When someone mentions lobster, this is what probably comes to your mind (as is the case for Greg Elwell of the Oklahoma Gazette): “Lobster is fancy. If you imagine a lobster talking, it probably has a British accent. Draw an animated lobster and I bet you’ll include a top hat, a monocle, and an opera cape.” This is a fantastic description. However, this may no longer be the case. The supply of lobster in the United States has shot way up. And you know what that means: falling prices (thanks, Econ 101). In fact, the supply of lobster has increased 80% over the past five years. With such a large increase in supply, it is quite obvious that prices would have to fall. Fishermen in Maine have received less than $3 per pound of lobster sold on average over the past two years compared to a high of $4.63 per pound in 2005.
With falling prices, many restaurants, including fast food chains, are finding it easier to find a place in their budget for some (or additional) lobster items on the menu. This list includes Quiznos and Golden Corral, which added lobster to its menu this year for the first time ever. That being said, would you really want to eat lobster from a fast food sandwich shop or a buffet style restaurant like Golden Corral? Let’s think about the history of the lobster and how it became such a delicacy.
Basically, lobster started out as a food served only to servants and prison inmates because it was so plentiful and cheap. The most common place it came from was Maine, on the coast. In general, people farther inland in the U.S. had never heard of lobster. Eventually, lobster was served to passengers on inland trains (still because it was cheap), but the passengers didn’t know what it was so they thought it was a rare, exotic meal. They began to love it and thus lobster became a very popular food. There were several more ups and downs for lobster’s status involving the Great Depression and World War II, but ever since then lobster has been beloved (and very expensive). This story, as an example, is very insightful within the realm of economics as a way to explore how preferences, and the changing of preferences, relate to prices.
Based on this history, are we in for another period of lobster being a food for the poor? It actually does not look this way. Nowadays, even when lobster prices fall, most restaurants unfortunately do not reduce their menu prices because they know very well that diners will pay top dollar for this delicious sea creature. However, rather than simply serving a whole cooked lobster or a lobster tail, many chefs have been adding lobster to the menu in other ways, such as in pasta dishes, salads, and in sauces, among other manners. This has become more common over the past few years with more affordable wholesale prices for lobster.
If you want to take advantage of these lower prices, look no further than Whole Foods and Wal-Mart. Both of these retailers have added frozen lobster tails and cooked whole lobster to their inventories, and actually have dropped their prices for consumers as their costs have gone down with the rise in supply.
It is crazy to think that lobster was ever “food for the poor” and served to servants and inmates. There is even a rumor that in Massachusetts during the 1600s, a contract was made up so that servants could not be served lobster more than 3 times a week. That sounds so incredibly backwards. Little did they know they were eating what would become a luxury food a couple hundred years later. I suppose the status of certain foods such as this can change over time, which has certainly been the case. And even now with falling prices, lobster is being offered in way more places and in way more dishes than any time in recent memory. I personally would not trust lobster from Quiznos or Golden Corral, but if you do, all the power to you. It will be interesting to see how the supply and price of lobster changes moving forward, and if restaurants will become even more creative with their utilization of lobster on menus around the country. In the end, until consumers stop purchasing lobster in restaurants at the current, expensive prices (and I don’t see this happening), restaurant owners will have no reason to lower prices, and lobster will never revert to being a “food for the poor” again.