Marketing Seafood to Restaurants in the North Central Region

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North Central Regional
                                         Aquaculture Center
                                         In cooperation with USDA

       Marketing Seafood to Restaurants in the
               North Central Region
                                               by J. Rosscup Riepe
                             Department of Agricultural Economics, Purdue University
                                            West Lafayette, Indiana

Need for Market Information              foodservice outlets (primarily          firms’ purchase/sales behavior
                                         restaurants). Therefore, marketing      regarding fish/seafood in general
A marketing plan is an essential         behavior and trends exhibited by        and yellow perch and walleye in
part of a business plan. This is         restaurants deserve close attention     particular. (Details about the
especially true for products that        from the aquaculture community.         restaurant survey including the
must be niche marketed. Niche            Little is currently known about the     questionnaires used can be found in
marketing involves time and effort       restaurant market for seafood in the    Riepe 1998a or Riepe 1998b). Chain
to develop and service markets. A        North Central Region (NCR). This        restaurants were excluded from the
host of factors must be considered       report is designed to fill the gap in   survey, as were restaurants that
including choosing a product line,       market information.                     serve primarily fast food or pizza. A
targeting a market segment, identi-                                              mailing list was obtained from a
fying individual prospective buyers,                                             private company. With chain
pricing products, estimating storage     Description of Restaurants in           restaurants excluded, there were
requirements, evaluating alternative     the North Central Region                65,571 NCR restaurants in this
production methods and schedules,                                                firm’s database in June, 1996. A
examining processing capabilities,       A restaurant survey, using mail         representative sample (12%) was
and planning promotional strate-         questionnaires, was conducted in        chosen to receive survey mailings,
gies. Market information of various      the fall of 1996 and winter of 1997.    and 643 restaurants returned usable
types is needed. Consumer trends at      Questions were asked to determine       surveys.
all levels need to be examined.
Market expectations and trends                                                   Seafood purchase behavior by a
within the targeted market segment                                               restaurant may vary depending
need to be explored. Competing                                                   upon firm characteristics (e.g.,
products need to be understood.                                                  annual sales, geographic location,
Accurate, reliable market informa-                                               formality, etc.). Some firm charac-
tion is essential to devising a useful                                           teristics seem to affect purchase
marketing plan.                                                                  behavior while others do not.
                                                                                 Survey data on the characteristics of
One of the largest markets for                                                   the NCR restaurants are given
                                              North Central Regional
seafood in the U.S. is restaurants.                                              below.
                                               Aquaculture Center
Seafood Business reported that, in            Fact Sheet Series #110
1993, consumers spent about two-                 USDA grant # 95-38500-1410
                                                                                 Population Density of Location
thirds of their seafood dollars in                    May 1999                   Almost two-thirds of the respond-
(n = 641)

                                                   10%
                                                                        Urban

                                                                        Suburban
                                                           14%
                                                                        Mid-Size Metro Areas

                                                                        Small Town/Rural (less
                                                                        than 100,000)
                              61%                           15%

                           Figure 1. Population density of location for restaurants
                                     in the North Central Region.

