Why the lobster has gone mainstream

The crustacean is no longer a luxury item. Now, due to falling prices and soaring supply, it's showing up in the unlikeliest of places.

By MSN Money Partner Mar 19, 2014 12:51PM
By Sarah Nassauer, The Wall Street Journal

Lobster, long considered a luxury, is becoming a little more ordinary.

Soaring supply and falling prices for whole live lobster, along with new food trends, are changing how people eat the crustacean -- perhaps for the long term.

Sandwich shop Quiznos, like other inexpensive chains, is adding more lobster dishes alongside its subs. Golden Corral, the buffet-style restaurants, has put lobster on the menu for the first time. Grocery stores from Whole Foods (WFM) to Wal-Mart (WMT) are stocking new lobster items such as frozen tails and cooked claws.

The most expensive restaurants are going beyond classic whole lobster or lobster tail and putting the crustacean in dishes such as pasta, soups and even chips.

It is rare dynamic in today's food world: Supply of lobster is plentiful and pushing down prices. This comes at a time when rising commodity costs are boosting the price of foods like beef and coffee. And much of the most popular seafood is being severely overfished. 

The supply of North Atlantic lobsters has steadily climbed for over a decade. Supply is likely growing because of a combination of factors. Warming water in recent years may be boosting lobster population. Fishermen are following regulations that protect young and egg-bearing lobsters. And there has been a decline in recent decades of natural predators such as cod, which eat baby lobsters.

Lobster fishermen groups in the U.S. and Canada, the main areas where lobster is caught for the American market, say retail prices have fallen. In the past two years, the average price that Maine fishermen are paid for whole live lobster has been under $3 per pound, down from a high of $4.63 in 2005, according to the Maine Department of Marine Resources.

Lobster prices can vary widely across the country. Many restaurants buy in bulk to lock in a good price.Whole red lobster on a wooden plank
© Emilie Duchesne/Getty Images

"When you increase supply by 80 percent in five years," it is hard for prices to keep up when consumer spending is weak, says Patrice McCarron, executive director of the Maine Lobstermen's Association, which represent the state's fishermen.

There are signs lobster prices are beginning to inch up. In 2013, prices paid to Maine fishermen rose slightly to an average of $2.89 per pound from $2.69 per pound in 2012. The amount of lobsters caught started to level off.

Inexpensive chain restaurants have jumped at the chance to add lobster's premium image to their menus.

Golden Corral bought 200,000 pounds of frozen lobster tails last August. It paid $3.79 per tail, or about $13 a pound -- an approximately 20-year low for the restaurant, says Bob McDevitt, senior vice president of franchising for the 500-location Raleigh, N.C. chain. (By the time a restaurant buys lobster, its price has gone up as the supply chain can include wharf fees, a cut for dealers or wholesalers and processing-plant costs.)

Golden Corral is now thawing the tails for a limited-time special, a common practice with tails served at inexpensive restaurants. (The tails have a 12-month frozen shelf life, McDevitt says.) The special is timed to lure diners after a cold winter that kept them eating at home, he says. At $3.99 a tail, the company isn't making a profit on the special, but it is likely to boost sales of buffet dinners, he says.

Among national chains, lobster appeared on 35 percent more menus in 2013 compared with 2009, according to Datassential, a menu research and consultancy company based in Chicago.

At many high-end restaurants, classic whole lobster and tail dishes are seen as passé and therefore offered less "despite the price drop," says Maeve Webster, senior director at Datassential. Instead, lobster rolls, lobster salad and lobster bisque are growing in popularity.

When off-the-boat prices for lobster were plummeting about two years ago, Gramercy Tavern in New York switched to a lobster supplier who buys directly from Maine fishermen, reducing the restaurant's cost per pound by about $3, says Howard Kalachnikoff, executive sous chef at the one-Michelin-star restaurant. Gramercy Tavern is buying lobster for $8.25 a pound, or comparable with the best cuts of beef, allowing chefs "a little bit more experimentation," he says.

Lobster is on the menu in a pappardelle, chorizo and mussels dish; in a salad with winter squash; as a base for sauce on a flounder, a wild rice dish; and incorporated into an airy chip served with lime aioli.

