British frozen food market slowed by recession and shock of Gulf War.

British Frozen Food Market Slowed By Recession and Shock of Gulf War

Nineteen-ninety-one will go down as a year that the British frozen food industry would rather forget. And that is putting it mildly. Even the ice cream sector, which enjoyed record sales along with record high temperatures for two straight summers, saw its parade rained on this year.

With the exception of high-growth niches such as pizza, desserts, chips and vegetable-based value added specialty items, product categories are down pretty much across the board. Some sources interviewed by Quick Frozen Foods International during its annual from-the-field survey of the United Kingdom market estimated that ready meal sales during the summer, albeit a traditionally slow period, were off by as much as 20%.

Audits of Great Britain (AGB) pegs the retail frozen food market as down by 2% in volume to 1.108 million tons. This reflects a worrysome trend, as tonnage has fallen some 5% since 1988.

The ailing fish category, which reportedly has been diving primarily due to consumer resistance to raw material price increases, is off by 12%. Tonnage has fallen below 70,000 for the important coated fish segment.

Here is how other categories have fared in volume terms: all meat and savoury (which represents 27% of the market) fell 1%; vegetables (57% market share) grew by 2%; non-ice cream confectionery (6% of the market) is off by 5%.

As for sterling value, inflation has pushed the UK retail frozen food market up 5% to 2.098 billion [pounds], according to AGB statistics. A report published by Key Note puts it slightly higher at 2.14 billion [pounds]. Meanwhile, the Frozen Food Information Service estimates that the entire universe (which includes ice cream and poultry) is as large as 3.5 billion [pounds].

AGB breaks out market shares and value changes through Aug. 4 as follows: meat products, 27.1%, +3%; vegetables, 27%, +7%; fish, 24.7%, +2%; savoury food, 11.8%, +9%; confectionery, 9.4%, +4%.

The negative one-two punch of recession and the Gulf War has been blamed for much of the downturn in volume. Manufacturers and suppliers have shrugged their shoulders in helplessness over the lingering economic malaise. The free-wheeling, optimistic atmosphere that charged much of the business community during the roaring '80s is now a fond memory.

Today's hangover is characterized by curtailments in investment, consumer spending sluggishness, and a stubbornly high unemployment rate of 8.5%. Some 3,000 workers a day are joining the redundancy ranks, and about 900 businesses a week are failing, if one is to believe Labour Party statistics.

The signs of sobering times are literally everywhere. "For Sale" and "For Let" notices are tacked on to homes and offices in abundance throughout the land, as witnessed by this writer during a 3,000 mile, two-week-long journey that crisscrossed England and Wales from Newcastle to London and Wrexham to Cromer.

The consensus among more than 30 industry executives polled was that little money will be made this year as frozen food producers struggle to hold their own. With fierce competition squeezing margins, in some sectors it is feared that a good deal of red ink will be spilled before there is a return to normalcy. And while processors and even a few retailers are taking their lumps, a number of machinery manufacturers are being especially hard-hit as orders for new equipment are put on hold by companies opting to preserve capital until things turn around.

"Business is bloody awful at the moment," stated Phil Humphries in no uncertain terms. The sales director of BCH Equipment Ltd., Rochdale, Lancastershire, added, "Contracts are just hanging. One big order was ready to go, but now it's on hold until the end of the year . . . It took the government nine months to figure out that we're in a recession, so I reckon it will take another nine months for them to figure a way out of it."

Things are all too quiet on both the frozen and chilled food fronts, assessed Andrew Hazlehurst, commercial manager of CMB Carton Systems plc, Swindon. "The number of new launches has slowed down, which has reduced the need for packaging. We're consolidating our efforts in the UK and holding on to what we've got, but his ill economic wind that's blowing is doing nobody any good. We're getting lots of inquiries as customers shop around to contain their costs. So when the recession does finally end, pent-up demand should bring many orders."

Meanwhile, reports that the recession is bottoming out appear to be bottoming out.

