Fall 2019 Key Buyer Guide by Diversified Communications

FALL EDITION

Marketing to moms

SPIKES LENT SEAFOOD SALES

Tackling Lent, the “Super Bowl for seafood restaurants” SPOTLIGHT ON Seafood shoppers wary of online purchasing

Plant-based seafood alternatives’ market grows

FALL EDITION

DIGITAL PRODUCT MANAGER Faith Irek / firek@divcom.com EXECUTIVE EDITOR Cliff White / cwhite@divcom.com

Key Buyer 2019

EDITORIAL PROJECT MANAGER Madelyn Kearns / mkearns@divcom.com ASSOCIATE EDITOR Chris Chase / cchase@divcom.com

Industry Update

SENIOR PRODUCTION DESIGNER Theresa Slusher

With innovation comes opportunity.

ADVERTISING COORDINATOR Kathleen Libby / klibby@divcom.com

It was impossible to deny the power of innovation when scanning the sprawling landscape of seafood product launches that occurred over the past year-plus for the 20th anniversary edition of SeafoodSource’s “Top 25” list, due to hit subscriber inboxes and our homepage by the end of September. Supplier heavyweights like Chicken of the Sea and East Coast Seafood Group have soared to incredible new heights by embracing creativity in seafood product development, our process revealed. But they aren’t the only ones cashing in on ingenuity. Restauranteurs, nutrition campaigners, and even burgeoning seafood industry competitors are also prioritizing innovation in novel ways. For example, Long John Silver’s, the largest quick-service seafood chain in the U.S., recently underwent a revitalization of its brand – an exercise that involved the franchise launching its own record label, which has since been leveraged across social media (Read “Tackling Lent” on page 6 ). Similarly, the Seafood Nutrition Partnership has also been thinking outside of the box – and the actual grocery store – using geofencing around the parameters of its retail partners’ locations to promote seafood to mothers via their smartphones as part of a new kind of Lenten campaign (Read “Marketing to moms” on page 10). Then there is the growing crop of plant-based seafood alternative providers, who have been experimenting with the tastes, textures, and the very makeup of seafood to create products that appeal to emerging health-conscious consumers (Read “Growth spurt” on page 12). No matter where within – or outside – the seafood industry a business or organization falls, the prominence of innovation is unquestionable, which is why the topic is one of several SeafoodSource investigates and analyzes in its fifth Key Buyer Industry Update. With many new seafood products sure to hit the market this fall , and onward into 2020, it’s worth asking: How has innovation shaped your journey in the seafood industry so far? Read the proceeding pages and imagine where it could take you next.

@seafoodsource seafoodsource Diversified Communications 121 Free Street, P.O. Box 7438 Portland, ME 04112-7438 Ph: (207) 842-5606 Fax: (207) 842-5603 Published by Diversified Communications Producer of : Seafood Expo North America, Seafood Processing North America, Seafood Expo Global, Seafood Processing Global, Seafood Expo Asia and SeafoodSource Theodore Wirth President/CEO Mary Larkin President, Diversified USA Liz Plizga Group VP, Seafood Events Mary Fowler Sales Manager, SeafoodSource Heidi Weeks Sales, SeafoodSource Kelcey Leshinski Marketing, SeafoodSource

Madelyn Kearns Editorial Project Manager, SeafoodSource mkearns@divcom.com

Produced by

3 | 2019 KEY BUYER INDUSTRY UPDATE

FALL EDITION | 3

03 INDUSTRY UPDATE 04 ADVERTISER INDEX

TABLE OF

CONTENTS

Tackling Lent, a seasonal “Super Bowl for seafood restaurants”

By Jeffrey Spear

Marketing to moms spikes Lent seafood sales

By Christine Blank

18 AD INDEX

25 09 19 07 C4 05 23 19 13 17 C3 11 C2 21

Ensis Fisheries, PVT, Ltd. Handy Seafood Harbor Seafood JX Nippon ANCI, Inc. / Panaferd® AX Morey’s Seafood International LLC Ruggiero Seafood, Inc. Seafarers®, Inc. Seafood Expo Portfolio SeafoodSource Premium Membership SeafoodSource Subscribe Thai Union / Chicken of the Sea Top Catch Seafood Tropical Aquaculture True North / Bandera Bronzini

4 | 2019 KEY BUYER INDUSTRY UPDATE

Growth spurt: Business booms for plant-based seafood alternatives By Madelyn Kearns

Seafood sector banks on snacking innovation to spark customer interest By Cliff White

Buyer beware: How to use WWF’s new Endangered Marine Species Guide By Madelyn Kearns

E-commerce sales soar – but seafood shoppers still wary By Christine Blank

FOODSERVICE

Tackling Lent, a seasonal “Super Bowl for seafood restaurants” By Jeffrey Spear

“We understand the value of seafood associated with Lent. As such, we’ll put out flyers, make special offers, and support our clients with seasonally appropriate offerings.”

