef prices have risen the most of any commodity, making seafood prices look more favorable in comparison, Fechner said. After beef, restaurant operators say their other biggest price increases include to-go packaging, chicken breasts/thighs, dairy, and fresh fruits.

Tenth on the list of restaurant items with the largest price increases is seafood, with 57 percent of restaurant operators saying their seafood costs are increasing, 18 percent saying they are staying the same, and 23 percent saying they do not purchase seafood or that seafood’s costs are not relevant to them.

Fine-dining restaurants – which prominently feature seafood – are shrinking their menus more than any other type of restaurant, Fechner said. However, seafood appearances on fine-dining menus have declined only 0.9 percent over the past year. Comparatively, chicken dropped 2.6 percent and beef declined 1 percent, while pork appeared on 1.9 percent more menus.

“Those fine-dining places said, ‘I want to keep those things that show that I'm fine dining and so seafood definitely played a role there,’” Fechner said.

Of all seafood meals, stir-fried shrimp dishes saw the biggest increase in the percentage of menus it appeared on last year – up nearly 24 percent – because it “works really, really well from a travel perspective,” Fechner said.

Tuna nigiri dishes also increased 13.6 percent on restaurant menus.

“Sushi is another item [that travels well],” Fechner said.

Other seafood dishes that increased in appearances on U.S. menus included Alaskan cod, imitation crab (surimi), lobster cream, blackened salmon, and lobster salad (such as on lobster rolls).

As a positive for the seafood industry, around one-third (34 percent) of consumers surveyed by Datassential said they want to increase how much seafood they eat, though 60 percent don’t plan to change their consumption. More than a third of consumers say they want to increase their consumption of plant-based meat and seafood analogs, Datassential found.

Photo courtesy of Datassential