ing NCR restaurants are located in      best sellers (each was asked to list       casual or how formal a restaurant
small towns or rural population         up to five species). On average,           tends to be. Typically, the less
centers of fewer than 100,000 people    about 22% of a typical NCR                 spent per evening meal, the more
(Figure 1). Only 10% of the respon-     restaurant’s total food sales is from      casual the restaurant’s atmosphere.
dents are located in major urban        seafood. Weekly seafood sales              More restaurants in the NCR tend
centers. In stark contrast, about 60%   during the summer of 1996 aver-            to be casual than formal. Over 80%
of East Coast restaurants are located   aged about $2,800.                         of the responding restaurants
in urban centers, while less than                                                  reported that an average check per
10% are located in rural areas (Gall    Menu Theme                                 person for an evening meal is less
and O’Dierno 1995 ). These large        American food is the most popular          than $15 (Figure 2).
differences in surrounding popula-      type of restaurant food in the NCR.
tion density may cause differences      Almost two-thirds of the respond-          Annual Gross Sales Volume
in seafood purchasing behavior          ing restaurants reported serving           Restaurants in the NCR tend to
between regions. Thus, market           primarily American food. Ethnic            have slightly lower sales volumes
information from national surveys       food ranked a distant second (20%).        per establishment than all U.S.
or from surveys for other regions       Just over 10% primarily serve a            restaurants. Just over one-third
could be misleading for aquaculture     combination of steak and seafood.          (37%) of NCR restaurants have sales
in the NCR.                             Very few restaurants primarily             of $250,000 or less (Figure 3), while
                                        serve only steak or only seafood.          the 1992 national figure is 40%
Seafood Popularity                                                                 (Restaurants USA June/July 1995).
Seafood is universally popular in       Formality: Restaurant                      Also, 25% of restaurants nationally
NCR restaurants. Over 90% of the        Atmosphere                                 have $1 million or more in sales,
survey respondents reported             The average dinner check per               while the NCR percentage is only
having fish or seafood as a menu        person reveals how much a                  15%.
entree. Responding restaurants          restaurant’s meals typically cost. It
reported over 50 different species as   also provides some insight into how

                                                             2
Seafood Product Preferences              they must compete with in the NCR         favorites; yellow perch, walleye,
                                         restaurant market (as well as             and lake whitefish. Catfish is more
Information on seafood product           competing non-seafood food                widely consumed in NCR restau-
preferences is vital to aquaculturists   products such as poultry, beef,           rants than are the regional favorites.
for accurately planning production       pizza, etc.). To this end, restaurant
systems, designing marketing             managers responding to the NCR            Best selling species were deter-
strategies, and developing business      seafood marketing survey were             mined based on alternative group-
plans and enterprise budgets.            asked to list the top five best selling   ings of restaurants for selected firm
Market information on product            species in their restaurants. The best    characteristics. This was done to
preferences tells aquaculturists         selling seafood species in NCR            discover whether these characteris-
what is currently offered for sale in    restaurants are about the same as         tics resulted in a different mix of
the marketplace. Aquaculturists          the best sellers in restaurants and       popular species. While shrimp, cod,
who are not prepared to produce          retail stores nationwide. Shrimp          and salmon dominate the best
and market seafood products              dominates the NCR’s best seller list,     selling lists, there are some differ-
according to common market               followed by cod and salmon (Table         ences in popular species based on
preferences will have to spend           1). Tuna tops the list of nationwide      firm characteristics (Table 2). Cod is
extraordinary amounts of time            best sellers, primarily because of        widely consumed, even to the point
marketing their products on their        canned tuna sales in retail stores        of rivaling shrimp in popularity, in
terms to willing restaurants or other    (National Fisheries Institute 1998).      restaurants that are located in more
firm types.                              However, fresh and frozen tuna are        rural areas, that have a low percent-
                                         also popular in restaurants in the        age of seafood sales, or that have a
Best Selling Species                     NCR as well as nationwide (Seafood        casual atmosphere. Catfish and
“Know thy competition” is a              Business May/June 1994). The only         pollock are popular in the more
timeless component of any market-        freshwater fish on the national list is   rural, more casual restaurants,
ing strategy. Aquaculturists need to     catfish, while the NCR list also          while scallops, lobster, and sword-
understand which seafood species         includes three regional, freshwater       fish are more popular in the urban,

                                                      (n = 633)
                                          4%
                                 14%
                                                                         Casual (less than $8)
                                                             36%         Mid Scale ($8 to $15)
                                                                         Formal ($15 to $25)
                                                                         Ultra-Formal (over $25)

                                  46%

                     Figure 2. Formality (based on average dinner check per person)
                               of restaurants in the North Central Region.

