From ‘fake’ seafood to inflation to sea lice and bankruptcies, 2023 provides plenty of warnings for the year ahead.
Courtesy of IntraFish Media
Roger O’Brien, CEO of California seafood wholesaler Santa Monica Seafood, knows firsthand the challenges of selling fish and shellfish to US foodservice and retail buyers in 2023.
The year has been dominated by high inflation that has driven consumers to tighten their belts and reign in spending on groceries and restaurant dining among an array of other purchases.
The straight-talking O’Brien, while not yet quite ready to forecast what the new year will bring, said he learned 24 important lessons from the challenges of 2023.
What lessons will you take away from 2023?
I thought I would sum up 2023 lessons with some simple bullet points, all of which need no further explanation in my opinion.
- Inflation wasn’t transitory, it’s still here, it’s not going away soon, and it wasn’t Trump’s fault.
- Consumer prices at full-service restaurants have been much higher than economy-wide inflation all year. Ditto for total food costs.
- What goes up must come down – Pandemic seafood price inflation is pretty much history. But even lower pricing has not significantly helped seafood sales.
- Diversifying risk geographically and by distribution channel really pays off. It did for Santa Monica Seafood in 2023.
- Average price per pound of seafood now dwarfs the average price of chicken and pork, and even beef.
- What consumer confidence?
- Consumers were smart enough to see past the mislabeling and lies of plant-based fake seafood companies, and to realize how unhealthy and poor-tasting they are. R.I.P.
- Corporate bankruptcies are the only boom we saw this year – highest rate in a dozen years!
- All those wage increases can’t be taken back, and now employees want more since the feds have not tamed inflation.
- Generous minimum wage increases from state and local governments hurt both companies and employees. Twenty-two states have more increases effective Jan. 1, 2024.
- Bringing in better management to restructure a department really does pay off. It sure did for us.
- We started the year hoping for a 16 percent bump in revenue but will still end up with an 8.5 percent increase, all organic, along with an increase in EBITDA. I guess beggars can’t be choosy.
- If restaurants didn’t have it bad enough, now security costs have grown to be a separate line item on their financials.
- I used to think large companies can weather the storm easily. But all the large seafood companies doing business in Alaska have proven me wrong.
- 2023 started off showing signs of improvement, but the situation for the food industry, especially the seafood industry, continued to worsen as the year went along.
- The Fed is predicting GDP expansion of only 1.4 percent for all of 2024, and the possibility of a recession still has not disappeared. Oy vey!
- Despite some loosening in the labor market, it remains tight. The feds keep promising it will improve but it has been very stubborn.
- The Norwegian government won the aquaculture taxation battle with the Norwegian seafood farmers. I worry other countries will follow suit.
- Beware of government tariffs and bans on Russian and Chinese products – politics and wars sure impact our industry.
- If the seafood industry doesn’t actively fight forced labor issues, human rights groups will make the industry look like accomplices.
- Why can’t someone find an answer to all the lice, disease, and algae issues that kill mega-millions of fish each year?
- Land-based salmon farming still hasn’t been figured out. When will investors throw in the towel?
- We all miss John Connelly at the helm of NFI, but Lisa Wallenda Picard has stepped into his shoes and done a fantastic job thus far.
- Let me end on a positive – looks like Santa is helping seafood companies end the year with a strong December. Thanks Santa!