AFTER ALL OF THE END-OF-YEAR festivities have faded into happy memories, and Q4 sales have been tallied, marketers within wholesale, foodservice, and food retailing communities are evaluating and planning the next best way to promote seafood. While Valentine’s Day, observed on 14 February, is a great time to roll out extravagant, exotic, and somewhat esoteric seafood preparations, the most important holiday associated with seafood following year-end celebrations is Lent. Lent, the six-week period leading up to the Easter holiday, is extremely important to observers of the Christian liturgical calendar around the world. While traditionally associated with abstinence and prayer, dietary issues including the avoidance of rich red meats and poultry makes seafood the protein of choice during this period of solemn religious observance. 6 | 2019 KEY BUYER INDUSTRY UPDATE

Captain D’s

Based on experience, many operators simply expect greater demand for seafood during the Lenten season, and plan accordingly. Without any coordinated promotional activities, they will feature a few extra seafood dishes on their menu as seasonal specials, giving observant patrons greater variety from which to choose. There are lots of examples where restaurateurs, including chain operators, have taken a more proactive approach, developing promotions specifically linked to Lent and the weeks leading up to Easter. In this past year alone, the quick-service hot dog chain Wienerschnitzel offered Fish-N-Chips; some locations of fast food franchise Chick-fil-A offered a Fish-fil-A sandwich; Dairy Queen brought its Wild Alaskan Pollock Sandwich “back for the season;”

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and both Arby’s and Del Taco offered special deals associated with their seafood offerings. Meanwhile, Captain D’s used the holiday in 2019 to introduce its Giant Fish Sandwich and North Atlantic Lobster Roll. “Lent is a huge event for us every year,” explained Bindi Menon, the vice president of national marketing for Captain D’s. “We knew we could offer the best fish sandwich in the industry with our Giant Fish Sandwich. Our sandwich promotion was successful and helped us build some

Using the band’s nautically-themed music, the company created audio coupons that could be redeemed at restaurants for free food and other special deals, an undeniably creative approach that rolled out just in time for Lent. The impact was reported as immediate, sparking significant increases in traffic on social media channels and via in-store redemptions. In the wake of this success, Long John Silver’s has implemented another promotional program – Fishmas in July – also featuring music by the Coral

If you ask Bryan Bernstein, the director of marketing for Baltimore-based Saval Foods, a full-line distributor with an extensive range of seafood products, seafood providers seldom need special notice or intervention as far as Lent is concerned. “We understand the value of seafood associated with Lent,” he said. “As such, we’ll put out flyers, make special offers, and support our clients with seasonally appropriate offerings. While this gives our sales team something to talk about

“The Lenten season is like the Super Bowl for seafood restaurants, so we are already looking at products to feature for Lent next year.”

momentum into the second quarter.” When asked about future promotions associated with Lent, Menon said the restaurant chain is already thinking ahead to spring 2020. “The Lenten season is like the Super Bowl for seafood restaurants, so we are already looking at products to feature for Lent next year,” Menon said. “We always plan to promote a very successful, tried and tested product, that will not add undue complexity for our restaurants during this high traffic time of year. We are the seafood experts as well as seafood innovators and our products reflect that – not only at Lent, but all through the year.” Long John Silver’s, the largest quickservice seafood chain in the United States, which operates nearly 1,000 franchised restaurants nationwide, has gone one step further. While its customers would certainly appreciate special offers specifically for Lent, the company has leveraged this seasonal opportunity to revitalize and refresh its brand with a variety of updated and modernized touchpoints. As part of this process, Long John Silver’s launched its own record label, Fish Yeah!, and signed its first musical artist – the Washington D.C.-based Coral Benders band. 8 | 2019 KEY BUYER INDUSTRY UPDATE

Benders, with special audio coupons. It has not yet been decided whether the Coral Benders will have an encore in 2020, or if other promotional activity is being planned for next year’s Lenten season. Promotional activity catering to consumer seafood preferences during Lent has not been limited to fast food franchises. Ponderosa Steakhouse and Bonanza Steakhouse, both part of Homestyle Dining LLC., based out of Plano, Texas, offered special Seafood Pounder platters tailored for Lent in 2019. Additionally, Boston Market – a chain of American fast casual restaurants headquartered in Golden, Colorado – introduced a Baked Cod meal, while the Tampa, Florida-headquartered Bonefish Grill introduced its Angler’s Catch, a dish of crispy cod, sea scallops, and shrimp. Even one of the most well-regarded restaurateurs in the nation – the Rick and Deann Bayless-helmed, Chicago, Illinoisbased Topolobampo – has started offering dishes considered appropriate for Lent. While not limited to the season, one of Topolobampo’s more intriguing seafood dishes, Lobster Chilpachole, features lobster and mussels in a stew made with ancho and chipotle peppers, roasted tomatoes, lobster stock, epazote, and corn masa.

during sales calls, we find our customers have already anticipated the holiday and modified their orders without special intervention from us.” A similar sentiment is held by Darryl Reed, the director of purchasing for Halperns’ Steak and Seafood. “While we are definitely busier in the weeks leading up to Easter, and some of our reps may specifically promote seafood for Lent, we do well enough without much in the way of a coordinated promotional campaign,” Reed said. Greater emphasis is attached to seafood on Fridays during Lenten season, as it is believed that Jesus Christ was crucified on a Friday. This is observable during the six weeks of Lent for certain, but also on Fridays throughout the year, when observant Christians give up red meat and poultry. This has given rise to promotions appropriately called “Fish Fry Fridays” or “Fish Frydays” across the United States. When it comes to promotional activity in anticipation of, and throughout, the Lenten holiday, there are a large number of operators indicating some degree of effort is warranted. While outcomes may vary, the impact appears to have both immediate and longer-term benefits.