                                                         3
45%

      40%

      35%

      30%

      25%

      20%

      15%

      10%

       5%

       0%
               Low ($250K or less)     Medium ($250K to $500K)       High ($500K to $1M)    Very High ($1M or more)
                                                        Sales Volume

                                                          NCR        U.S.

     Figure 3. Volume of annual gross sales in restaurants: U.S. versus North Central Region
               (NCR) [n=634].

more formal restaurants. Regional        NCR restaurants. The biggest
freshwater species such as walleye,      exception to this is the popularity of      Product Form: Fresh Versus Frozen
yellow perch, and lake whitefish         catfish in Indiana, which rivals the        Restaurants in the NCR typically
are the most popular in restaurants      popularity of cod.                          purchase frozen rather than fresh
having a high percentage of sea-                                                     seafood products. Frozen seafood
food sales.                              A wide array of seafood species are         products typically account for 80%
                                         popular in restaurants in the               of NCR restaurants’ seafood pur-
Best selling seafood species also        relatively land-locked NCR. When            chases. In contrast, 75% of East
vary somewhat among states. The          all NCR restaurants are considered          Coast restaurants reported their
top five species in the three upper-     together, over 50 different species         preference for purchasing fresh
tier Great Lakes states of Michigan,     were listed as best sellers. Even           seafood (Gall and O’Dierno 1995).
Minnesota, and Wisconsin each            when smaller groupings of restau-
include one or more of the three         rants are considered, such as only          Survey results show that NCR
regional, freshwater species (Table      those located in rural areas or only        restaurants are not all the same in
3). The best selling species in the      those having a casual atmosphere,           their preferences for purchasing
three lower-tier Great Lakes states      there were typically 35-45 different        fresh or frozen seafood. Firm
of Illinois, Indiana, and Ohio           species listed by one or more               characteristics leading to higher
generally follow the pattern for all     restaurants as best sellers.                than average purchases of fresh

                                                                 4
Table 1. Best selling seafood species: North Central Region (restaurants)
                versus U.S. (foodservice and retail).

                             NCR (n=585)                                 U.S.
                            75% Shrimpa                              26.5% Tunab
                            50%        Cod                           20.7%       Shrimp
                            28%        Salmon                        13.4%       Salmon
                            21%        Pollock                       11.9%       Cod
                            19%        Catfish                         7.6%      Pollock
                            19%        Scallops                        7.4%      Catfish
                            17%        Tuna                            4.3%      Clams
                            14%        Orange Roughy                   3.2%      Flatfish
                            13%        Lobster                         2.8%      Crab
                            13%        Yellow Perch                    2.2%      Scallops
                            13%        Walleye
                            12%        Crab
                            10%        Lake Whitefish
                            10%        Halibut

       a
        Percentages do not sum to 100 because each responding restaurant was able to list five
       species as best sellers.
       b
       Percentages sum to 100 based on 1996 U.S. per capita consumption data by species.
       Data were obtained from the website of the National Fisheries Institute.

seafood products include higher          and greater flexibility. Decisions on   choose fillets when purchasing
population density, more formal          production location, timing of          walleye and yellow perch. Never-
atmosphere, higher gross sales, and      production, market location, storage    theless, there are differences in how
a higher proportion of seafood sales     needs, and investment in freezing       these species’ products are mar-
(Table 4).                               technologies are all affected by        keted. Yellow perch fillets are all
                                         market acceptance of frozen as well     basically similar, with perhaps
While some NCR restaurants are           as fresh aquaculture products.          slight differences in size. Fresh
more likely to purchase a higher                                                 fillets appear to be marketed
proportion of fresh seafood prod-        Product Form: Size, and                 slightly larger in size than frozen
ucts, frozen seafood products            Processed Versus Unprocessed            fillets. The data for walleye are
appear to be acceptable to many          Market information on acceptable        different, mainly due to the wider
restaurants in the NCR. The accept-      product forms (round, fillet, etc.)     range of alternative fillet products.
ability of both fresh and frozen         and product sizes must be specific      For instance, walleye fillets are sold
seafood products gives aquacultur-       to species. Survey data show that       both skin-on and skinless. The skin-
ists a wider range of opportunities      NCR restaurants overwhelmingly          on fillets are widely preferred,