There are two schools of thought regarding the state of the economy. Dun & Bradstreet, the global business information company, sees the downturn as deepening and going into a second phase rather than recovering soon. A more rosy view is held by Bob Tyrell of the Henley Centre for Forecasting, who recently told the UK Provision Trade Federation:

"Towards the end of this year or early next you will see interest rates in single figures as we approach a general election. It will continue to get easier and we will witness the return of consumer and industrial confidence. Long-term prospects for the food industry are good . . . When the recession begins to lift we will find peoples' willingness and ability to spend improve. In the '90s we are set to have a buoyant food trade."

Apparently not waiting for a natural shift in the economic cycle to bring a boost in spending, Britain's No. 2 supermarket chain has moved to stimulate demand the old-fashioned way. Tesco slashed prices on some 500 own-label products by as much as 50% in early August. While the retailer insisted that the action was part of a routine summer promotion, it did not go unnoticed by City analysts that the annual sale came earlier than usual. This sparked speculation of a possible supermarket price war, which sent retail stocks lower.

At the same time, shares of Iceland Frozen Food Holdings plc were trading at a yearly high of 380 [pounds]. The 520-outlet chain, while moving beyond its freezer center origins with the addition of chilled and grocery lines, nonetheless attributed 66% of last year's 724.5 million [pounds] turnover to frozen foods. Its share of the overall British QFF market is almost 13%, which ranks it among the leading superstore multiples.

A visit to Iceland's Stanmore, Middlesex, office found a very upbeat Jill McWilliam. "We perform very well during recessionary periods, as consumers see our wide range of frozen foods as not only convenient, but also as good value for the money," said the director of public relations. "Perhaps sales are gaining because the recession is bringing some people who normally shop at Marks & Spencer and other upmarket stores to us. So many superstores have moved out of town, you know. It takes a car and petrol to get to them, and that costs money."

While some 65% of Iceland's 900 frozen product offerings are ownlabel, it also stocks major brands including Ross and Findus. McWilliam noted that poultry, fish and vegetable products are doing well, while meat volume still lags due to the after effects of last year's mad cow disease scare.

In a bid to arrest the slump in meat sales, BSE-free beef imported from Argentina is being featured with some success. But it is the innovative vegetable sausages and grills that are increasingly getting snapped up by meat-wary consumers.

"People are always looking for new products, but the bread and butter of this business remains staples such as peas, fish fingers, burgers and vanilla ice cream," commented McWilliam.

As the trend in retailing tended to get more upscale and shift away from the high street during the late-80s, Iceland maintained a strong in-town profile while also boosting its presence in suburban settings, shopping malls and retail parks. And by 1990 the acquired Bejam chain was fully integrated into the system.

Last year saw operating profits of 51.6 million [pounds] or turnover of 724.5 million [pounds], good for a pre-tax margin of 5.6%. "The economic climate changed for the worse during 1990, and by late summer our sales growth had slowed," explained Malcolm C. Walker, chairman. "A reassessment of our marketing strategy was speedily undertaken and many small but significant changes made. In particular, we took greater account of the regional variations in our marketplace and increased the emphasis on value. Sales responded strongly, with November and December making up for much of the ground lost earlier."

Iceland's plans for unit expansion will continue, as management estimates that as many as a third of the communities it now does business in could support additional stores. When new operations come on line in new markets, Jill McWilliam noted, "it is interesting to see demand created for frozen food that wasn't there before."

Birds Eye Gears Up

With ready meal sales estimated to be off 6% nationally - marking the first downturn since 1983 - stimulating new demand is a top priority for frozen food packers. And, supported by 12 million [pounds] in spending, Birds Eye has just launched a four-pronged campaign designed to do just that.

"As brand leader, we can't just wait for the market to recover when the country eventually pulls out of the recession," said David Jones, general marketing manager for meals. "So we're taking the initiative to give it a kick-start."

Leading the Walton-on-Thames-based company's drive is the new "MenuMaster for 2." Formulated to give sharing consumers more meal for the money, the range is priced at 1.99 [pounds] to 2.19 [pounds] per 13 or 14-ounce pack. The following recipes are featured: Chicken Supreme, Chicken & Mushroom Casserole, Beef Curry, Chicken Curry, Somerset Chicken in Cider, Beef in Stout with Herb Dumplings, Creamy Chicken and Broccoli Bake.

