Lobster’s Competition in the Marketplace

by Sandra Dinsmore

This past summer the top-three-selling seafoods at Blue Hill’s Trade Winds supermarket were swordfish, at $13.99/lb., wild-caught sockeye and farmed salmon at $13.99/lb. and $10.99/lb. respectively, and Atlantic dry sea scallops at $18.99/lb. But Trade Winds’ prices may not have been fair to lobster. Portland’s venerable Harbor Fish Market had on its website, as of September 14th, live 1 to 1 1/8 lb. shedders were on special at $4.99/lb. as were live jumbos at $7.99/lb. and live culls at $4.49/lb. Sandra Dinsmore photo

Price plays a huge role in the kind of seafood a wholesale customer buys. No question about it. As a Maine lobster wholesaler who sells to supermarket chains reported, “It’s all about price.” And, of course, shellfish allergies also play a big role in the choice of fish over lobster. But Michael Pugliese of Steuben, 38-year veteran fishmonger and owner of Westerly, Rhode Island’s “The Fishery,” thinks retail live lobster doesn’t really have competition. “When people come into a fish market, they pretty much know what they want,” Pugliese said recently. “Generally, I think the only things that will sway people are either the price or that they don’t like lobster.” The exception, Pugliese said: people who haven’t had live lobster yet this season. Then, despite high prices, he said of customers, “They’re going to have it anyway.”

Pugliese also mentioned the seasonal aspect of live lobster, saying, “Don’t forget the retail side of the industry is the most synonymous with the season than anything else in the food business.”

He asked rhetorically, “When people are at the beach and it’s 85 degrees, and they’re having a good time, and they’re having a couple of drinks, and they’re out in the sun, what are they thinking about?”

He answered himself, “Steamers, lobsters, littlenecks. That’s it.”

This past summer, though, the top-three-selling seafoods at Blue Hill’s Trade Winds supermarket were swordfish, at $13.99/lb., wild-caught sockeye and farmed salmon at $13.99/lb. and $10.99/lb. respectively, and Atlantic dry sea scallops at $18.99/lb. (According to Pugliese, a lb. of scallops feeds two to three people. “We recommend 8 oz. of most fish per person,” he said. “That’s average. A heavy or a big guy at 225 or 250 lbs. could eat a lb. of fish or more.” Others recommend 4 to 6 oz. portions.)

But Trade Winds’ prices may not have been fair to lobster. The store’s lobster tank had broken, so seafood personnel could only take orders for live soft shell lobster at $6.49/lb. According to Trade Winds manager Bonnie Tokas, though, the store carries frozen shrimp from salad size at $10.98/lb. up to jumbos at $15.99/lb. and raw shrimp from $9.99 to $14.99/lb. Fresh Stonington crabmeat costs $12.49 for 8 oz. ($24.98/lb.) and frozen processed lobster meat sells for $13.99 for 7 oz. ($31.98/lb.) Pugliese said fresh lobster can cost $50/lb. in a store.

Not so for Portland’s venerable Harbor Fish Market. According to its website, as of September 14th, live 1 to 1 1/8 lb. shedders were on special at $4.99/lb. as were live jumbos at $7.99/lb. and live culls at $4.49/lb.

The formula for pricing fresh lobster meat according to Rob Bauer, general manager of Beal’s Lobster Pier in Southwest Harbor, is 5 x the boat price + $4/lb. for picking and cooking. With the boat price at $4/lb. in September, fresh lobster meat started at $20 + $4 or $24/lb. Major processor Spiros Tourkakis, vice-president of Massachusetts-based East Coast Seafood and Prospect Harbor’s Maine Fair Trade Lobster, suggests going with the acquisition cost, which he considers the biggest factor in pricing. Bauer agreed adding that both wholesalers and retailers determine prices based on the cost of the meat and how much profit the company needs to make.

Because costs vary, Tourkakis said, “Yield, which depends on the time of year, affects pricing as do supply and demand.” (He starts with yield cost plus labor, overhead, transportation, “Plus, when there is room, a reasonable profit.” Although he agrees it takes four hard shells to make a lb. of meat, he said it takes eight “really new shells” to make that lb. The average, Tourkakis said, is five lobsters. He added that his companies and some other processors have special equipment that extracts meat from the legs, which increases the yield per lobster.

But lobster was not a top seller at Pugliese’s fish market last summer. Tops were salmon and swordfish. He said, “Lobsters were probably number three.” He called shrimp sales huge and said that, year round, shrimp was probably number three or four. But he maintained, “I truly don’t think that there’s competition with, like, fish against lobster. Swordfish ran $15.99/lb. all summer long. The good salmon, whether it be wild or the organic stuff that we sell, was right up in the same category. So it’s not a price thing as it is a love for whatever it is they’re buying.”

Tourkakis, on the other hand, said unequivocally, “The biggest competitor to lobster is shrimp, and then crab. “Lobster meat is more expensive than shrimp, but whole lobster is less expensive,” adding, “any upper scale fish competes.” But, Tourkakis agreed with Pugliese, saying, “Normally, when people go to buy lobster, it’s a destination item. You go with lobster in mind. You don’t walk around window-shopping because, relatively speaking, it’s rather pricey. You go there to get the product.”

You know where you stand with a lobster. It has a hard shell, soft shell, or firm shell and is either flexing its back and kicking its legs, angry at being held, or barely moving and obviously weak. If it isn’t angry, you don’t want it. But lobster aside, fishmonger Pugliese spoke of consumer ignorance when it comes to species identification and quality. Dartmouth, MA attorney John Whiteside, Jr., who represents and advocates for seafood companies and associations from Maine to North Carolina, recommends that consumers visit www.fishwatch.gov. He calls it “a fantastic website for consumers,” saying, “You can learn all kinds of information on dozens of species of fish in US waters. It’s clear, it’s concise, and updated regularly using the best available science because it’s run by NOAA [National Oceanic and Atmospheric Administration] fisheries.”

An industry insider who asked not to be named mentioned packaged fish and lobster such as, say, a special on a 4 oz. tail going for $5/tail. “But, really, it’s not,” he said. “It’s probably closer to $3 ounces, and the shell is going to make up another ounce, so you’re really paying $5 for 2 ounces.” The insider also spoke of seafood coming in a wide range of grades. “You can get Japanese Hokaido scallops in frozen containers for $6.50/lb.,” he said. “But that’s a very different quality, texture, consistency, everything from US Atlantic sea scallops. The same differences in quality apply to swordfish, halibut, tuna, and other seafood.”

Speaking of fillet houses in Boston and New Bedford that treat fish with a chemical called Sodium Tripolyphosphate, which makes seafood soaked in it weigh more and appear shinier, as well as cheap fish from Asia that has been frozen any number of times, Pugliese argued, “There are all kinds of games being played. The average person can’t afford to eat good fish every night because he doesn’t make enough money.”

But that’s a story for another day. Pugliese reported, “Certainly 30 to 40 percent of customers who come in on a busy summer weekend want lobster.”

Whiteside agreed, saying, “I think the iconic Maine lobster is unique in the marketplace. It is in a class by itself.”