The global COVID-19 pandemic has been a mixed bag for the seafood industry, with retailers notching record seafood sales and the category as a whole seeing gains, even as the foodservice industry virtually collapsed.
That downturn is expected to change direction this year, with foodservice operators optimistic about 2021. Seafood company CEOs and advisors, speaking during the National Fisheries lnstitute’s Global Seafood Market Conference’s economic outlook panel, also expressed optimism about the industry’s recovery. While in the short-term the rebound may be slight, as trend experts have predicted, once relative normalcy returns demand could see a big boost.
“I think the euphoria of people once we get through this is going to be incredible [and] we’re going to see a fast and quick recovery,” Cooke Aquaculture CEO Glenn Cooke said during the panel.
Due to travel restrictions, office closures, and lockdowns, most people haven’t been able to enjoy the restaurant experiences they’re familiar with for months. Cooke and other panel members predicted that will cause a sharp rebound once things reopen.
“As soon as they are vaccinated or in some cases earlier, as the warm weather comes, people are going to escape the cage,” Antarctica Advisors LLC Managing Partner Ignacio Kleiman said.
That recovery, Clearwater CEO Ian Smith said, won’t be “V” shaped, but will resemble more of “U” shape on trendlines as vaccines begin to roll out.
“I think there are a lot of factors that are going to come into play in terms of how fast foodservice recovers,” Smith said. “It’s going to depend on a host of factors, including how quickly these vaccines work, how effective they are at preventing COVID, preventing serious illness from
COVID, and what are the public health restrictions going to be like.”
Kleiman predicted the recovery from the current downturn will be very different from the recovery that was seen following the 2008 financial crisis.
“This is a health crisis that turned into an economic crisis,” he said. The root cause of the economic crisis – particularly for foodservice operators – stems directly from the forced isolation. “In order to go and enjoy a service, you have to go and do it in person. It being a health crisis, you can’t go interact with other people.”
Once interaction is back on the menu, the pent-up demand could springboard the recovery, depending on how the foodservice industry can react.
“The key is, to me, is how financially damaged is the restaurant trade, and how fast they can recover,” Cooke said. “I think we’re going to see some serious life in the third quarter, and probably very close in the fourth.”
Other aspects of foodservice, however, may take time to recover. Smith predicted business-related travel spending will be slower to recover than normal foodservice spending.
“Everybody is taking a look at how much they’ve spent on business travel and entertainment in the past, and how much they’ve saved, and I haven’t heard anyone say we want to go back to what we were spending before,” he said.
Cooke said based on prior trends, business travel may come back slowly, but it will come back.
“I think there will be a lag in business travel, a lag in some of the expenses from business, but it will trickle back,” he said.
Another region that could lag behind is China, but Smith predicted next year’s Chinese New Year will see high levels of spending on seafood.
Smith said his company is already planning ahead for the 2022 Chinese New Year due to the anticipated demand.
“China had a pre-empted Chinese New Year celebration in 2020, and it’s pre-empted again because of restrictions on travel and social gatherings due to the continuing risk of COVID-19 infection,” Smith said. “I am predicting that for Chinese New Year 2022, when really they’ve gotten beyond all of the issues around maintaining and containing COVID-19 infection, that it’s going to be absolutely colossal.”
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