Birds Eye figures that 75% of sales will represent new business as customers are likely to use the products as substitutes for homecooked main courses. "These meal centers combine convenience with the benefit of flexibility, allowing the consumer to add the quantity and type of accompaniments desired. We are providing the hard-to-prepare part of the meal," said Jones.

Also part of the MenuMaster push - which will be backed by 4.5 million [pounds] in advertising and promotional spending for six months through February - is the authentic Indian range of "black box" meals. New to the lineup are Chicken Biryani and Lamb Pasanda with lemon rice.

At a time when the general market is softening, this sector is up by 15% year-on-year to March 1991. Ethnic fare is credited for broadening the base of the frozen meals market by attracting consumers with generally higher disposable income levels.

Packed in 11-ounce boxes and served with pilau rice, other offerings in the range are Chicken Korma and Chicken Tikka Makhanwala. For a limited time, each comes with a coupon good for a reduction of 25 pence on future purchases.

Another growth area is lasagne, which now accounts for some 44 million [pounds] or 11% of the overall frozen ready meal market. Average annual expansion since the late 1980s has been 25%. So it comes as no surprise that Birds Eye has invested 30 million [pounds] at its Grimsby factory to build a new lasagne production line.

It should be noted that the authentic Italian lasagne market accounted for only 2.3 million [pounds] in sales last year, while mainstream recipes brought in 28.8 million [pounds] (a 66% share) and the healthy segment did 12.8 million [pounds]. Focusing especially on mainstream opportunities, Birds Eye has introduced a 10% larger product packed in microwaveable plastic trays for the first time.

Some 3 million [pounds] has been budgeted to doctor-up Healthy Options, a premium-priced line that has not been immune to the recession blues. However, Matthew Shattock, senior brand manager, voiced optimism for the stalled 77 million [pounds] healthy eating category:

"When the economy recovers, so will this sector of the market. Indeed, it is set for long-term growth and will eventually start booming again."

Convinced that the idea of maintaining one's health supersedes economics and is separate from slimming, Birds Eye relaunched Healthy Options in September complete with the previously absent corporate logo on all packaging. The 15-item line was supplemented with five new recipes: Kashmiri Beef Curry, Beef Cantonese, Chicken in Red Wine, Honey-Glazed Chicken, and Lean Beef Lasagne.

All in all, the marketing gurus at Walton-on-Thames have no doubt that the 424 million [pounds] frozen meals sector is poised to resume an upward pattern again, perhaps rising to 500 million [pounds] by 1995. Today's setback is temporary, they insist, as demographics and historic factors will inevitably drive demand forward.

Until then, it is worth pointing out just how far the sector has come: Growth has been three-fold since 1983, with tonnage hitting 110,000 last year. Representing over 18% of all QFF sales today, over the past six years ready meals have accounted for 30% of frozen food sterling growth (upwards of 60% if inflation is factored out). The category's household penetration is put at 66%, with expectations that it will reach 74% by 1995.

Findus: Lean but Mean

As far as the British consumer press is concerned, the big story at Findus is the decision to shut down its coated fish factory in Grimsby - a facility that employs 900 workers. Headquarters in Croydon has had its hands full explaining how it can no longer afford to lose money in this sector. (Quick Frozen Foods International's analysis of the declining UK fish finger market is found in a special report beginning on page 74 of this issue's seafood section.)

But there is other, more favorable news to report about the innovative Nestle company. "The biggest thing since Lean Cuisine" was the way Richard Webb, general manager, described the unveiling of Lean Cuisine for Healthy Appetites. The 14-ounce, four-item line is 50% bigger in volume than the regular range. And it's bargain-priced at 1.99 [pounds] to 2.19 [pounds] compared to 1.69 [pounds] for the smaller version.

The creation of Healthy Appetites may be more a result of listening to consumer advice than a reaction to recessionary pressure. But the timing seems right in any event. For years many non-dieting Lean Cuisine devotees have complained that the portions were too skimpy to satisfy a healthy appetite. No more.

"They are formulated to feed one very hungry person," said Webb.

