Sizzle Sales with Frozen Foods
Retailers have had great success offering customers frozen aquarium diets, which offer a competitive advantage and attractive margins for local fish stores.
The market for frozen aquarium foods has matured, with many stores carrying them as standard fare—especially among retailers who cater to high-end reef hobbyists and customers looking to optimize nutrition for their fish.
Though frozen offerings require greater investment and infrastructure to maintain, they offer independent pet specialty retailers higher profit margins, help retain customer loyalty, and act as a competitive buffer against online competition, industry participants reported.
“Based on any survey we have ever seen, frozen food customers tend to visit the store up to 11 times more frequently than nonfrozen food customers,” said Chris Clevers, president of Hikari Sales USA in Hayward, Calif. “This is a big incentive for retailers to get their customers on to frozen foods. It lets them open that consumer up to multiple impulse sales opportunities and offers them less online competition to have to battle.”
Frozen foods have helped the hobby a great deal in the past several years, industry participants reported, allowing fish keepers to healthfully maintain a wider variety of species. Hobbyists are somewhat split on whether to offer frozen foods as the main component of aquarium inhabitants’ diets or to use frozen foods as intermittent treats.
“People tend to do the opposite of what should be done,” said Anthony Johnson, owner of Reef Life Aquatic in Palatka, Fla. “They use the frozen foods as supplemental feeding, and they like to use their dry foods because it’s convenient. I’d love to see them do it the other way around and begin using their frozen foods for their meat-and-potatoes primary feedings, and just use the dry foods intermittently.”
It makes sense for retailers to help direct customers toward offering more frozen foods, as it can help with overall aquarium inhabitant health, and boost traffic in their stores, which are often customers’ only source of frozen offerings.
“The average customer is feeding their fish just pelleted food or just flake food, and we encourage the use of frozen food as they get a bigger variety of fish,” said Howard “Howie” Berkowitz, owner of Aquaridise in East Brunswick, N.J. “They really need to diversify the food that they’re feeding, and frozen food is probably, at least in our opinion, the best choice for most marine fish.”
Ultimately, it comes down to nutrition, and it’s incumbent upon retailers to help customers understand their options to maximize fish health.
“Marine fish require a specific amount of proteins, carbohydrates, vitamins, minerals and amino acids to stay healthy,” Clevers said. “Without using a formulated food as the baseline staple for their feeding regime, they may be running into health issues as time progresses. Even our foods, many of which are gut loaded with bio-encapsulated vitamins and minerals we know marine fish need, should not be relied on as the only food a fish is being fed.”
Most customers will buy directly from local fish stores, and not many nonspecialty retailers carry frozen offerings, according to retailers. Some customers prefer to buy in bulk, as well.
“Customers usually like buying it from the store, I noticed,” said Kevork Tarakjian, owner of Blue Planet Aquarium in Fresno, Calif. “Sometimes people buy it in bulk. It depends on what kind of hobbyist they are.”
Especially on the marine side of the hobby, offering frozen foods makes a lot of sense for retailers.
“Frozen food is the go-to choice for most marine hobbyists,” Clevers said. “They feel using frozen food allows them to more closely mimic what their fish would be eating on the reef. Retailers prefer frozen food because it keeps customers coming back to their store more frequently, which is great for business.”
Coming Down the Pike
There are a few new offerings on the horizon in the frozen aquarium foods category.
Hikari will be releasing reef-related products in the next quarter or so, said Chris Clevers, president of Hikari Sales USA in Hayward, Calif. However, regulation is also affecting what and how manufacturers can package frozen diets.
“Packaging for frozen food is becoming more and more complicated as FSMA and packaging regulations change,” Clevers said. “Even though most of these products are frozen live animals, more and more regulation on what can be fed to any pet is causing us some gas pains we have to work through. In most cases, this creates more cost without any real benefit to the consumer or retailer.”
The trend toward offering healthful diets has permeated the entire hobby, and many manufacturers offer a wide variety of options to ensure retailers and their customers can switch things up as needed.
“It’s really progressed,” said Dr. Timothy Hovanec, owner and president of Dr. Tim’s Aquatics in Moorpark, Calif. “People really do understand that they have to give a varied diet, especially on the reef side. Not all fish eat the exact same things or can survive on the exact same things.”
