Lobster. It is pricey, sweet, and a favorite among patrons at four and five star restaurants. Before you order that lobster, you need to learn a few things about it. It is common for restaurants to quote you the industry price for the day, for the lobster they sell. That price is THEIR retail price, on the industry retail price, or wholesale price.
A female lobster lays anywhere between several thousand and 100,000 eggs at a time, but only 1/10 of 1% of these eggs develop and live past 6 weeks. A lobster may live 100 years, grow to 5 feet, and weigh as much as 45 pounds
The average weight of a normal standard lobster is about 1.25 pounds. Of that, about 3 to 6 ounces will comprise the tail. When ordering lobster tails at a restaurant, you will normally get a 4 to 6 inch tail. If the tails are smaller, you will get two. Larger tails generally have tougher meat, so the smaller tails are more popular.
Restaurants buy the lobsters at wholesale. Depending on the volume they buy, they will pay about $7.00 to $12.00 per pound. This means they pay about $8.75 to $18.00 for the entire lobster. They make their money back selling the tails in dinners, priced at $25.00 to $39.99 a plate.
If the restaurant has their own lobster boats, the cost for those lobsters is much lower, and can be as little as a couple dollars per lobster. In spite of that huge price advantage, they may not pass along the savings to the restaurant patrons.
Now, left over from the lobster is the balance of the lobster meat, including the claws, which is used for salads, soups, and sauces. Salads, served as main dishes with lobster meat, can cost as much as an entree with a tail, when really it is just the scrap meat from the lobster, reclaimed and sold.
The total profit from any one lobster, when it is purchased in large quantities can be as much as $100 or more per lobster, which is paramount to gouging. The only way you can prevent that gouging, is to buy a whole lobster, so that the $40 meal entitles you to the entire lobster.
This is only the story for WHOLE wholesale lobsters. Another sector of the industry is the wholesale claw alone and cull lobsters. During processing, claws can become detached from the lobster, rendering the lobster a cull lobster. When that happens the claw is sold separately, at a heavily discounted price, as is the cull lobster.
That changes the pricing considerably for restaurants that buy up those seconds quality lobsters and claws. When you order the $35 lobster tail in a restaurant, you have no idea if it was a cull lobster or not. This is where real gauging can come into play. The cost of that tail may have only been a few bucks, but it is served to you as if they paid top dollar for it.
The gouging can actually begin at the wholesale level, where lobster tails from cull lobsters that couldn't be sold as wholesale lobsters, can be sold to the public, retailers, or restaurants at prime retail prices.
Lobster prices are really far beyond what they should be, when you look at actual volume wholesale, and bulk wholesale prices. They are fueled by the incorrect public belief that lobster harvesters are paid premium prices, and there is a lobster shortage, due to regulation. This is pure fiction, red herring, created to justify excessive end user pricing.
The average lobster will catch about 400 pounds of lobster a day, which comes out to about 320 lobsters average. 20 million pounds of lobster are harvested annually in the U.S, which comes out to about 16 million lobsters on average. The traps are harvested after about 3 days. Included in the price they are paid, they have to box, pack, and ship their lobsters to the wholesaler. Lobstermen get about $2.75 to $3.25 per pound of lobster, or about 1/10 of the price of your lobster tail dinner.
The markup at wholesale is three to four times their cost. The total markup at the restaurant level, considering using all the lobster meat, not just the tail, is another six to twenty times their cost. This, potentially, far exceeds the markup on other menu items, by a long shot, especially when the meal is sold as entree only, without vegetables, soup, or salad.
Consider this information, before you decide to order lobster from a restaurant. Shop around, compare prices, then have your lobster dinner.
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Lobster - Why Is It So Expensive?
October 23, 2009
It normally takes 5-7 years for a lobster to reach legal size. If a lobster does not fall within the minimum or maximum gauge size, it must be returned to the sea. Lobsters are measured for legal size.
In the US, the minimum legal size lobster must measure at least 3¼” from the eye socket to the back of the carapace where the tail joins the body.
Any lobster with a greater than 5” carapace must be returned to the sea. This law exists in the U.S. to protect the breeders.
