It may appear that 2024 was a tumultuous year for the seafood restaurant industry given the entrance and subsequent exit from bankruptcy of one of its largest companies, Red Lobster.
But Andy Diamond, president of Angry Crab Shack, a leading seafood restaurant franchise with 23 locations in the U.S. and one in the UK, says Red Lobster’s financial rollercoaster ride is not indicative of the state of the overall seafood industry.
Bar & Restaurant News spoke with Diamond about Red Lobster’s situation, the real state of the seafood industry, what’s trending in seafood, and more.
Red Lobster is a Red Herring
According to Diamond, Red Lobster’s woes this year are not a reflection of the health of the seafood industry, but rather a reflection of business decisions made by Red Lobster's new investment banking owners. “You started seeing decisions being made not based on a restaurant, but an investment banking firm,” he says.
In fact, according to the 2023 Seafood Consumer Trend Report, 45% of consumers eat seafood at least once a week and 37% of consumers anticipated they'll eat seafood more in 2024.
Diamond attributes this increase to a greater interest in health and wellness as seafood is a healthier protein option. He also believes the pandemic played a role as more people were cooking at home and began experimenting with seafood, which led to a greater familiarity with the food group.
When it comes to Red Lobster, Diamond also cited the chain’s failure to evolve its brand and menu to cater to changing consumer preferences—especially younger customers—as reasons for its stumbles. “If you don't change, if you don't navigate and try to get younger generations, you're just going to be left with a lot of your older customers, and those people are going to spend money less and less,” he says.
Younger Customers
Attracting new—and especially younger—guests is where Angry Crab shines. The restaurant focuses on creating a visually appealing, interactive, and socially conscious brand to successfully attract and retain a younger customer base.
Social Media: Angry Crab Shack has successfully leveraged social media platforms like TikTok to create visually exciting and entertaining videos that showcase the interactive dining experience. This appeals to the visual preferences of younger generations.
Interactive Dining Experience: The restaurant's lively environment, where customers can eat with their hands, crack open seafood, and dip it into sauces, provides a fun and engaging experience that younger consumers find appealing, especially in a post-COVID era when people are craving social interaction.
User-Generated Content: Angry Crab Shack's customers often take photos and videos of their meals, which they then share on social media. This user-generated content helps to further promote the brand and its unique dining experience to younger audiences.
“That really helps us sell our brand because they're posting it, their friends are seeing it, and it's free advertising,” says Diamond. “Word of mouth is huge.”
Educational Content: Angry Crab Shack also uses social media to create educational videos on how to properly enjoy and eat different types of seafood, which helps to engage and inform younger customers, who may be less familiar with certain seafood items.
Brand Personality and Values: The restaurant also showcases its charitable endeavors and community involvement through social media with partners like Phoenix Children’s Hospital, Arizona Housing Coalition, and more. This allows younger customers to connect with the brand's personality and values.
“I think a lot of people want to know what kind of company you are and where they're deciding to spend their dollars,” says Diamond.
Fishing for Trends
Once Angry Crab Shack attracts new customers, they retain them by paying attention to what the market wants. Diamond says he’s recently observed a few trends in the seafood restaurant industry.
Sustainability: There is an increased focus on the origin and sustainability of seafood, with consumers showing more interest in knowing whether their seafood is farm-raised or wild-caught, and whether people are overfishing certain species.
Fusion: There is a trend towards more fusion cuisine in the seafood sector, such as sushi burritos, seafood tacos, and seafood charcuterie, appealing to adventurous and younger consumers.
Spice: The use of unique spices and sauces is growing in popularity, allowing restaurants like Angry Crab Shack to offer customizable and flavorful seafood options.
“Angry Crab Shack is the type of restaurant where you can customize your menu. You pick your protein, you sauce it, and you spice it exactly how you want it,” says Diamond. “So we can create new sauces and new flavors for the younger generation that wants to experiment while keeping the same product that we've had for our loyal guests.”
Pricing
A large part of customer retention in today’s market is also related to perceived value and price, which can be difficult in the seafood market where the offerings can be expensive.
To make seafood more affordable and accessible, Angry Crab Shack is adapting its menu and pricing in a number of ways:
- Menu items priced at $18 or less to provide more affordable seafood options.
- Customizable "mixed bag" options where customers can create their own combination of seafood items, allowing them to control the cost.
- Lunch menu with seafood items priced between $8-$18, providing lower-cost options for those looking to enjoy seafood during the day.
- A variety of farm-raised seafood options, which tend to be less volatile in pricing compared to wild-caught seafood.
- Customizable orders where customers can get only the sides and sauces they want, rather than forcing them to pay for items they don't want.
Seafood restaurants also offer owners a cost savings thanks to their operational differences and efficiencies when compared to other restaurant types.
For one, seafood restaurants often have a smaller kitchen footprint as seafood generally requires less complex cooking methods. This also leads to lower equipment costs and the need for less expensive kitchen equipment like fryers and stock pots compared to large ovens and grills. Seafood also cooks faster, allowing food to get out faster and tables to turn over quicker.
On the labor side of things, thanks to those less complex cooking methods, seafood restaurants can hire less skilled kitchen staff. This is especially a boon in today’s industry where back-of-the-house staff and cooks are becoming harder to come by.
“There are a lot of advantages to it, you know, not just from a cost perspective, but from a consistency perspective as well,” says Diamond.
The Future
As for the future of the seafood industry, Diamond anticipates continued demand for farm-raised or aquaculture-produced seafood as well as the possibility of plant-based seafood alternatives.
On the spice side, he sees the incorporation of international flavors becoming big, such as Korean gochujang.
Angry Crab Shack is also looking to further its expansion into the UK market in the coming year.
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