The priciest restaurants "do not lower [menu prices] when lobster gets cheaper," says Jordan Elkin, president and founder of Homarus, which buys live lobster directly from Maine fishermen and sells to about 300 high-end restaurants in New York, including Gramercy Tavern. Those restaurants know diners will pay a premium for lobster, Elkin says.

At L2O in Chicago, a seafood restaurant where the lowest-priced dinner is a prix fixe meal for $140 per person, lobster is now more often paired with pricey ingredients, says Matthew Kirkley, the restaurant's chef.

"I'm serving sweetbread and truffles with lobster," because of his current $8 a pound wholesale price (which doesn't include overnight shipping by FedEx (FDX), says Kirkley. Usually pairing "$600-a-pound black truffles" with pricey lobster in one dish would be cost prohibitive, he says.

The lobster eaten most often in the U.S. is Homarus americanus, the only species with two large claws that is caught along the north Atlantic coast in Canada and the U.S.

Because of differences in weather, fishing seasons and fishing regulations, most hard-shell (and therefore easily shipped) live lobster is procured in Canada, while most soft-shell lobster (sold live in New England, but difficult to ship longer distances) is caught in the U.S. (A lobster has a hard shell before it molts and then grows a new soft shell.)

A large amount of soft-shell lobster caught in New England is sent to processing plants in Canada, destined to become frozen tails or precooked knuckle and claw meat.

In summer, when fishing is easiest, New England is flooded with inexpensive live soft shell lobster that doesn't make it to other parts of the country.

Canada's lobster industry has faced supply levels that are "up about 50 percent in the last 10 years," driving down prices, says Geoff Irvine, executive director of the Lobster Council of Canada, which represents buyers, shippers, processors and fishermen.

Whole Foods Market paid less for its frozen lobster tails last year, then dropped its price to shoppers, says a spokeswoman for the store, who declined to give specific pricing details.

Wal-Mart in the past 12 months added three new lobster products, including a frozen lobster tail and cooked whole lobster, says a spokeswoman for Wal-Mart Stores Inc.

While it is unlikely to challenge home cooks' love of chicken as a quick, cheap, easy dinner, the lobster industry is trying by investing in new high-pressure machines to burst raw lobster meat from its shell into an easy-to-cook form.

More from The Wall Street Journal

Mar 19, 2014 4:16PM
When you go to Maine, you get three steamed lobsters, steamer clams, corn on the cob and a trip to the salad bar for around $20.   That's if you know where to go.  Maine has the best seafood!   Yumm!
Mar 19, 2014 4:57PM
love lobster but still not affordable in Henderson, nv.
Mar 19, 2014 6:02PM
Mar 19, 2014 5:40PM
Most lobsters sold are spiny lobsters. They come from warm waters of Australia, USA, South America and coral reefs of this world. The east coast lobsters have pinchers and live in cold water. The Australians regulate their lobster fisheries very well and are a world supplier.
Mar 19, 2014 4:24PM

This is clearly Obama's, Kerry's, Hillary's, and Gores fault....


Who'd I miss?

Mar 19, 2014 6:27PM
The best, and I mean the best, seafood comes from the New England area!
Mar 19, 2014 6:01PM
    The ones we get here are about the size of a good sized crayfish, and cost a fortune.
Mar 19, 2014 6:22PM
There is nothing like an Atlantic cold water Lobster. They are 100% organic for all you life is good yuppies and in addition, very sweet tasting without any spiny flavor. I could not imagine trying to eat an over sized crawdad from another country. 
Apr 11, 2014 3:52PM

I'll take a south African Rock lobster tail and a charbroiled rib eye steak any day

Mar 31, 2014 10:48AM
BULLI live in Oregon and went to a Seafood Market and they said that with Shipping costing so much there is NO way I can get Maine Lobster unless I go there. And the only other Lobster is the Rock Lobster here and it has very little flavor and is 20 $ lb. and are very small it takes me 4-5 to really get full 6-8 I'm good and 40 $.
Mar 19, 2014 5:21PM

I consider myself a Lobster Snob. I only eat cold water Western Australian or South African tails.  You Ham & Eggers can enjoy all the Maine lobster you want....  I think it's garbage.

Give me two twin 1.5 pound Western Australian or South African Tails and I'm good!!  Once you have them...you will never go back.

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