                                                         5
whether fresh or frozen. Since          Riepe 1998b for detailed data on      rants prefer to buy fish in the
walleye is a bigger fish than yellow    walleye purchases by restaurants      product form they intend to put on
perch, several fillet sizes are mar-    and by wholesale firms.)              the plate. For example, if fillets will
keted. There are definite preferences                                         be served, then fillets are purchased
in the restaurant market for specific   Important generalizations about       and not round fish. NCR restau-
walleye fillet sizes. Preferred sizes   preferred fish product forms can be   rants do not appear to be interested
vary depending upon whether fresh       gleaned from various survey           in processing fish. If their most
or frozen fillets are purchased. (See   responses. One is that NCR restau-    preferred product form is not

       Table 2. Best selling seafood species in restaurants in the North Central Region,
                by firm characteristic.

                           Urban (n=61)                           Small town/rural (n=350)
                           69% Shrimp                              78% Shrimp
                           46% Salmon                              59% Cod
                           31% Scallops                            28% Pollock
                           26% Cod                                 21% Catfish
                           23% Tuna                                21% Salmon

                    High % Seafood Sales (n=103)          Low % Seafood Sales (n=127)
                         74% Shrimp                            68% Shrimp
                         36% Salmon                            61% Cod
                         34% Cod                               27% Salmon
                         27% Scallops                          23% Pollock
                         25% Walleye
                         25% Lobster
                         21% Yellow perch
                         20% Lake whitefish

                   Formal Atmosphere (n=111)              Casual Atmosphere (n=188)
                       77% Shrimp                                 70% Cod
                       61% Salmon                                 70% Shrimp
                       27% Swordfish                              33% Pollock
                       26% Cod                                    20% Catfish
                       25% Scallops                               20% Tuna
                       24% Tuna
                       20% Lobster
       a
        Percentages based on each responding restaurant being able to list five species as best
       sellers. This specific case would rightly be interpreted to mean that, of those responding
       restaurants located in urban centers, 69% listed shrimp as one of their five best selling
       species. Only those species which were reported as best sellers by 20% or more of
       respondents are included in the table.

                                                           6
Table 3. Best selling species in restaurants in the North Central Region: Top
              five by state.

                             Upper Great Lakes States
                MI (n=85)           MN (n=49)             WI (n=89)
         67%   Shrimpa          90% Shrimp            79% Shrimp
         54%   Cod              51% Cod               65% Cod
         36%   Lake whitefish   43% Walleye           33% Yellow perch
         31%   Salmon           33% Pollock           33% Scallops
         28%   Yellow perch     24 % Salmon           26 % Walleye

                           Lower Great Lakes States
               IL (n=80)           IN (n=59)                     OH (n=88)
         74%   Shrimp           68% Shrimp                     65% Shrimp
         40%   Cod              44% Catfish                    47% Cod
         24%   Salmon           44% Cod                        33% Salmon
         23%   Orange roughy    36% Salmon                     27% Tuna
         21%   Catfish          24% Pollock                    23% Scallops,
                                                                   Pollock

                                            Western/Southern States
               IA (n=34)                  MO (n=30)          KS (n=25)                      NE (n=23)
         82%   Shrimp                   87% Shrimp       4% Shrimp                       91% Shrimp
         53%   Cod                      60% Catfish     44% Catfish                      48% Cod
         29%   Catfish                  40% Cod         40% Cod                          48% Halibut
         26%   Salmon                   37% Salmon      24% Salmon                       26% Catfish
         24%   Orange roughy            20% Tuna        24% Tuna                         26% Pollock,
                                                                                             Salmon
     a
      Percentages based on each responding restaurant being able to list five species as best
     sellers. This specific case would rightly be interpreted to mean that, of the responding
     restaurants located in the state of Michigan, 67% listed shrimp as one of their five best
     selling species.