CONSUMER INSIGHTS

68%

OF INDIANAPOLIS MOMS RECIEVED SEAFOODPOSITIVE MESSAGES

Marketing to moms spikes Lent seafood sales By Christine Blank

Seafood suppliers that are targeting moms online and in-store are boosting their seafood sales, both during Lent and throughout the year. During the 2018 Lenten season, the Seafood Nutrition Partnership teamed up with suppliers such as Starkist, Trident, Bumble Bee, and Verlasso on a digital campaign in Indianapolis, Indiana. SNP delivered messages on building “Little Seafoodies” [a reference to SNP’s longtime children’s seafood campaign] to moms’ cell phones, social media feeds, on their favorite blogs, and on morning lifestyle shows. The campaign targeted moms where they are: searching for recipes or “pinning” dishes on Pinterest, reading their favorite blog post, or seeing what their friends are up to on social media, according SNP President Linda Cornish. SNP also utilized geofencing around some grocery stores to have digital ads appear on mothers’ phones while they were shopping. Supplier partners provided coupons, discounts, recipes, social posts, and/or promotions in grocery stores. Ahead of the pilot, SNP worked with seafood buyers at local Kroger and Meijer stores to prepare them with the campaign’s messaging. Sixty-eight percent of Indianapolis moms received 10 | 2019 KEY BUYER INDUSTRY UPDATE

seafood-positive messages such as a video featuring local dietitian and TV personality Annessa Chumbley. “The recipes she created were simple and got the kids involved in cooking,” Cornish said. Notably, the campaign generated a 300 percent return on investment, and sales of seafood in supermarkets in Indianapolis rose 2.4 percent during the promotional period. Frozen finfish sales in the city soared more than 11 percent, far outperforming national sales growth of less than 3 percent, according to SNP. In addition to sales growth, the campaign influenced some mothers’ perceptions of seafood for the long-term. A significant 64 percent of moms intended to serve more seafood after exposure to the ads, and there was a 13.5 percent increase in positive sentiment surrounding seafood. The moms’ belief that “kids won’t eat seafood” declined 35.6 percent after the campaign. Their belief that children are not fans of seafood or “will not try it under any circumstance” dropped by 23.3

CONSUMER INSIGHTS

percent. Plus, the percentage of moms who with moms, so they understand how vital said they “love most types of seafood and seafood’s nutrients are to a child’s health are always looking for new ways to prepare and development. it” rose by 26 percent. For perspective, the American Academy of Pediatrics (AAP) recently SNP is conducting a second eightsaid that U.S. children are not eating week pilot targeting moms this fall in the Hartford/New Haven, Connecticut enough seafood. market, followed by two additional pilots “The recent AAP study draws attention in the spring of 2020. The aim is to look at to the concerning nutrient gap for children diverse demographics and regions to test – kids are not getting the essential vitamins the messaging with moms throughout the and nutrients found in seafood that they country before expanding to a nationwide campaign, need for their proper brain development,” Cornish said. Cornish said. The U.S. Food and Drug Administration (FDA) is “While many of our tactics and messaging will remain now emphasizing the nutritional benefits – particularly the same from city to city, a significant benefit of being a to pregnant and breastfeeding women as well as children highly targeted digital campaign is that we can tailor it to – of eating at least eight ounces of seafood weekly. The OF MOMS INTENDED TO SERVE MORE the market we are in. Utilizing our partnership with Nielsen agency recently updated its guidance for pregnant SEAFOOD AFTER Cares, we have data that tells us where the moms look for EXPOSURE TO THE ADS and breastfeeding women, based on the United States Department of Agriculture’s 2015-2020 Dietary recipes, search for information, and spend their digital time, and we can focus our ads in those categories,” Cornish said. Guidelines for Americans. The guidance includes simple messages, Seafood retailers and suppliers also have an opportunity to such as: “Pregnant women should eat two to three seafood meals per week.” communicate important scientific research and other information

64%

FALL EDITION | 11

TRENDING NOW

Ocean Hugger

Growth spurt:

Business booms for plant-based seafood alternatives By Madelyn Kearns

31%

GROWTH OVER THE PAST TWO YEARS FOR THE PLANTBASED FOOD CATEGORY

37%

INCREASE IN PLANTBASED MEAT SALES IN 2018

93%

OF BEYOND BURGER BUYERS WHO ALSO BOUGHT CONVENTIONAL MEAT

12 | 2019 KEY BUYER INDUSTRY UPDATE

IT’S A GOOD TIME to be a U.S. plant-based food producer, according to new data released this summer by the Plant Based Foods Association (PBFA) and the Good Food Institute (GFI). The research, which was commissioned from wellness-focused data technology company SPINS, shows that the plant-based food category erupted by 31 percent over the past two years into a USD 4.5 billion (EUR 4.01 billion) industry at the national retail level, with 11 percent of that growth occurring just last year alone. Meanwhile, the total U.S. retail food market grew by 2 percent in dollar sales during that same period – indicating to PBFA and GFI “that plant-based foods are a key driver of growth for retailers nationwide.”

“Plant-based foods are a growth engine, significantly outpacing overall grocery sales,” said PBFA Senior Director of Retail Partnerships Julie Emmett, in a press release announcing the SPINS findings. “We are now at the tipping point with the rapid expansion of plant-based foods across the entire store, so it is critical for retailers to continue to respond to this demand by offering more variety and maximizing shelf space to further grow total store sales.” While plant-based milk products dominate the sector, plant-based meat and protein alternatives, including seafoodinspired options, are contributing to the category’s growth consistently and in innovative ways. The plant-based meat and seafood category, on its own, is worth more