Complete with rice and/or vegetables, the initial offerings are: Lean Beef Madras, Chilli con Carne, Chicken Tikka Masala, and Farmhouse Chicken Casserole.

The general manager told QFFI that Lean Cuisine has remained a robust label in Great Britain despite the economy's slide: "It has a solid, brand-loyal consumer franchise. Generally speaking, business has been reasonably good, though not buoyant. Figures are not up or down, but we've handily survived attacks from Weight Watchers, Healthy Options and various private labels. And let me say that this competition has done nothing to drive the category forward."

Addressing other segments of the QFF market, Findus has come out with a range of three Yorkshire Puddings (Minced Beef & Onion, Cheese & Ham, and Chicken, Bacon & Mushroom) as well as something called Scrunchies. "The trade, overwhelmed with so many recipe dishes, has embraced these snack foods with a sigh of relief," said Webb.

While the puddings serve up traditional cooking of the Dales, Scrunchies are something altogether new. Targeting the children's market, the latter consists of chip-stick-coated nuggets with assorted fillings. Eight units of finger-food come per seven-ounce pack, which is being introduced for 99 pence. Supported by a 2.5 million [pounds] promotion budget, the four varieties are: Chicken & Sweetcorn, Ham & Cheese, Chicken & Bacon, and Fish, Cheese & Onion.

Webb noted that the product's technically-difficult enrobing process took two years to develop. "Half the size of a typical fish finger, Scrunchies should go over well with youngsters."

On the pizza front, Findus' French Bread offering continues to lead the 16.8 million [pounds] field. However, the company's Buitoni round pizza - which was rolled out with much fanfare last year - failed to get adquate distribution as retailers rejected it in favor of store brands.

What's Up at Ross

QFFI traveled to Grimsby to learn the latest marketing plans of Ross Young's, a United Biscuits company that has been streamlining its mission in a bid to regain profitability. After reducing its manufacturing base from 18 to 13 factories, it still turns out 1,900 different products under the Ross, Young's and McVitie's names.

Almost two-thirds of the unit's 564 million [pounds] turnover last year (down 3% from 1989) was realized from frozen food sales. Indeed, its share of the QFF branded market is 11.4%, with the percentage rising to 18.6 if private label volume is included.

Malcolm Little, managing director, reported that trading profits fell 21% to 30.1 million [pounds] in 1990. That resulted in a 5.3% margin compared with 6.6% the previous year.

Britain's largest processor of frozen fish and seafood products blamed high raw material costs for the poor performance. "After the price increases fed through to the marketplace a pattern of reduced sales volume emerged across almost all frozen food sectors and affected all major competitors in the market," explained Little. "As a result, retail frozen food market volumes declined 3.6% compared with 1989."

Ross has trimmed its branded product line by 13%, forfeiting some 18 million [pounds] of turnover in the process. But the sale of own label products has risen by 14%, bringing total market share up to a whopping 43.6%. Meanwhile, it has pulled out of retail store distribution.

What is getting a lot of attention these days are the pizza, dessert and vegetarian sectors. Each area has shown remarkable growth in recent years, paced by pizza which has expanded by more than 30% to reach 127 million [pounds] in value. Desserts are up by 9%, with the cheesecake category climbing 30% in sterling value. Vegetarian products, although starting from a smaller base, have advanced 45% in volume and 49% in value to 49.6 million [pounds].

The vegetable-based food segment is one that Ross Young's has high hopes for. In May it launched Linda McCartney's range of six vegetarian products based on the recipes of the wife of the former Beatle, Paul. The pop music couple, active in animal rights issues, is out to change Britain's dietary habits. "I want to fill the supermarkets with great, healthy food and close down the slaughterhouses," declared Linda.

Geoff Plaskitt, public relations manager for Ross Young's, is extremely bullish about the six-item meatless range made mainly of textured soya concentrate. "It imparts all the taste and variety of meat dishes, but with the health benefits of cooking with vegetable protein," he said. "Now there is a sharp merchandising focal point as the concept has won its own separate place in the frozen food cabinet and is no longer randomly dispersed."