available, restaurants are not            from the menu, than process fish in-   leased. Aquaculturists will have to
willing to go to a totally different      house.                                 contract for or develop their own
product form (e.g., from fillet to                                               processing expertise, quality
round). Restaurants would rather          Aquaculturists wanting to serve the    assurance, and sanitation proce-
take other measures, such as              restaurant market directly, there-     dures. As the aquaculture industry
switching suppliers, switching to a       fore, will have to market the pro-     develops in the NCR, it may be able
less preferred fillet size, switching     cessed product forms desired.          to sustain a processing plant,
from fresh to frozen (or vice versa),     Processing equipment and technol-      especially for a species such as
or dropping the species temporarily       ogy will have to be bought or          yellow perch which is more reliably

                                                         7
processed by hand than by ma-           determining factor. However, the        Survey data show that firm charac-
chine.                                  “packages” offered may not always       teristics, among other things, affect
                                        be identical, nor will the value that   which species are chosen. Aquacul-
Product Price                           individual restaurants place on         turists may be able to use various
Restaurants expect to pay prevail-      different parts of the “package.”.      marketing size, skinless or skin-on
ing market prices for their seafood     The restaurant will have to evaluate    fillets, and fresh or frozen fillets.
based on current and expected           and compare all competing “pack-        Aquaculturists need to work at
supply and demand conditions. All       ages” in order to select the vendor     discovering what the pricing
things being equal, cheaper is          that best fits their needs. On the      patterns are in their targeted
better. But with seafood, all things    other hand, aquaculturists need to      restaurant market segments for
are often not equal, and so price is    be effective listeners and question-    their species, in all its forms and
not necessarily the most important      ers in investigating prospective        sizes.
factor.                                 restaurant customers in order to
                                        determine whether they can pro-         Product Delivery
First, consider the situation where a   vide the desired products, services,    Restaurants in the NCR typically
restaurant faces the decision of        etc. at expected prices.                prefer weekly deliveries of seafood,
which vendor to use for purchasing                                              even when purchasing frozen
a pre-selected species. The restau-     Second, consider the situation          products. There is some interest in
rant is not merely purchasing a         where a restaurant faces the deci-      monthly deliveries of frozen
product, but is actually purchasing     sion of which species to include on     products, but this is usually by
a “package” including such things       its menu. The restaurant does not       those who purchase smaller quanti-
as a vendor relationship, service,      merely look at the latest seafood       ties. Aquaculturists need to gear
and convenience (as in one-stop         price list from a seafood wholesaler    production, processing, storage, and
shopping). If all these factors are     and choose the six lowest priced        transportation toward servicing
virtually identical across vendors,     species! There are many consider-       weekly markets. Alternatively, they
then price will certainly be the        ations involved in choosing species.    need to find customers who will

         Table 4. Percentage of seafood purchased as fresh by restaurants in the
                  North Central Region, by firm characteristics.

                         Average Fresh Purchases: 17% of All Seafood Purchases

         Population Density                                 Menu Theme
          36% Urban                                          12% American
          23% Suburban                                       24% Ethnic
          12% Small town/rural                               27% Steak/seafood combination

         Atmosphere                                         Annual Sales Volume
           4% Casual                                          9% Low
          16% Midscale                                       14% Medium
          38% Formal                                         22% High
          68% Ultra-formal                                   33% Very high

         Seafood Sales as % of Food Sales
           6% less than 10%
          29% 30% or more
          37% 40% or more

