Demand for Canned Tuna Stays Strong
Sales Hit Record Highs
For decades, canned tuna producers struggled with declining sales and a consumer base that thought of their products as old-fashioned. Then the coronavirus pandemic hit, and sales of canned tuna went through the roof. Analysts say this trend is likely to continue for some time.
Bumble Bee Foods reported that sales of canned and pouched tuna rose 100% between mid-March and early April. Costco (COST) placed limits on how much tuna people could buy when panic-purchasing began. This was not just a temporary surge in sales. Canned tuna has continued to fly off shelves since the pandemic began.
Due to supply chain constraints, producers are having a difficult time keeping up with the demand increase. Retailers have been able to keep tuna prices stable so far, but wholesale tuna prices have spiked 41% since last year. This contrasts with trends in other wholesale seafood markets, where prices are dropping sharply due to restaurant closures.
The Canned Tuna Supply Chain
The tuna supply chain is long and complicated. About 40% of commercial tuna is caught in the western and central Pacific Ocean near very small countries like Tuvalu and Kiribati. Then, the fish is processed on Pacific islands, or in Asia or South America. Often, it then makes its way to a third country to be canned before reaching its final destination in a grocery store.
Though it has been a successful year for tuna fishing, border issues related to the pandemic have caused bottlenecks in the supply chain. Demand for tuna shows little sign of slowing down, and producers are working to streamline their processes.
More Than Just Panic Buying
Analysts have been surprised by the longevity of the canned tuna boom since the pandemic began. Many believe that this trend is here to stay, at least for a while. Joerg Ayrle, the CFO of Thai Union (TU:TB) which owns the tuna brand Chicken of the Sea explained , “People are asking, is this pantry-loading? Is this consumption? I would say, every pantry-loading leads to higher consumption. People are not just leaving that in their pantry. They are consuming it.”
Tuna is one of the cheapest protein sources available, costing as little as $1 per 5-ounce can. People may keep consuming tuna, not just because it lasts long and is a good way to avoid frequent trips to the store, but because it is cost-effective.
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