Just how big is the market? AGB breaks out the vegetarian frozen food universe as follows: Ready Meals, 17.7 million [pounds]; Grillsteaks, 16 million [pounds]; Burgers, 10 million [pounds]; Pies, 5.9 million [pounds].

The initial McCartney range addresses all of the above segments with the following items available in 10-ounce to 24-ounce packs: Lasagne, Ploughman's Pasties, Ploughman's Pie, Italian-style Toppers, Beefless Burgers, Golden Nuggets.

With research suggesting that a growing number of consumers are cutting down on red meat consumption, Ross Young's is not alone among the major brands to introduce a vegetarian line. Birds Eye came out with its own rendition, called Country Club Cuisine, at about the same time. But with the well-known sound of the McCartney name, the former company may have an edge. As for export possibilities, Plaskitt smiled and winged this comment: "I wouldn't deny or confirm such plans."

Pizza Push

On the pizza front, Ross has invested a hefty 20 million [pounds] in a state-of-the-art Grimsby factory built to maintain its market leadership. While McVitie's is the company's standard-bearer brand, providing retailers with own labels is also a big part of the business.

This year McVitie's earnestly entered the 25.3 million [pounds] main meal pizza market with its San Marco range of Italian crust products. Flavors are: Cheese & Tomato, Ham & Mushroom, and Pepperoni & Italian-style sausage. In addition, a 240-gram Garlic Bread pack is offered.

Ross is spending 2 million [pounds] on a national television campaign to promote San Marco. Emphasized is the product line's crisp and light outside crust complimented with a soft and bready inside dough and baked-in mozzarella cheese. The pies are individually produced to provide a homemade appearance.

In another Ross development, Plaskitt noted that the Hungryman label has embraced new recipe dish products such as Deep Dish Lasagne. And McVitie's has relaunched a dessert range that heavily targets the main growth sectors of cheesecake, specialty gateaux and sweet baked goods. Finally, the new Ocean Classics label has added Seafood Paella and Seafood Crumble to its list.

As for trade marketing, Ross has announced that it will make a greater effort to cater to independent grocers. This sector accounted for 277 million [pounds] in QFF sales last year, or 14% of the retail market compared to 74% claimed by multiples and co-ops. Ross has begun offering a limited line of smaller packs in six and 12-unit cases to the independents.

Dalepak Leads Veg Pack

Pioneering the American-born concept of frozen meat grillsteaks in the UK 15 years ago, Dalepak Foods plc has more recently set its sights on the budding vegetable-based grills and burgers segment. The Northallerton, North Yorkshire-based company claims 54% of the 32.8 million [pounds] market, plus 70% of private label's 23% share. And despite Birds Eye's recent entry into the fore, Dalepak intends to stay on top.

"We expect that our share could drop to 35%. However, sales will be much greater as the overall market expands," said John Kerwin, group sales director. "Birds Eye's 4 million [pounds] advertising campaign will likely benefit the whole category."

Bucking the national trend toward generally declining frozen food volumes in 1990, Dalepak managed to increase turnover by 21% to 40.66 million [pounds] from 33.71 million [pounds]. Pre-tax profit for the year ending this April 30 was up 57% from 1.92 million [pounds] to 3.02 million [pounds].

While the lion's share (39%) of business is still derived from beef, lamb, ham and turkeysteak products - the company enjoys brand leadership with almost one-third of the 68 million [pounds] market - a lot of emphasis is being placed on the vegetable side, which presently accounts for 20% of volume. Products include the following: Cauliflower Cheese Grills, Quorn & Vegetable Crispbakes (a blend of myco-protein pieces and crunchy vegetables wrapped in light crumb), Macaroni Cheese Grills, Vegetable Burgers, Golden Crunchies (a mixture of rice, carrots, onions and green beans enrobed in light crumb), and Vegetable Waffles.

The above examples notwithstanding, Kerwin prefers not to classify the range as vegetarian. "We're targeting the general consumer, not just the nation's four or five million vegetarians," he said. "After all, 43% of the population is reducing intake of red meat."

According to the group sales director, Dalepak vegetable grills and burgers now have a higher rate of sales than meat grillsteaks and burgers combined. Worth just 2.5 million [pounds] with 1.9% home penetration four years ago, he estimated the segment will zoom to 63 million [pounds] and achieve 9% household penetration by 1996.