                                                            8
accept monthly deliveries and             winter months, with the possible         restaurants purchase all their “fish”
organize their businesses accord-         exception of September.                  in one place, others may customize
ingly.                                                                             their suppliers based on their
                                          Since supplies and customer              individual needs for species, fresh
Selling Duration and Frequency            demand can be cyclical in nature,        or frozen products, or other product
Restaurants in the NCR generally          aquaculturists also must prepare for     distinctions. Accordingly, questions
serve seafood year around. Even           cycles in prices paid for seafood        in the survey were worded to
yellow perch, a species which can         products. The survey data indicate       discover the differences in how
only be caught commercially during        definite fluctuations in the pricing     various seafood products typically
selected months of the year, is           of yellow perch and walleye prod-        are supplied to the restaurant
served year-round and on a daily          ucts from one month to the next.         market. The results show that NCR
basis by about two-thirds of the                                                   restaurants do indeed buy different
restaurants currently serving perch.      Familiarity with Farm-Raised Fish        types of seafood products from
The same is true of restaurants           Educational efforts directed toward      different sources. Restaurant
serving walleye.                          helping restaurant decisionmakers        characteristics influence the use of
                                          understand aquaculture and an            supplier types. There also are
Seasonality                               aquaculturist’s specific products        differences between sources of fresh
While NCR restaurants do sell             will likely be needed. Even though       versus frozen products and between
seafood year around, this does not        restaurants are already buying           sources of larger species categories
necessarily mean that customer            other aquacultured species such as       such as ocean fish versus lake fish.
demand, availability of supplies,         Atlantic salmon, shrimp, and
and prices paid are the same              catfish, the level of knowledge and      In the NCR, foodservice distributors
throughout the year. Nor should           understanding about aquaculture          are the largest source of seafood for
they be expected to be the same for       seems to be rather low. Large            restaurants, followed by seafood
every species or species grouping.        proportions of survey respondents        wholesalers and grocery wholesal-
Aquaculturists should do their            were not sure whether or not they        ers (Figure 4). In contrast, East
homework and become familiar              were purchasing any farm-raised          Coast restaurants typically buy the
with any seasonal cycles associated       yellow perch or walleye or whether       vast majority of their seafood
with the species they want to             they wanted to purchase any. In          products from seafood-specific
produce.                                  contrast, the responses of seafood       firms (Gall and O’Dierno 1995).
                                          wholesalers and retailers show           Forty percent of the respondents
Survey responses show definite            virtually no uncertainty. This lack of   also listed a secondary supplier
cycles in the availability of yellow      familiarity with aquaculture by          type. There were many more types
perch and walleye. Patterns of            restaurants has been noted before.       of firms listed as secondary suppli-
availability are likely to be different   Riepe surveyed Indiana restaurants       ers. Foodservice distributors,
among categories of seafood such as       in 1991 and found a high level of        seafood wholesalers, and grocery
ocean-caught fish, shellfish, lake        unfamiliarity with aquaculture and       wholesalers again topped the list.
fish, farm-raised fish, etc., and         its implications for seafood quality,    However, other firm types also
among species within these catego-        cost, and availability (Riepe et al.     were listed, including commercial
ries as well.                             1993).                                   and tribal fishermen, supermarkets,
                                                                                   and seafood specialty retailers.
Customer demand in restaurants
for seafood also tends to be cyclical.    Seafood Suppliers                        Which supplier type is primarily
Survey responses from NCR                                                          used and the percentage of restau-
restaurants concerning customer           Understanding the flow of seafood        rants utilizing that source, differ
demand for yellow perch or walleye        products through marketing               when restaurants are grouped
show that customer interest is            channels is important for under-         according to characteristics (Table
highest in the summer months              standing where and how to market         5). The one constant is that foodser-
(June, July, August), next highest in     aquacultured products. Restaurants       vice distributors and seafood
the spring (March, April, May), and       don’t buy “fish” or “seafood,” they      wholesalers always account for 75-
typically low during the fall and         buy specific products. While some        90 percent of seafood purchases. A

                                                          9
(n = 570)

                                       6%
                                                                                 Foodservice
                                                                                 Distributor
                                   8%
                                                                                 Seafood Wholesaler

                               23%                                               Grocery Wholesaler
                                                        63%
                                                                                 Other