The manufacturer doesn’t produce a frozen diet, but its line includes a diet that fish keepers prepare beforehand and freeze to use later. Dr. Tim’s will have some new items and prebiotics coming out in late summer, Hovanec said.
He noted, in general, that feeding frozen foods gives hobbyists a lot more control over what they’re offering—and keeping high-end hobbyists happy is good for business.
“You can really tailor the food to your fish and the condition that they’re in and the condition you want them in,” Hovanec said. “That’s what people like. It gives them more control over what they can feed their fish.”
Leveraging the Specialty Advantage
Frozen aquarium foods are unique in that they are difficult to ship and don’t often appear in big-box stores or non-aquatic-specialty pet stores, giving pet specialty retailers the advantage in the category.
For this reason, Anthony Johnson, owner of Reef Life Aquatic in Palatka, Fla., encourages customers to move toward a frozen food diet.
“Part of the reason for that is the price per unit,” he said. “If you’re feeding mysis shrimp cubes every single time you feed, you’re going to cruise through a flat pack real quick. At $6 to $7 a pack—or with PE Mysis, at $10 to $11 a pack—it gets pricey.”
Johnson carries Rod’s Reef Foods, Hikari frozen foods, Ocean Nutrition, San Francisco Bay Brand and Piscine Energetics PE Mysis. Still, he believes there’s untapped potential for more sales.
“If there was a way to trim down the price of the foods, maybe I could move more product,” he said. “[Manufacturers] would still make the same amount of money, just in volume sales.”
Some customers are more sensitive to pricing, and, as such, retailers maintain competitive prices.
“Customers are always very conscientious of the price they pay, so my prices are very competitive, especially in this hobby,” said Stephen Myers, owner of Reef Plus in North Aurora, Ill. “My margin is reasonable. There are a lot of electrical and storage costs that go with [selling frozen foods].”
Hikari sells very well, Myers noted, and his customers also like to use Rod’s Original.
There’s a perception of a premium gradient within the frozen food category, and retailers choose to offer a variety so that they can capture those who are price sensitive, as well as those who are willing to spend more.
“Your high-end reef customer is certainly the guy who’s looking for the best product available,” said Howard “Howie” Berkowitz, owner of Aquaridise in East Brunswick, N.J.
Hikari is Berkowitz’s best-selling frozen food line across the board. He also offers Ocean Nutrition products and Larry’s Reef Frenzy.
Ultimately, frozen foods move well in-store.
“PE Mysis is what sells the most,” said Kevork Tarakjian, owner of Blue Planet Aquarium in Fresno, Calif. “If someone likes something, they’ll pay. It’s not hard for me to move stuff. I don’t really mark up my stuff that much. I try to sell at MSRP or whatever online prices are. When you do that, you’re not dusting anything off.”
A Freezer Full of Options
Options are limited when it comes to offering and displaying frozen foods, as in-store freezers are required. Pet specialty retailers often opt for either a stand-up, glass-door freezer unit—sometimes featuring manufacturer branding—but cheaper options, such as point-of-purchase mini freezers and simple freezer units with no glass, are also popular.
“A full, up-right freezer with a glass door runs about $3,000 to $4,000,” said Anthony Johnson, owner of Reef Life Aquatic in Palatka, Fla. “I wish I had a little branded freezer, but I have a refrigerator freezer that I bought from Sears.”
At some of the larger trade shows, such as the Marine Aquarium Conference of North America (MACNA) or Global Pet Expo, manufacturers will sometimes offer promotions involving freezers, but it’s usually up to the retailer to find these deals.
“I’ve thought about that, but the price of stocking an entire freezer full of their food is still $4,000,” Johnson said. “But at least it’s moveable product.”
It might also be possible to find used freezers for sale.
“I have a glass-door freezer that I bought a year ago,” said Howard “Howie” Berkowitz, owner of Aquaridise in East Brunswick, N.J. “I’ve been around a long time. Hikari had provided me with a small desktop-type glass-door freezer 15 years ago. When that freezer started to go, I went out and purchased a stand-up glass-door freezer from a store that went out of business.”
Though freezers are costly both in terms of upfront outlay and upkeep over time, ultimately, they pay dividends.
“Per square foot, it’s profitable,” said Kevork Tarakjian, owner of Blue Planet Aquarium in Fresno, Calif. “It takes up a small area, and with it packed in that small space, you’re going to make money.”