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Pensacola seafood markets face no-win choice amid pandemic: Raise prices or cut stock

It’s easy to feel frustration as more restaurants across Pensacola have begun either downsizing seafood offerings or adding the words “market price” to their menus to explain steeper price tags.

What consumers may not realize is that the price unpredictability customers are experiencing is just as much of a shock to seafood vendors when placing their orders, retailers say.

Costs now fluctuate on a week-to-week basis, leaving seafood buyers with little choice but to pay the high price to keep up with the demand for seafood that has risen over the course of the pandemic.

Pensacola seafood retailers ‘up against the wall’

Retailers have been left with a difficult decision: either bump up the prices to still make a profit or take a hit in profits to please customers. But that can only go on so long, and after a while something must give, retailers say.

“You almost have to take a hit because the prices are so crazy,” said Roy Boyer, general manager of Maria’s Fresh Seafood Market on Cervantes. “The prices, to me, have shot up every week you try to order something. There’s no such thing as ‘reasonable’… they (retailers) are up against the wall.”

Maria Goldberg, marketing director for Great Southern Restaurants, said The Fish House in Pensacola, so far, has been able to withhold from raising menu prices. She the company has decided to “wait it out” for the market to readjust itself, despite the exponential price increase in some of their menu staples.

Items like The Fish House’s signature grouper sandwich are a constant on the menu, but the price for grouper has risen from $15.99 per pound in January 2020 to now $23.95 per pound in January 2022, Goldberg said.

She said The Fish House saw a comparable price fluctuation during the Deepwater Horizon oil spill of 2010, but eventually the market corrected course. She hopes that the increases seen through the pandemic years will follow suit.

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Doug Lewis, employee for John Seafood on Ninth Avenue, said the nearly three-month-old seafood restaurant faced scrutiny from the public this past month for its crawfish prices, selling at $9.49 per pound. In an attempt to maintain its reputation of affordability, the restaurant chose to come down to $6.49 a pound at the new business’ own expense.

Lewis said this can only be done so much before it defeats the purpose of selling the product in the first place.

The seafood itself isn’t the only thing that has continued to rise, but also the everyday items that contribute to the product on the plate.

Robbie Orgeron, president of Felix’s Restaurant Group, said factors such as the shortages in crackers and increased costs for cooking oil also impact menu prices.

Blue crab at Maria's Fresh Seafood Market in Pensacola is pictured Thursday.

“Oil has went up almost 50% over the past eight months,” Orgeron said.

As far as the product itself, he said his regular shipments can vary from week to week, ranging in price anywhere from $34 to $50 per 100 oysters.

This past year, oysters primarily settled at the $50 mark, which adds up quickly when there are still bills to pay and paychecks to sign.

“I think people don’t understand if they’re paying more at the grocer, we’re paying more here,” Orgeron said. “People have this misconception that we’re getting wholesale, that we pay so much less, and it’s not true.”

Global domino effect creating local challenges

Boyer said relying on local Gulf of Mexico seafood exclusively is not an option, considering sourcing seafood from domestic waters brings challenges of its own.

One major issue is the controls in place for certain species of fish, such as redfish. He said without allowing a commercial fishing season for the fish to be caught, they consume many of the desirable types of seafood that could be caught and sold, such as shrimp, crab and juvenile fish.

While the abundance of redfish is ideal for sport fisherman, Boyer said the excess has hurt commercial fishermen who now are left with slim pickings. This shortcoming then creates a dependency on wholesalers to track down and order seafood where it is in greater supply.

Snorri Gislason, economist at University of West Florida and president of Global Trading LLC, said the issues local retailers are facing stretch across the globe.

Gislason, who specializes in seafood trading around the world, said the pandemic-related disruption has caused transportation and shipping delays that are still very present heading into 2022.

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The bulk of seafood consumed in Pensacola likely comes from China, Vietnam or Thailand, Gislason said. She also noted there are limitations on how much seafood can be produced locally from the Gulf.

When imported fish are packaged and shipped out, it’s not uncommon for transit to take up to three weeks. During this time, expenses for storage are mount up, as do lost opportunity costs — the money that retailers could have if they’d had the product to sell, as opposed to waiting around for it to arrive.

In addition, labor shortages, misallocation of shipping containers and increased prices on fuel have created significant price increases just to get the seafood from point A to point B. The price then reflects these challenges. Some orders Gislason has seen have become six times as expensive to transport.

“We all expected that to be fixed by now. … It hasn’t,” Gislason said.

Seafood wholesalers treading in hot water

Steven Rash, president of the Panhandle’s largest wholesale seafood distributor, Water Street Seafood in Apalachicola, said several local restaurants depend on them for access to products sourced outside the region. Oysters and clams, for example, are a common order from Joe Patti’s Seafood on South B Street.

Some of the top-selling products, such as snow crab and king crab sourced primarily out of Alaska and Canada, have risen in price by 300% since the pandemic began, Rash said.

Other seafood sourced from Asia that used to cost $4,000 or $5,000 now costs them $25,000, in addition to the weeks, sometimes months, of backlog.

“Prices for most seafood now are higher than they’ve ever been,” Rash said. “I mean, super, all-time highs.”

These extra costs placed on the wholesaler are carried over to the local retailers and are then passed along to the consumer, Rash explained.

“Depending on the item, some things are triple the price. So, restaurants and retail markets and all that, really have to work a lot harder and spend a lot more money to offer the products that they normally offer,” he said.

When asked if restaurants will eventually need to raise prices, Rash said he does not see any other option.

Bill Huth, UWF professor and marine-related economist, said COVID-19-related retirement in the fishing industry has also created a hole in the fishery business he anticipates will be difficult to fill.

With more people exiting the workforce and the increasing demand for seafood now that more are cooking from home, the demand for fresh seafood is at a new high that cannot be easily be met.

Manager Marcus Jolly weighs fish for a customer at Maria's Fresh Seafood Market in Pensacola on Thursday.

“Just the fact we’re in an inflationary period compounds the other issues that arise … supply chain issues, worker shortages, those sort of things.” he said. “So you’ve got increasing demand, and decreasing supply, that basically just lends itself to rising prices.”

He said with each new variant of the virus extending the pandemic, the instability of the workforce continues.

“I think a lot of that has been pandemic-oriented. The pandemic really threw a wrench into the works of everything,” he said. “You can see the markets trying to adjust to that, but unfortunately, some of the adjustments aren’t just simple changes in prices, they’re sort of structural. When you have, for example, people that were in the fishing business leaving and going into construction, they leave, and they don’t come back.”