TRENDING NOW

than USD 800 million (EUR 715 million), SPINS researchers found, with sales up by 10 percent in the last year. Currently, plantbased meats account for 2 percent of retail packaged meat sales, with refrigerated plant-based meat “driving category growth with sales up an impressive 37 percent,” according to the SPINS figures. (Note: Plantbased seafood alternatives were counted with plant-based meat alternatives for the sake of the study) Who is responsible for this significant expansion? Health-conscious consumers, especially those counted among the younger generations, said Michele Simon, PBFA’s executive director. “Health was pointed to as the number one driver for why consumers are interested in shifting away, particularly from meat and protein animal products, towards plantbased options in general,” Simon said. “The fact that it tastes good” is also a primary motivating factor for consumers as far as plant-based products are concerned, Simon added. “Taste is always high up there as a default,” she said.

on those attributes (taste, price, and convenience) more than ever. These products are also appealing to meat-eaters looking to reduce their meat consumption. In fact, Beyond Meat found that 93 percent of the consumers buying the Beyond Burger also had conventional meat in their carts.” Animal welfare also tends to play a role in guiding many consumers toward the plant-based alternative food market, Simon said. However, particularly when it

“While still relatively small compared to other plant-based proteins, the sector is growing, with new companies expanding into the shelf-stable and fresh seafood markets.” Jen Lamy, GFI’s sustainable seafood initiative manager, agreed wholeheartedly. “Regardless of what people tell pollsters, studies of what people actually choose to eat (‘revealed preference’) consistently show that taste, price, and convenience determine what most people eat,” Lamy said. “Successful plant-based products are appealing to consumers

comes to younger generations, including millennials and Generation Z, a spotlight is being shone on environmentalism as

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well, as these consumers are “particularly to other plant-based proteins, the sector is analog developer, has also seen its share interested in where their food comes from,” growing, with new companies expanding of investment, having completed its third explained Simon. into the shelf-stable (such as Good Catch early-stage venture capital funding round “When you dial into the younger plant-based shelf-stable tuna) and fresh in January 2019, netting USD 2.88 million generation, it’s really much more about (such as Ocean Hugger plant-based raw (EUR 2.57 million). That doesn’t include the their concerns for the environment,” additional USD 250,000 (EUR 222,800) the sushi products) seafood markets,” she said. business received in March 2019 from Kale she said. If the news cycle over the past few years United AB, a Swedish investment firm keen Appealing to younger demographics is any indication, more plant-based seafood on plant-based businesses. The company’s is of the utmost importance to plant-based alternative developers are cropping up to food producers of all types, according to main product, Ahimi, is made from tomato, PBFA and Simon. PBFA itself – whose soy sauce, water, sugar, and sesame oil, and membership network includes plant-based is meant to resemble ahi tuna. seafood alternative providers such as Good There is also AFT Holdings, a diversified Catch, Ocean Hugger Foods, and Fry Family holding company and the owner of All About Healthy Foods Holdings and its Foods – has been attempting to do just that subsidiary, Atlantic Natural Foods (ANF), with its Power Plant campaign, a first-of-itskind grab-n-go concept offering “a turn-key which produces vegan seafood alternatives, solution to meet the including the Loma high demand for plantLinda brand of TUNO “If the news cycle over the past few years is any indication, based foods on college products. Marketed as a “shelf-stable” campuses, in retail and more plant-based seafood alternative developers are vegan tuna line, foodservice spaces, cropping up to help put the segment on the map.” the brand is sold by airports, hospitals, retail giant Walmart and other destinations across the United States,” the plant-based help put the segment on the map. The across the United States as of March 2019. aforementioned Good Catch burst onto foods promotional organization wrote on A spokesperson for ANF confirmed to its website. the scene in 2018, when it secured USD 8.7 SeafoodSource in March that 1,100 Walmart million (EUR 7.5 million) in funding to start stores are carrying the line, which includes Small segment, big opportunity Sriracha, Lemon Pepper, and Spring Water distributing its plant-based tuna pouches Although the plant-based seafood and other products. varieties in easy-to-open, 5-ounce cans. alternatives segment is small, both Simon “The relentless and indiscriminate TUNO also sells 3-ounce pouches in three and Lamy said it’s being viewed as an area killing of marine life is devastating ocean flavors: Sesame Ginger, Thai Sweet Chili, and of tremendous opportunity. ecosystems,” said Good Catch cofounders Lemon Pepper. The cans and pouches retail “Plant-based seafood is a small, but and co-CEOs Chris Kerr and Eric Schnell in a for a suggested USD 1.49 (EUR 1.32) to USD growing segment of the overall market,” 1.99 (EUR 1.77) each. joint statement in April 2018. “The only truly Lamy said. “While plant-based beef and sustainable seafood is seafood that allows Terms and conditions chicken products are relatively common, fish to remain in the ocean. It is abundantly categories like fish and shellfish are clear that we need a new approach to Egil Ove Sundheim, the U.S. director underrepresented in the plant-based seafood.” of the Norwegian Seafood Council (NSC) – which has been working directly with market. While retailers carry an average of The Newtown, Pennsylvania-based American consumers in recent years 41 plant-based milk products, they carry an company offers imitation seafood products to understand what drives and deters average of 24 plant-based meat and seafood made from beans: about 40 percent pea, modern seafood purchasing – declared products. Plant-based fish and shellfish with the rest being soy, chickpea, lentil, earlier in 2019 that “origin matters for present a massive market opportunity, fava, and navy. The special ingredient that the end-consumers.” As such, it worried especially with growing unmet demand differentiates the products from a run-ofhim how incoming plant-based seafood for seafood globally.” the-mill soy burger is sea algae oil, which alternative developers could be creating About USD 9.4 million (EUR 8.4 contains omega-3 fatty acids. Good Catch’s million), or 1.2 percent, of total plant-based imitation tuna packets come in three flavors: undue confusion with the words they used to market their products. meat dollar sales come from plant-based Mediterranean, Oil & Herbs, and Naked in “We know origin matters – that’s our seafood alternatives, according to Lamy, Water. The firm has also created other beanand around 95 percent of plant-based based products that act as analogs for crab starting point,” he said. “And that’s why I’m also a little concerned about some seafood alternative sales are achieved via cakes, fish sliders, and burgers. vegan/vegetarian products now coming frozen products. New York City, New York-based Ocean Hugger Foods, another seafood “While still relatively small compared onto market that are labeled as ‘salmon’ or 14 | 2019 KEY BUYER INDUSTRY UPDATE