                   Figure 4. Primary source of seafood purchased by restaurants in
                                     . Central Region
                             the North

restaurant is more likely to use       on the other hand, usually supply           try. As a result, aquaculturists must
seafood wholesalers as its primary     only fresh seafood products to              develop their own niche markets for
source of seafood, at the expense of   restaurants.                                their products. Niche marketing is a
foodservice distributors, if the                                                   time-intensive activity, but it is vital
restaurant: 1) is located in a more    The general patterns related to             to business success. Because 67% of
densely populated area; 2) has a       purchasing fresh versus frozen              consumers’ seafood dollars are
more formal atmosphere; 3) has a       seafood products hold true when             spent in foodservice outlets, restau-
higher annual gross sales volume;      restaurants responding to the               rants are a primary market for
and/or 4) purchases a higher           survey reported the sources of their        aquaculture products. Market
proportion of seafood in fresh form.   yellow perch or walleye products.           information on restaurants in the
                                       Fresh yellow perch or walleye fillets       NCR is needed to help aquacultur-
What types of seafood products         are purchased primarily from                ists make realistic business plans
(fresh or frozen) are NCR restau-      seafood wholesalers and second-             and decisions.
rants purchasing from their seafood    arily from foodservice distributors
suppliers? Survey data show that       (Figure 6). The roles of seafood            A 1996/97 marketing survey
restaurant seafood purchases from      wholesalers and foodservice                 provided data and ideas on market-
seafood wholesalers and seafood        distributors are reversed for frozen        ing aquaculture products to NCR
retailers are evenly split between     fillet purchases, with foodservice          restaurants for this publication.
fresh and frozen products (Figure      distributors supplying the largest          Characteristics of NCR restaurants
5). From all other supplier types,     share of frozen fillets to restaurants.     are disclosed in terms of numbers,
purchases are almost exclusively                                                   location in various types of popula-
either fresh or frozen. When restau-                                               tion centers, seafood popularity,
rants buy seafood from foodservice     Summary                                     menu themes, formality of atmo-
distributors or grocery wholesalers,                                               sphere, and sales volume. Market
they typically buy only frozen         Aquaculture in the North Central            preferences for seafood products
products. Commercial fishermen,        Region is a new, developing indus-          and marketing arrangements are

                                                           10
identified. Examined are data and       This publication provides aquacul-     outside capital for investment in the
ideas regarding restaurant prefer-      turists with factual data on the NCR   aquaculture operation. The data
ences for various species, fresh or     restaurant market for seafood. This    also can be used as a springboard
frozen products, fillets versus round   information can be used to gain a      for further, more individualized,
products, product sizes, product        better understanding of the work-      market research. Planning is crucial
price versus non-price factors,         ings of the seafood aspect of the      to business success. Without
delivery schedules, restaurant          restaurant market. A sound grasp of    accurate, realistic market informa-
selling duration and frequency,         market realities provides a solid      tion, effective market planning
seasonality of demand, supply, and      foundation for business planning by    cannot be accomplished.
price, and familiarity with farm-       aquaculturists and for
raised fish. A discussion is offered    decisionmaking by university and
of typical suppliers of seafood         government staff. A second use of
products to restaurants and which       this information is for securing
products they are providing.

            Table 5. Primary source of seafood purchased by restaurants in the
                     North Central Region, by restaurant characteristic.

                                                        Food Service            Seafood
                                                        Distributors           Wholesalers

                 Average for All Respondents                 63%                    23%

                Population Density
                 Urban                                       34%a                   51%
                 Suburban                                    49%                    39%
                 Rural                                       72%                    12%

                Formality
                 Casual                                      75%                    10%
                 Midscale                                    68%                    20%
                 Formal and Ultra Formal                     33%                    50%

                Sales Volume
                 Low                                         72%                    10%
                 Medium                                      70%                    17%
                 High                                        51%                    35%
                 Very High                                   47%                    41%

                Seafood Purchases
                 Less than 20% fresh                         63%                    23%
                 50% or more fresh                           20%                    58%
                 75% or more fresh                           17%                    65%
            a
             Percentage indicates what proportion of restaurants having the same
            characteristic (urban location in this case) reported this firm type as their
            primary source of seafood.

