shutterstock_647549395

Coral and aquatic livestock sales are an essential part of the business for stores catering to reef aquarium hobbyists, and retailers report that they are doing their best to stay stocked on both despite limited product availability and rising prices.

Independent aquatics retailers often have an advantage when it comes to corals.

“Livestock is a foundational aspect of our business model,” said Donna Harris, co-owner of Blue Reef Aquatics, a retailer in North Las Vegas. “Corals are high margin. If we didn’t have livestock in the store, there wouldn’t be nearly as many people coming in to buy other products. We still have to fight against Amazon and Walmart and Bulk Reef Supply. Some people will just shop online. The majority of the people who come into the store want to look at the animals, whether they’re buying animals or not. Sometimes they just want to look at the animals, bring their kids in for a day at the zoo, so to speak, and pick up their fish food while they’re here. Without the animals, our business model would be a whole lot different.”

Consumer demand for coral fluctuates from time to time as demand for specific types of coral changes and consumer interest shifts to new species or novel varieties.

“Coral sales definitely seems to be growing, but with coral, it’s almost a designer thing,” said Kyle Hughey, store manager for Houston Aquarium Warehouse, a retailer in Stafford, Texas. “You have to sell what is popular. So for a while now, Euphyllia corals have been incredibly popular. While 10 years ago, everyone was really big on different types of brain coral. Every once in a while someone will come in and buy brain coral, but that’s the first brain coral we’ve sold in a couple weeks.”

Some retailers report sales success with multiple species and varieties.

“A wide variety of species and types sell best for us,” said Rhett Gehring, general manager for Aquatropics, a retailer in Gainesville, Fla. “There isn’t any one type of coral that dominates [sales]. We’re pretty evenly spread across the board when it comes to coral sales. We do quite a lot of acan corals, Blastomussa and things like that. Ricordea mushrooms and Discosoma mushrooms are always good, consistent sellers. As far as small polyp stony corals go, the bread-and-butter Montiporas are always selling. When we get some of the higher-end stick corals, they usually sell pretty well.”

Growth appears to be market dependent, as some retailers have seen declines or flat sales in coral.

“Live coral sales are flat,” said Jim Seidewand, owner of Pet World, a retailer in Rochester, N.Y. “They are flat compared with last year and the year before. They haven’t been growing, but fish sales have been increasing quite a bit over that same period.”

Many retailers reported success with frags, as larger colonies may be prohibitively expensive.

“We’re actually doing pretty good,” said Domenic Fanony, co-owner of Aquarium Paradise, a retailer in Lakewood, Wash. “One thing that’s picked up huge is frags. We used to do a lot of larger pieces. Now, we’re doing a lot more frags. Coral sales have been about the same from last year.”

Pricing Challenges

Rapid increases in prices have been a factor in changes in demand for coral, retailers reported.

“Prices are increasing significantly,” said Luke Johnson, owner of The King of Aquariums, a retailer in Lakewood, Colo. “My customers are experiencing sticker shock, and my coral sales have declined since the increase in market price of these items. That’s just solely because there is speculation certain regions of the world are going to be closing down. Wholesalers and suppliers panic buy and bring that market up. From what I’ve seen, it’s not a good idea to panic buy.”

Price increases have impacted many popular coral species, including those that have traditionally been easier to find and less expensive.

“Just like everything, corals have been going up in price,” Hughey said. “That’s just part of life right now. But we’ve also had a lot of success when it comes to Goniopora corals and flower pot corals and that kind of stuff.”

These price increases are not uniform, however, and some types of coral have become less expensive as demand has declined.

“Some things have gone up significantly in price, and some things are surprisingly cheaper than they used to be, in terms of the corals themselves,” Gehring said. “There are certain things that have become less desirable, and they fetch a lower price as a result. Across the board, they’re probably easier to grow in an aquaculture facility. Those end up being the lower price items. Obviously, some are much harder to aquaculture, or they are harder to keep with the desired coloration. Those types of corals are priced a little higher than they used to be. Prices really haven’t gone up as much because of availability issues or shipping issues. Price increases are very dependent on the coral species itself.”

Where retailers source live coral has also impacted prices, as those who rely on shipments from overseas report price increases and increased wait times to receive coral.

“During the first six months of the pandemic, there was almost no freight capacity available,” Seidewand said. “So if you’re paying three or four times the freight to ship coral into the U.S., of course that impacts the price dramatically. It’s been a problem both in livestock and in dry goods.”