TRENDING NOW

“I think the industry will have to watch out for what’s going on right now because the definition of salmon, the definition of tuna, is being challenged.” part of the milk category and even claiming a part of the milk cooler,” he added. PBFA’s Simon confirmed that issues surrounding the labeling of plant-based seafood alternatives have indeed come up for the organization and its seafoodinspired members. “One thing that has come up [with plant-based seafood alternatives] is the

labeling issue,” Simon said. “We work with our members closely to ensure that they are using proper qualifiers and are being clear. But we are already seeing some pushback from the fish industry, similar to what we’ve seen from the milk and meat industries.” According to Simon, whether it’s labeling plant-based seafood alternatives or knowing how to promote them competitively, much of the segment remains unchartered territory. “For meat, the health proposition is clearer – red meat and processed meats, in particular, have been identified as causing diseases and not being good for you in certain quantities. With seafood, the issue is less about health… and more about the environmental impact and overfishing, and so forth,” she said. Impossible Foods

‘tuna’ or… ‘finless fish.’ I think the industry will have to watch out for what’s going on right now because the definition of salmon, the definition of tuna, is being challenged.” Requirements set forth by the U.S. Food and Drug Administration determine “what a product should be to be called salmon or to be called tuna, and these products do not fulfill those requirements,” Sundheim said. “I think that we [as an industry] have to be aware that this is going on. We have products now using our terminology…that are defined by the FDA not to be what they’re claiming to be. We need, as an industry, to raise our voice.” “If nobody raises their voice about it, we might end up in a similar situation as milk did a few years back when soy milk and almond milk were introduced, claiming a

Reservation required? Whole Foods Market’s co-founder and co-CEO John Mackey – who has been a devoted vegan for more than 20 years, adhering to a diet of 15 fruits and vegetables a day – expressed some reservations about the booming plant-based “meat” market in a recent interview with CNBC Make It. According to Mackey, the health benefits of plant-based meat alternatives seem suspect considering the amount of processed ingredients at play. “The [brands] who are capturing the imagination of people – and I’m not going to name these brands because I’m afraid I will be associated with the critique of it – but some of these that are extremely popular now that are taking the world by storm, if you look at the ingredients, they are super, highly processed foods,” he said to CNBC Make It. “I don’t think eating highly processed foods is healthy. I think people thrive on eating whole foods,” Mackey added. “As for health, I will not endorse that, and that is about as big of a criticism that I will do in public.” One of the leading producers of plant-based meat alternatives, Beyond Meat, was given its big break by Whole Foods, which contracted with the start-up to sell its vegan “chicken” strips years ago. When the company’s now famous Beyond Burger – a beef-like patty made from plant proteins – came to fruition in 2016, Whole Foods acted as a springboard for the business once more. “We launched Beyond Meat. We were their launching pad. In fact, I think all of their new products have been introduced at Whole Foods,” Mackey recalled to CNBC Make It. Beyond Meat competitors such Impossible Foods – the company responsible for the plant-based patty within Burger King’s meatless Impossible Whopper – have been

experimenting with plant-based seafood alternative products. According to a recent report from The New York Times, in June 2019, Impossible Foods’ research and development team was busy diving into potential “fishless fish” products – even trialing an anchovy-flavored broth made entirely from plants for use in paella dishes. As the plant-based protein category increases in prominence, industry trade representatives and stakeholders in seafood have raised concerns and, in some cases, outright opposition. Red Lobster CEO Kim Lopdrup told CNBC in August that the popular restaurant chain will not be incorporating plant-based alternatives into its menu. “Yes, we have looked into plant-based seafood – it was terrible. And no, we’re not introducing it,” Lopdrup said. “We believe we’re already offering something that’s more healthy than these plant-based foods,” she added, citing the recent example of the restaurant’s Summer Power Bowl dish, which comes with quinoa rice, edamame, berries, almonds, and a choice of fish. Back in February, the National Fisheries Institute (NFI) stated that while it welcomed “more food choices for consumers, it’s wrong for [plant-based protein imitation] companies to make false sustainability and nutrition claims about seafood in an effort to sell their plant-based products.” “[Companies] can, and should, market their products responsibly. But if they’re being disingenuous about the nutritional value of these seafood ‘alternatives’ and making outlandish sustainability claims about fisheries and aquaculture (all while trading on seafood’s good name), they should be called what they are; snake oil salesmen… pardon… imitation snake oil salesmen,” NFI said.

