Aviko opens up potato flake plant in PRC, rolls out retail ready meals in Holland.

With Martin van de Ven having assumed the helm at Aviko BV in April, Quick Frozen Foods International recently paid a visit to the Dutch company's headquarters in Steenderen to meet the new chief executive officer. The food industry veteran, who since 1985 has held executive posts with SVZ, a unit of the frozen potato product producer's parent company Royal Cosun, was upbeat about the future.

Noting that 2007 was a "satisfying year" for Aviko, he expressed optimism that a repeat performance is in the cards for 2008.

"We have full confidence that our potato solution products will continue to be well received in the European market and elsewhere," he commented. "In terms of brand awareness, we are coming on strong in the Baltics, Russia and much farther afield."

Aviko has been on the scene now for some time in Central and Eastern Europe, as well as in the Russian Federation. In fact, it has been producing french fries at a joint venture plant in Poland since 1994.

"When the wall came down, we were one of the first frozen food companies from Western Europe to go in, initially doing business with state-owned freezer centers," recalled Dick van der Aart, marketing manager. "Being first has big advantages."

Another country where the company has great expectations, and in which it has broken new ground, is China. A state-of-the-art factory for production of potato flakes went on line in Gansu province during mid-March. "We are now harvesting the first crop for processing," said Mr. Van de Ven.

When asked if the manufacture of dried potato products is the first step in setting up a frozen french fry and specialty product plant in China, the ceo replied: "It could be, but we will have to wait and see how things develop in the growing market. One thing we certainly know is that the quick service restaurant segment in China continues to expand, and that 70% to 80% of the fries consumed in the country are sold by QSRs."

Mr. Van der Aart pointed out that the company expects to export more finished products to the PRC through its existing distribution network, as well as via the well established contacts of Eurofreez, a recently acquired potato and cheese products maker based in Belgium.

"Eurofreez has a good structure in place in Asia, and we are using it to distribute everything from fries and speciality potato products such as gratin portions, to cheese croquettes," said the marketing manager. "It is an excellent acquisition, with a product line that is very complimentary to that which Aviko offers."

Meanwhile. on the Netherlands retail scene, a number of potato-based ready meals have been introduced. The new line features a potato and pork dish, as well as separate SKUs featuring salmon and grilled vegetables. They are selling for approximately EUR 2.99.

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"All three have been listed by much of the Dutch trade already," said Mr. Van der Aart. "Within several weeks of introduction, market penetration was 70%."

What is next in the new products parade coming from the R&D innovators in Steenderen's test kitchen?

"There are plans to bring out another healthy-eating item," the marketing manager told QFFI. "It might be a Flemish fry, or a Steakhouse variety with 33% less fat and 100% full flavor."

What are the prospects for availability of ample processing raw material from farmers in Holland this season?

"Supplies should be adequate, even though the planting of potatoes has been slightly below last year's level. At the moment, it is impossible to know how much the harvest will yield," said Mr. Van de Ven.

One thing that is predictable, however, is that the price paid for spuds will likely increase.

"For sure wheat, rice and other agricultural products have become more expensive around the world," stated the chief executive officer. "So it could well be that the price farmers ask for potatoes will rise as well."

Like other frozen potato companies in Europe and around the world, Aviko is paying more for cooking oil, packaging materials, petrol, electricity, labor and insurance--which cumulatively are mounting upward pressure on the cost of production. Everything possible is being done to hold the price line for customers, but it is inevitable that end-users in the foodservice segment will have to pay more for potato products in the future. As such the focus on value-added products, which provide higher margins for restaurant operators, will be further sharpened.

Mashed potatoes, for example, are well positioned for public school catering programs, where menu makers are increasingly demanding non-fried food options. Another item, ideal for high volume, fast turn feeders such as vendors at football fields or in concert halls, is the Turbofry. It is ready to serve after just 90 seconds of preparation.

Eye on USA Market

In the non-potato area, Aviko is keen on finding additional markets for its Polish-style pierogies, which just happen to be produced in Poland. So it made good sense to promote the line of cabbage and potato, strawberry and blueberry-filled dumplings in the city with the biggest population of people of Polish heritage residing in the United States--Chicago. During the recent National Restaurant Association show in the Windy City, pierogies proved to be a flavorful hit at the active Aviko stand.