At the moment, the top selling vegetable-based item in the line is the Cauliflower Cheese Grill. Appealing especially to families, four units come per 14-ounce box which retails for about 1.59 million [pounds].

Currently the Dalepak range is available only in the United Kingdom and Ireland. The packer's near-term strategy calls for greater efforts in the domestic catering market before fanning out to EEC countries. Particularly keen on prospects in the Benelux and Germany, Kerwin noted that discussions have already been held with Bo*Frost, a leading German frozen food home delivery specialist.

On to Hazlewood

QFFI traveled to Wrexham to look into the activities and 10 million [pounds] upgrading at Hazlewood Frozen Foods. That is where the most modern of the co-packing specialist's factories turns out ready meals. Boasting more than 300 recipes in production, plants in North Wales (Olaf Foods and Rowan Foods) and in nearby Flint (Forest Foods) and Warrington (Food Enterprises) supply 10% of the frozen meal market in Britain.

Also on the Wrexham site are separate affiliated factories run by Pann Krisp Ltd., which makes filled pancake rolls, and Clear Lyne Ltd., a battered and breaded fish manufacturer. They pack lines for blue chip clients ranging from Ross to Iceland, with Clear Lyne also responsible for making the company's Surfer Fish Burger.

Hazlewood's premier brand of its own is Mr Chang's, which is produced by Chic-O-Roll Ltd. in St. Albans. The assortment of Chinese recipe dishes, which was recently relaunched in newly designed retail packs, includes everything from Seafood Cantonese and Pork in Black Bean Sauce to Hot and Sour Prawns and Chicken Curry.

Frozen foods accounted for 46% of parent Hazlewood Foods' 541.3 million [pounds] in turnover last year (against 577 million [pounds] in 1989), and represented 45% of the 51.2 million [pounds] in operating profits (versus 57.1 million [pounds] the year before). The reduction in revenues prompted headquarters to pull out of the confectionery and snacks businesses to better concentrate on frozen, grocery and fresh food operations.

Interestingly, about half of last year's turnover was generated by the company's extensive holdings in the Netherlands, which include such outfits as potato specialist Fri-D'Or BV and seafood concern Diepvries Monnickendam BV.

As for 1991, while anticipating that economic difficulties will continue, Hazlewood is nonetheless cautiously optimistic. "Disposable incomes are likely to be down, so we can expect the ready meal market to plateau before taking off again in 1992," said John Crook, executive chairman of the frozen food division. "But a compensating factor is exports, which are beginning to accelerate. And we are actively engaged in preparation for 1992, and the much heralded changes in the European market."

Fletchers on Rise

As far as Sheffield-based Fletchers is concerned, the greatest thing since sliced bread (which it introduced locally back in the 1930s) is sliced burger buns. It is the frozen bakery specialist's largest selling line. Indeed, the company has an exclusive contract to supply same to Kentucky Fried Chicken outlets in the United Kingdom.

Engaged in the fresh bread business since 1923, independently-owned Fletchers Bakeries Ltd. has been producing frozen goods for only eight years. During that time annual turnover rose from just 10 million [pounds] to 30 million [pounds], with frozen products accounting for fully onehalf of the total. Last year's profit was 2.8 million [pounds], with the 1991 net expected to reach 3.4 million [pounds] on sales of 34 million [pounds].

"We've tripled revenues just by knocking on doors," Eric Burns, sales director, told QFFI. "It's fortunate that we are in a market where there is a great national need for standardized product."

The outfit's range extends well beyond rolls and bread loaves, which it can respectively turn out 100,000 and 9,000 units per hour from four Lanham automatic plants. In addition, some 18,000 donuts an hour are produced from two factories (still another is scheduled to come on line in November) and 17,000 scones per hour from a separate plant.

Fletchers' line includes: sesame seed burger buns; plain, nutty and wholemeal sliced baps; hot dog and hoagie rolls; sliced currant teacakes; ball jam, ring, finger and giant jam donuts; sultana, wholemeal and cherry scones; American-style chocolate chip, blueberry, and bran and raisin cake muffins; apple, apple crumble and bakewell piece; sticky buns.