FALL EDITION | 15

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Focused on the flavor of fish

What’s possible? Back in 2016, startup company Impossible Foods launched its very first product, the Impossible Burger – a patty made from plants, “for people who love to eat meat.” Founded in 2011 with a mission to “make the global food system truly sustainable by eliminating the need to make food from animals,” Impossible Foods soon saw its premier offering receive the royal treatment courtesy of a partnership with global fast food giant Burger King. From the collaboration emerged the Impossible Whopper, a new take on Burger King’s classic sandwich featuring the Impossible Burger in place of the typical meat patty. Marketed as “100% Whopper, 0% Beef,” the Impossible Whopper is now available at select Burger King locations across the United States. Coming off of this initial success, Impossible Foods has been exploring other categories where it can apply its plant-based prowess. According to a recent report from The New York Times, in June 2019, the company’s research and development team was busy diving into potential “fishless fish” products – even trialing an anchovy-flavored broth made entirely from plants for use in paella dishes. SeafoodSource contacted Impossible Foods to get the latest on its cursory venture into plant-based seafood alternatives. SEAFOODSOURCE: What are the main factors driving Impossible Foods’ venture into the “fishless fish” segment? Is this the natural next step for the company? Impossible Foods: Impossible Foods’ mission is to transform the global food system to support the planet and growing human population. Our goal is to replace animals as a food production technology by 2035, and provide consumers with meat, fish, and dairy foods that are good for both people and the planet. While the award-winning Impossible Burger was the first product we introduced, it certainly will not be the last.

16 | 2019 KEY BUYER INDUSTRY UPDATE

SEAFOODSOURCE: The Impossible Foods R&D team was reportedly able to create an anchovy-flavored broth made from plants for paella earlier this summer – have there been any further developments with this effort, or similar trial products? Impossible Foods: Our work so far has focused on analyzing the flavor of fish, which can be reproduced using heme. In case [you’re] unfamiliar, heme is a protein molecule that is found in all living things – both plants and animals – and is what makes meat taste and look like meat. It is well known as the molecule that carries oxygen in our blood and is vital for life; it is also a flavor catalyst that generates meaty flavor when heated. Heme is particularly abundant in meat, and is a direct source of iron. We do not have additional news to announce on the production of plant-based fish at this time, but it is absolutely the mission of Impossible Foods to make all meat, fish, and dairy products that consumers love directly from plants as soon as possible. Impossible Foods is currently ramping production of our Impossible Burger, and will be focused on new products in the coming years. SEAFOODSOURCE: One hallmark of the Impossible Burger is its ability to “bleed” and assume other beef-based, burger-like traits. When creating possible plant-based seafood alternatives, are there any particular seafood characteristics Impossible Foods is hoping to emulate? Impossible Foods: When developing products, the Impossible Foods’ team of scientists looks at every part of the sensory experience of eating animal proteins – flavor, aroma, texture, cooking properties, handling properties, appearance, etc. – to determine how to improve in taste, nutrition, and sustainability. These are all factors we will consider as we continue our work on fish.

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R E TA I L

Seafood sector banks on snacking innovation TO SPARK CUSTOMER INTEREST By Cliff White

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There may be no seafood company with more on the line when it comes to innovating new products than High Liner Foods. THE CANADIAN SEAFOOD GIANT, which has made its name with old-time seafood classics like fish sticks over the course of its 120year existence, has struggled as of late as customers’ tastes have shifted. Under the leadership of recently-hired president and CEO Rod Hepponstall, the company has changed course, slimmed down its stable of offerings, and loaded its resources into new product development, with a focus on snacks. “We are collaborating with industry-leading suppliers and other industry partners to ensure that High Liner has on-trend and industry-leading innovations,” Hepponstall said in a recent conference call with investors. “We’re developing and rolling out products for fast-growing, nontraditional areas like snacking, and enhancing packaging to align with changing demographics and to ensure the greatest market appeal and increased frequency of purchase.” 18 | 2019 KEY BUYER INDUSTRY UPDATE

As an example of the types of product innovation High Liner will pursue in the future, Hepponstall pointed to “fish wings,” a reference to the Alaska Wild Wings product the company unveiled in June of this year. The supplier has come out with two other new products it also considers harbingers of a more creative future: Everything Bagel Crusted Cod and Battered Haddie Bites. “I’m excited about the potential for fish wings, not only because they incorporate a well-established and popular brand and flavor – Frank’s Red Hot Sauce – to support a new type of value-added fish product,” Hepponstall said. “This innovative approach I expect you will see a lot more from High Liner Foods in the future. Using established flavors is an effective way to encourage customers to try something new.” High Liner isn’t the only seafood firm looking to inspire customers to take a second look in the seafood aisle for new and

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“Chicken of the Sea also used Seafood Expo North America as a platform for the rollout of its innovative seafood snack product – the Infusions flavored tuna cups line.”

fun culinary ideas. At the beginning of 2019, East Coast Seafood Group launched a new brand of chef-crafted retail offerings under its Salt & Sky brand. Originally appearing in Giant Eagle and Hannaford locations in the United States, the brand’s initial offerings included Lobster Macaroni Three Cheese Blend, Tuscan Shrimp and Baja Lobster Flatbreads, and Scallops with Wild Mushrooms and Gnocchi. The Salt & Sky brand, which targets modern consumer interests with its worldly flavor profiles, is a key component of East Coast Seafood Group’s current business development strategy, according to marketing director Christina Ferranti-Clift. Increased demand among consumers for value-added seafood