                                                      11
Seafood Specialty
                                                         Retailers
                                                                                            Commercial
                                                                                             Fishermen
   Fresh

                 Grocery Wholesalers

                   Foodservice Distributors

                                                     Seafood Wholesalers

            0%       10%      20%       30%   40%   50%        60%    70%       80%   90%   100%     110%
                                                      Percent

                                                        Seafood Specialty
                                                            Retailers
                   Commercial Fishermen
   Frozen

                                                                                              Grocery
                                                                                             Wholesalers
                                                                                            Foodservice
                                                                                            Distributors
                                                          Seafood Wholesalers

            0%       10%      20%       30%   40%   50%        60%       70%    80%   90%   100% 110%
                                                      Percent

Figure 5. Seafood purchases from various seafood supplier types by restaurants in the
          North Central Region: Comparison of fresh versus frozen purchases as a
          percentage of total purchases.

                                                          12
YELLOW PERCH FILLETS

                     Fresh (n=24)                                     Frozen (n=30)

         13%                        Seafood                   17%                      Seafood
                                                                         23%
                                    Wholesalers                                        Wholesalers
                                    Foodservice                                        Foodservice
                      54%           Distributors                                       Distributors
       33%
                                    Other                                              Other
                                                                60%

                                            WALLEYE FILLETS

                   Fresh (n=22)                                        Frozen (n=74)

             14%                       Seafood                 13%                      Seafood
                                                                          22%
                                       Wholesalers                                      Wholesalers
        18%                            Foodservice                                      Foodservice
                                       Distributors                                     Distributors
                      68%              Other                                            Other
                                                                65%

Figure 6. Sources of yellow perch and walleye fillets purchased by restaurants in the North
          Central Regions: Fresh versus frozen.

                                                      13
References

Gall, K. and L. O’Dierno. 1995. Aquaculture marketing survey: consumers, retail stores, and food service in New
York and New Jersey. New Jersey Department of Agriculture, New York Sea Grant, Northeast Regional Aquacul-
ture Center.

National Fisheries Institute. 1998. Website .

Restaurants USA. 1992-1996. National Restaurant Association. Washington, D. C. various issues.

Riepe, J. Rosscup, M. A. Martin, and L. F. Schrader. 1993. Indiana restaurants as a market for farm-raised fish:
results from a 1991 survey. SB-665, Department of Agricultural Economics, Department of Agricultural Research
Programs, Purdue University, West Lafayette, Indiana.

Riepe, J. Rosscup. 1998a. Yellow perch markets in the North Central Region: results of a 1996/97 survey. B-756,
Department of Agricultural Economics, Office of Agricultural Research Programs, Purdue University, West
Lafayette, Indiana.

Riepe, J. Rosscup. 1998b. Walleye markets in the North Central Region: results of a 1996/97 survey. Technical
Bulletin Series #113. North Central Regional Aquaculture Center, Iowa State University, Ames, IA.

Seafood Business. 1992-95. various issues.

                  This fact sheet was made possible by funding from the Illinois-Indiana Sea Grant Program
                         under Grant #NA76RG0596 and the United States Department of Agriculture
                                               under Grant #95-385000-1410.

            Series Editor: Joseph E. Morris, Associate Director, North Central Regional Aquaculture Center.
                                          Design by A & R Design, Ames, Iowa

                               Originally published by Iowa State University, Ames, Iowa

                             Any opinions, findings, conclusions, or recommendations
                              expressed in this publication are those of the author(s),
                                      and do not necessarily reflect the views
                                  of the United States Department of Agriculture -
                    Cooperative State Research, Education and Extension Service (USDA-CSREES)
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