The frozen line is sold exclusively to supermarket multiples (a business worth 5 million [pounds] and growing) and the catering trade, including fast food chains and hotels. "We don't really want to pack our own brand for retail distribution, because it's hard to make money that way," said Burns.

Anyway, Fletchers is just about running at capacity as it is, selling some 1.3 million donuts, one million scones, and 500,000 loaves of bread per week. Among its private lable clients are J. Sainsbury, Tesco, Safeway, Morrisons, Woolworths and Granada.

"We also provide a lot of high street restaurants with fully-baked items," advised the sales director. "Bearing in mind the trend toward catering de-skilling, all customers have to do is thaw out the product in its packaging and then serve it. They don't even have to bake it off; and shelf life is three or four days."

After selling some small volumes to buyers in Paris, Fletchers is gearing up to better address export opportunities within the next 18 months. It used to supply hamburger buns to Wendy's in Germany, and is now looking to enter Greece through the same chain.

Certainly the company has not been reluctant to invest in the future. High-tech Pillsbury donut molding equipment and Rijkaart muffin and pie-making machines have been installed at Fletchers' seven-acre site where more than 600 workers are employed. During the past six years 10 million [pounds] has been spent to increase freezer, storage and production capacity. That figure will double by 1995.

Watch Watchbell

With the booming UK frozen pizza market now valued at over 100 million [pounds], there is a lot more topping the pies these days than just cheese and tomatoes. Catering to the need for precision-cut, IQF cooked meats is Watchbell Ltd. of Wincanton, Somerset. The company specializes in providing packers with a range of pre-diced or sliced pork shoulder, ham, chicken and assorted meat rolls.

"While the pizza sector was responsible for a large percentage of our 4.3 million [pounds] in turnover last year, we also supply large manufacturers of ready meals and baby foods," said Nicholas Torregiani, chairman.

In business for 10 years now, the firm started out by producing components for quiches and pie fillings from just 2,500 sq. ft. of rented space. Today it operates a modern 12,500 sq. ft. factory that boasts capacity of 100 tons per week.

"Our advantage over European competitors, who incorrectly insist that our product is hand-cut, lies in advanced cutting technology," advised Torregiani. "We have modified equipment, some of which is American-built, to turn out perfectly formed five-millimeter cubes."

Looking toward prospects in the EEC, Watchbell will be fully licensed to export to all member states by December.

No Complaints from Uren

While the frozen fruit industry may be sour for some at the moment, it remains sweet for H.J. Uren & Sons Limited. "We're up on last year in volume a little bit," reported Debbie Dutton. "And growth in exports to the USA has helped turnover, as the dollar has been relatively strong up until now. So we're doing well. People still have to eat, recession or not."

In business since 1905, the Heswell, Merseyside-based company grows, processes and distributes deep-frozen fruits, purees and concentrates to industrial customers worldwide. It specializes in supplying bulk quantities of raspberries, strawberries, blackberries, blueberries, gooseberries, black and red currants, cherries, apples, apricots, peaches, melons and tropical fruits.

Uren sources globally while drawing some tonnage from its farm near Dundee, Scotland. One of the world's largest importers of Chilean raspberries, it has people on site in Poland and Denmark buying strawberries and cherries.

Quick Frozen Foods International got a rundown on the late-summer European supply situation from Ms. Dutton, as follows:

Yugoslavia - Prices for raspberries and cherries were high due to reduced stocks caused by hot weather and political unrest that broke out into civil war. When heavy rains came, along with high winds, it was too much to help. This resulted in a 50% reduction in harvest, which greatly curtailed IQF production.

Poland - Strawberry output was coming along nicely. Exports of 3,000 tons in 1990 were expected to rise to 4,000 tons this year. Much is going to Uren's USA division in North Carolina.

Scotland - Raspberry quality was good, but the quantity was small. What's ailing production there is a combination of high labor rates and failure to invest enough to upgrade equipment.

Eastern Germany - Plenty of cherries were available. However, prices for dark, sweet varieties were sky high as output elsewhere (excepting the USA) was poor.