products with “expansive flavor profiles and new consumption opportunities, mirroring shifting attitudes across all food categories,” contributed strongly to Salt & Sky’s branding, Ferranti-Clift said. A recent study from consumption data group Mintel found that the taste of fresh fish and shellfish is a critical factor for consumers when shopping for seafood, as are the associated health benefits, which is why East Coast Seafood Group’s new brand embraces “globally inspired flavors and ingredient trends,” the company said. Each product within the brand is crafted by chefs, and does not use preservatives or artificial ingredients, Ferranti-Clift added. East Coast’s work paid off when it won the “Best New Foodservice” Seafood Excellence Award at the 2019 Seafood Expo North America event for its Lobster Macaroni & Cheese Bites, a creamy mixture of macaroni and a blend of Parmesan, asiago, and mozzarella cheeses, within a crunchy golden-brown coating. The other big winner in the 2019 Seafood Excellence Awards competition was Miami, Florida-based St. James Smokehouse, 20 | 2019 KEY BUYER INDUSTRY UPDATE

which took home the “Best New Retail” prize for its Saint Pure Salmon. The Saint Pure Salmon is hand-cured with sea salt and brown sugar, and contains a smoke profile of light, fruity notes crafted by smoking with locally-sourced Florida orange and grapefruit wood. The product is free of growth hormones, artificial preservatives, colors, and flavors, and is sliced vertically, sashimi-style, creating bitesized portions, co-owner Brendan Maher said. Other innovative seafood snacks that were named finalists in the Seafood Excellence Awards competition included Tai Foong USA’s Alaska Cod Dumplings, Pacific Seafood’s Honey Jalapeno Shrimp, OneForNeptune’s Rockfish Jerky, Cheating Gourmet’s Shrimp Ramen Noodle Bowl, and Acme Smoked Fish Corp.’s Blue Hill Bay Protein Bowl. Chicken of the Sea also used Seafood Expo North America as a platform for the rollout of its innovative seafood snack product – the Infusions flavored tuna cups line. The single-serving recyclable plastic cups hold 80 grams of shelf-stable tuna and come in four flavors – Lemon & Thyme, Sundried Tomato, Thai Chili, and Basil. And the company has worked hard to minimize the odor typically associated with canned or pouched tuna. Each Infusions cup has 20 to 22 grams of protein, are low in fat, and all are either sugar-free or very low in sugar. Craig Rexroad, Thai Union’s communications director for North America (Thai Union owns Chicken of the Sea), said the line can be found at most major grocery and mass merchandiser chains, including Meijer, Albertsons, Costco, Safeway, Harris Teeter, Publix, Walmart, and Kroger. “It’s the perfect snack,” Rexroad said.

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Buyer beware: HOW TO USE WWF’S NEW ENDANGERED MARINE SPECIES GUIDE By Madelyn Kearns

THE WORLD WILDLIFE FUND (WWF) has released a new guide aimed at buyers, retailers, chefs, and consumers identifying the 10 most at-risk seafood species and how to handle them from a sourcing standpoint. The new Endangered Marine Species Guide is meant to serve as a tool to identify the marine species that are known to be commonly concerning within seafood supply chains, such as abalone, bluefin tuna, conch, freshwater eel, grouper, sea cucumber, shark, skate and ray, sturgeon, and totoaba. Stakeholders can look to the guide, which was released at the beginning of August 2019, for “clear instructions for if or how it’s possible to source these species responsibly,” WWF said. “Since 1970, global populations of marine species utilized by humans have halved, with some of the most important species experiencing even greater declines. There are over 400 known endangered marine species linked to human consumption of seafood. With mindful sourcing, you can help protect them for the future,” states the organization in the guide’s introduction. Conceived in April 1961, WWF has long been combining its scientific foundation and global reach as a means to promote responsible modern food systems that “meet the needs of people while also respecting nature.” The organization has been working with the seafood industry in particular for more than 20 years, helping companies to transition toward more sustainable, responsible, and traceable supply chains. Its Endangered Marine Species Guide is another extension of this mission, according to WWF. “For the most part, WWF advocates that companies stay engaged with their existing supply chains and support improvement in the seafood industry overall. However, some threatened species populations need time and effort to recover, and reducing fishing pressure by removing them from procurement until measurable and impactful improvements are made is necessary,” according to the guide. By and large, seafood buyers have been made aware of the state of the world’s marine resources and the irresponsible practices driving depletions, explained Michael Griff, WWF’s manager of seafood engagement. However, they haven’t been provided with many tools or actionable steps to take to encourage constructive 22 | 2019 KEY BUYER INDUSTRY UPDATE

change. That’s something WWF’s new guide seeks to revise. “I think people are aware by now that overfishing and irresponsible fishing is a substantial threat, but what seafood buyers and consumers should do about it is not always clear,” said Griff. “With this new guide we are providing a blueprint to make it simple. Here are 10 species that we are most concerned about; here are the ones to avoid completely; and here’s how you can source the rest responsibly.” “One of the best things about this guide is that it is actionable,” he added. “We created this specifically for seafood buyers to cut through the noise of misinformation about these highly threatened species in a way that is concise and digestible, and provides the private sector with the knowledge to make smarter, more responsible purchasing decisions. Companies can operationalize this resource by socializing it with their employees and having it on hand when making procurement choices.” According to Griff, “from ideation to completion,” the guide took about a year to come to fruition, with several different experts

Free access to the guide can be found at: https://www.worldwildlife.org/publications/ endangered-marine-species-guide pitching in to make the resource comprehensive across numerous global markets. “We wanted to make sure that we took the time to capture the perspective of regional WWF Network offices to make this resource even more useful for our multinational corporate partners,” he said. “We are very excited to see it cross the finish line and get into the hands of buyer companies so that they can start utilizing it to make a difference through their purchasing.” WWF’s other regional Seafood Guides can be used in tandem with this latest release for additional, region-specific information. If or when information conflicts across resources, “WWF’s guidance is to abide by the most conservative recommendation available,” WWF said. Moving forward, Griff said WWF would be keeping a pulse on where the organization can produce and implement more guidance tools like its Endangered Marine Species Guide. “One of our team’s priorities is to develop resources that educate our partners about critical conservation issues and help them to understand the steps that they can take to make positive change. We will certainly be aiming to produce more materials that do just that,” said Griff.