Suppliers have raised prices for many corals that were collected from the wild or maricultured, retailers reported.

“We’ve had to raise a few prices mainly because shipping,” Fanony said. “Shipping rates have gone up. Prices have also gone up from our suppliers. So it’s been a bit of a double whammy.”

The combination of rising prices and slower demand has leveled off coral and aquatic sales that spiked during the pandemic.

“Our coral business is not as busy as it was six months ago,” Harris said. “Things are quite a bit more expensive. I’m not saying that it’s terrible. It’s definitely not what it was when the government was throwing money around like crazy. We’re no slower than we were before the pandemic.”

Meanwhile, shipping issues and legislative challenges have impacted coral livestock supply all around the world. Shipping coral from overseas is one of the main culprits affecting availability.

“There are a couple of things going on,” Harris said. “No. 1, we have restrictions [on coral trade] in the Indonesia area, such as from Tonga, where a lot of our coral were being maricultured from. They’ve put a lot of restrictions on corals coming out of that area. No. 2, we used to have international flights from pretty much every country in the world on a daily basis, and that is not happening right now. So the corals and the fish used to jump onboard, to fill an extra spot. Now, the flights aren’t coming every day, flights aren’t full and the freight costs have gone up a lot. We’re just not getting the imports, just because the planes aren’t coming in.”

Corals from parts of the world that were traditionally less expensive, such as Indonesian corals, are increasingly reaching parity with those from other more expensive regions.

“There’s a lot of speculation that Jakarta is going to close down here really soon,” Johnson said. “So those in the coral industry, distributors and wholesalers, are starting to panic buy corals, which is causing the Indonesian corals to become comparably priced to Australian corals.”

Getting Customers in the Door

Despite the challenges in the segment, good-looking, healthy corals help sell themselves, retailers reported, and leveraging social media may help drive sales.

“We’ve always had a Facebook and Instagram page, and it’s been pretty hit or miss as far as our consistency, honestly,” Gehring said. “For the past two to three months, when I do get stuff that’s really eye catching, I’ve been posting pictures of it.”

When retailers have the resources to do so, alerting customers to new livestock via social media can help bring customers in.

“Some of the younger employees working for me, they’re in their twenties, and with their help we started beefing up our Facebook and Instagram,” Fanony said. “That does well for us.”

Edging out the competition is another challenge retailers face. Sales of coral online, often from colonies produced by at-home breeders, are typically seen as the main source of competition in the segment.

“I wouldn’t say that our main competitors are other independent stores,” Hughey said. “It’s more of the local, independent hobbyists who are selling to other people through Facebook Marketplace or through Instagram. And I actually do purchase coral from them as well and bring it into my store, but that’s been my main competition.”

Leveraging variety may be one way retailers can get a leg up on at-home coral operations, retailers reported.

“A lot of the stores in my area are all saltwater, and a lot of them end up competing against one another,” Johnson said. “At that point, it’s just a matter of price and convenience. The quality of product you get and the variety of product you get depends on who you know personally in the industry. Interpersonal relationships are essential. A lot of it is just doing research and listening to word-of-mouth. That way, you find people off the grid who you’ll never find on Google. Then, you form a relationship with them, you build those connections, and you end up with a variety that other stores do not have.”

Legislation to Watch

The Pet Advocacy Network, mostly recently known as the Pet Industry Joint Advisory Council (PIJAC), is keeping its eye on amendments to the Lacey Act that are included in the America Creating Opportunities for Manufacturing Pre-Eminence in Technology and Economic Strength (COMPETES) Act of 2022, which is legislation that passed the House of Representatives and that, as of press time, is pending in the Senate. The Lacey Act is a law that bans trafficking in illegal wildlife, plants and plant products.

A letter posted on the organization’s website signed by various industry leaders, including Pet Advocacy Network president Mike Bober, explained that the amendments would “authorize the U.S. Fish and Wildlife Service to prevent interstate transport of species listed as injurious; create a white list of import-approved species and importation of any animal not listed would [be] banned by default; and enable the Secretary of the Interior to use an ‘emergency declaration’ to prohibit importation of a species suspected to be injurious to humans, agriculture, horticulture, forestry, wildlife, or wildlife resources for up to three years with no public or Congressional input.”

The letter also stated that the legislation could “trigger a domino effect across the live animal economy, devastating not only those businesses and farms that sell those species, but also manufacturers, distributors and retailers who produce and sell products to grow or care for them.”

For more information, visit petadvocacy.org.