Prince Edward Island Fishermen's Assoc.

From fast food to fine dining, lobster is showing up on more menus

SEAFOOD.COM NEWS [Wall Street Journal] By Sarah Nassauer - March 18, 2014 -

Lobster, long considered a luxury, is becoming a little more ordinary.

Soaring supply and falling prices for whole live lobster, along with new food trends, are changing how people eat the crustacean—perhaps for the long term.

Sandwich shop Quiznos, like other inexpensive chains, is adding more lobster dishes alongside its subs. Golden Corral, the buffet-style restaurants, has put lobster on the menu for the first time. Grocery stores from Whole Foods to Wal-Mart are stocking new lobster items such as frozen tails and cooked claws.

The most expensive restaurants are going beyond classic whole lobster or lobster tail and putting the crustacean in dishes such as pasta, soups and even chips.

It is a rare dynamic in today's food world: Supply of lobster is plentiful and pushing down prices. This comes at a time when rising commodity costs are boosting the price of foods like beef and coffee. The supply of North Atlantic lobsters has steadily climbed for over a decade.

Supply is likely growing because of a combination of factors. Warming water in recent years may be boosting lobster population. Fishermen are following regulations that protect young and egg-bearing lobsters. And there has been a decline in recent decades of natural predators such as cod, which eat baby lobsters.

Lobster fishermen groups in the U.S. and Canada, the main areas where lobster is caught for the American market, say retail prices have fallen. In the past two years, the average price that Maine fishermen are paid for whole live lobster has been under $3 per pound, down from a high of $4.63 in 2005, according to the Maine Department of Marine Resources.

Lobster prices can vary widely across the country. Many restaurants buy in bulk to lock in a good price.

"When you increase supply by 80% in five years," it is hard for prices to keep up when consumer spending is weak, says Patrice McCarron, executive director of the Maine Lobstermen's Association, which represent the state's fishermen.

There are signs lobster prices are beginning to inch up. In 2013, prices paid to Maine fishermen rose slightly to an average of $2.89 per pound from $2.69 per pound in 2012. The amount of lobsters caught started to level off.

Inexpensive chain restaurants have jumped at the chance to add lobster's premium image to their menus.

Golden Corral bought 200,000 pounds of frozen lobster tails last August. It paid $3.79 per tail, or about $13 a pound—an approximately 20-year low for the restaurant, says Bob McDevitt, senior vice president of franchising for the 500-location Raleigh, N.C.-based chain. (By the time a restaurant buys lobster, its price has gone up as the supply chain can include wharf fees, a cut for dealers or wholesalers and processing-plant costs.)

Golden Corral is now thawing the tails for a limited-time special, a common practice with tails served at inexpensive restaurants. (The tails have a 12-month frozen shelf life, Mr. McDevitt says.) The special is timed to lure diners after a cold winter that kept them eating at home, he says. At $3.99 a tail, the company isn't making a profit on the special, but it is likely to boost sales of buffet dinners, he says.

Among national chains, lobster appeared on 35% more menus in 2013 compared with 2009, according to Datassential, a menu research and consultancy company based in Chicago.

At many high-end restaurants, classic whole lobster and tail dishes are seen as passé and therefore offered less "despite the price drop," says Maeve Webster, senior director at Datassential. Instead, lobster rolls, lobster salad and lobster bisque are growing in popularity.

When off-the-boat prices for lobster were plummeting about two years ago, Gramercy Tavern in New York switched to a lobster supplier who buys directly from Maine fishermen, reducing the restaurant's cost per pound by about $3, says Howard Kalachnikoff, executive sous chef at the one-Michelin-star restaurant. Gramercy Tavern is buying lobster for $8.25 a pound, or comparable with the best cuts of beef, allowing chefs "a little bit more experimentation," he says.

Lobster is on the menu in a pappardelle, chorizo and mussels dish; in a salad with winter squash; as a base for sauce on a flounder, a wild rice dish; and incorporated into an airy chip served with lime aioli.

The priciest restaurants "do not lower [menu prices] when lobster gets cheaper," says Jordan Elkin, president and founder of Homarus, which buys live lobster directly from Maine fishermen and sells to about 300 high-end restaurants in New York, including Gramercy Tavern. Those restaurants know diners will pay a premium for lobster, Mr. Elkin says.

At L2O in Chicago, a seafood restaurant where the lowest-priced dinner is a prix fixe meal for $140 per person, lobster is now more often paired with pricey ingredients, says Matthew Kirkley, the restaurant's chef.

"I'm serving sweetbread and truffles with lobster," because of his current $8 a pound wholesale price (which doesn't include overnight shipping by FedEx) says Mr. Kirkley. Usually pairing "$600-a-pound black truffles" with pricey lobster in one dish would be cost prohibitive, he says.

The lobster eaten most often in the U.S. is Homarus americanus, the only species with two large claws that is caught along the north Atlantic coast in Canada and the U.S.

Because of differences in weather, fishing seasons and fishing regulations, most hard-shell (and therefore easily shipped) live lobster is procured in Canada, while most soft-shell lobster (sold live in New England, but difficult to ship longer distances) is caught in the U.S. (A lobster has a hard shell before it molts and then grows a new soft shell.)

A large amount of soft-shell lobster caught in New England is sent to processing plants in Canada, destined to become frozen tails or precooked knuckle and claw meat.

In summer, when fishing is easiest, New England is flooded with inexpensive live soft shell lobster that doesn't make it to other parts of the country.

Canada's lobster industry has faced supply levels that are "up about 50% in the last 10 years," driving down prices, says Geoff Irvine, executive director of the Lobster Council of Canada, which represents buyers, shippers, processors and fishermen.

Whole Foods Market Inc. paid less for its frozen lobster tails last year, then dropped its price to shoppers, says a spokeswoman for the store, who declined to give specific pricing details.

Wal-Mart in the past 12 months added three new lobster products, including a frozen lobster tail and cooked whole lobster, says a spokeswoman for Wal-Mart Stores Inc.

While it is unlikely to challenge home cooks' love of chicken as a quick, cheap, easy dinner, the lobster industry is trying by investing in new high-pressure machines to burst raw lobster meat from its shell into an easy-to-cook form.

Ken Coons
Seafood.com News 1-781-861-1441
Email comments to kencoons@seafood.com