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E-commerce sales soar – but seafood shoppers still wary By Christine Blank

THE FACT THAT ONLINE grocery sales are soaring is indisputable. Major grocery players – including Walmart, Target, and Amazon – are all competing for a share of the lucrative market. However, while many consumers, particularly millennials, are comfortable buying groceries online, many are wary of purchasing perishables such as seafood via e-commerce outlets. Sixty-three percent of shoppers did not purchase groceries online in the past year, according to the 2018 “Inmar e-Commerce Study: Engaging Online Grocery Shoppers In-Store and Online.” The Food Marketing Institute’s (FMI) “Power of Seafood” report indicates that when it comes to selling seafood online in particular, consumers still seem slow 24 | 2019 KEY BUYER INDUSTRY UPDATE

“Consumers are more comfortable buying meat, seafood, produce, and other perishables in-store where they can use their five senses to choose the best, freshest meals for themselves and their families.” to engage. “Aside from their primary seafood store, seafood consumers shop for their seafood at a wide variety of other places, such as seafood markets – but not online,” said the FMI report. “Consumers are more comfortable buying meat, seafood, produce, and other perishables in-store where they can use their five senses to choose the best, freshest meals for themselves and their families,” said Craig Rosenblum, regional

vice president of enterprise retail for data analytics firm Inmar. However, online retailers can “overcome that basic need to select our food using those senses” by incorporating more ways for shoppers to see and select their perishables in a virtual model, he said. “Using blockchain, for example, we can tell shoppers the story of the fish they are about to order online: where it came from and ties to local communities and farms,” Rosenblum said.

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was finalized last summer, its sales of fresh seafood and other perishable items jumped, research firm OneCickRetail said in a 2018 report. Whole Foods’ private-label line, in particular, has helped boost Amazon’s overall grocery sales. Amazon sold an estimated USD 11 million (EUR 9.9 million) worth of Whole Foods’ 365 Everyday Value natural and organic products in 2017, OneClickRetail found. The private label brand includes seafood items such as frozen fish sticks and canned albacore tuna. In addition, 31 percent of digital shoppers bought online groceries from Amazon in 2018, according to eMarketer.

“Following Amazon’s acquisition of Whole Foods, which was finalized last summer, its sales of fresh seafood and other perishable items jumped.” “With cameras placed in-case at their local store, shoppers could have a real-time view at the meat selection from their desk at work,” Rosenblum added.

Where do online grocery shoppers go? Despite consumers’ misgivings, online grocery shopping is becoming more mainstream, as most major grocery chains and mass merchandisers offer grocery pickup and delivery services. But where are most online shoppers going to buy their groceries? While Amazon is undeniably the largest online retailer globally, consumers are not necessarily looking there for groceries. Walmart Grocery, which operates in nearly every U.S. state, had 62 percent more customers in June than its nearest competitor, Instacart, which also operates nationwide, analytics firm Second Measure reported. The global retailer said that its U.S. e-commerce sales soared 37 percent in the second quarter for its 2020 fiscal year, which “includes strong growth in online grocery,” Walmart explained in a press release. Sam’s Club e-commerce sales also soared 35 percent in the quarter, Walmart confirmed. While Amazon is working on expanding its brick-and-mortar store footprint, Walmart is still king in terms of physical places that consumers can pick up their groceries – or have them delivered. Walmart U.S. now has more than 1,100 grocery delivery locations and more than 2,700 pickup locations. Additionally, Walmart.com’s NextDay delivery service now covers around 75 percent of the U.S. population, the retailer said. Amazon has been steadily expanding its physical stores’ footprints, adding more AmazonGo outlets as well as 4-Star and Amazon Books locations. And, of course, it is able to capitalize on grocery sales through its 500 Whole Foods Market locations in the United States. Following Amazon’s acquisition of Whole Foods, which 26 | 2019 KEY BUYER INDUSTRY UPDATE

However, Amazon’s physical stores segment realized USD 4.3 billion (EUR 3.8 billion) in sales in the second quarter of 2019, growing just 1 percent versus the previous year. “Expanding its push into new markets and investing in new locations could help it grab a larger share of overall retail in the U.S.,” Second Measure said. According to Second Measure, AmazonFresh is one of the few grocery delivery services in decline. “Founded more than a decade ago, AmazonFresh delivers groceries from Amazon warehouses, but it never really caught its stride. It now operates in just 15 U.S. cities and has closed operations in others,” the firm said. AmazonFresh sales dropped 19 percent in June 2019 compared to June 2018. At the same time, Amazon Prime Now’s sales nearly tripled in June – the highest growth in Second Measure’s analysis of the market. “Prime Now operates in 90 U.S. cities, and the service is included with the regular Amazon Prime membership fee,” Second Measure said. Walmart and Amazon are not the only grocery e-commerce players, either. Target, Kroger, Instacart, Peapod, Shipt, and many others are vying for their share of the digital grocery shopper’s wallet. For example, Target purchased grocery delivery company Shipt in December 2017, and Shipt’s customers have increased by 69 percent since then, Second Measure reported. Fall Edition

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