Meanwhile, eyeing new sales opportunities in Asia, Uren is thinking about opening an office in Singapore next year. In Chile, a procurement arm may be established soon. And in the United Kingdom, sorting operations will likely be relocated from Scotland to the Merseyside area. Headquarters will be moved there as well, as current quarters have simply been outgrown.

Sunbird's View

QFFI traveled to Ascot to get a rundown on the vegetable supply situation from Russell Blagg of Sunbird Foods Ltd., an international trading company that supplies many of Europe's leading retailers and industrial accounts. The Perkins Foods plc unit, which has since moved its offices to Windsor, specializes in a variety of Mediterranean, exotic and domestic IQF vegetables as well as mixes, blends and stir-fry products. The range is complimented with fruits, mushrooms, rice and potatoes.

Noting that certain crops were short, particularly those from Eastern Europe, Blagg elaborated:

Production in Poland, where Sunbird has two plants, is down.

Beans are short straight across the Continent - from Eastern Europe to Holland, Belgium, France and also in the UK.

The pea crop is expected to be fairly normal, perhaps slipping 10% at most. This could present an oversupply problem since consumption of green peas is declining as people increasingly eat alternative vegetables.

The availability of peppers, which has been off for the past two years, looks strained again in 1991. Spanish crops have been hit with a virus that could reduce yields by as much as 30%. It is hoped that the next harvest, due to come in at the end of October, will be better.

Output from Yugoslavia is uncertain due to political upheavel. And since Hungarian volume is short, it looks like Spain and Turkey will be heavily relied on again this year. But as Turkey is not a big producer, an overall shortage is likely.

Israeli packs of sweet corn are highly priced. Harvest from Spain and France were not yet in when this story was filed.

Considering the supply situation, Blagg suggested that customers make up their minds about ordering sooner rather than later. He added that business has been fair so far, despite the economic downturn. Sales last year were worth 13.5 million [pounds].

IceFresh

Confirming that the vegetable patch is a bit dicey at the moment was Ross Donaldson of Cromer-based IceFresh. The company serves as a sales office for a number of major producers including Unifrost of Belgium, Frudesa of Spain, Country Pride Foods of Canada, Dragon Gate of Taiwan, and Lenders Quality Foods of the UK.

"The recession's impact can't be denied," he told QFFI. "But there are some bright spots to report, especially on the industrial side. For example, we see more vegetables going into value added products and onto items such as pizza. This trend has been very good for business."

IceFresh's line of frozen vegetables and fruit is available in sizes ranging from 10 to 35 kilos. Among the products offered are artichokes, asparagus, bamboo shoots, beans, broccoli, brussels sprouts, carrots, cauliflower, celery, corn, spinach, blackberries, raspberries and strawberries.

The outfit also specializes in representing ice cream makers such as Artic of Belgium and Dedert of Holland. While some of the country's major domestic manufacturers have suffered from the effects of a more traditional, cool and damp British summer, Donaldson advised that the sales of his principals' novelty ice lollies have been brisk. "I don't know what we would do if the weather had been especially hot, as it is difficult enough to keep up with demand now."

[Tabular Data Omitted]

Table : Total Frozen Food Market (in millions of pounds sterling)

Total Market (m[pounds])   2,098   +5
Frozen Confectionery         9.4   +4
Frozen Fish                 24.7   +2
Frozen Meat Products        27.1   +3
Frozen Vegetables           27.0   +7
Savoury Food                11.8   +9

(Source: AGB superpanel)

PHOTO : A Wider View of Britain QFF Market

PHOTO : "Consumers see our wide range of frozen foods as not only convenient, but a good value for the money," says Iceland's Jill McWilliam.

PHOTO : Birds Eye's new MenuMaster for 2 range includes traditional British West Country farmhouse recipes such as Somerset Chicken in cider. The 14-ounce, dual-portion product is one of seven offered at a price range of 1.99 [pounds] to 2.19 [pounds]. Served as a main course, consumers and their own vegetable side dish.

PHOTO : New to MenuMaster's authentic Indian recipe range is Lamb Pasanda with Lemon Basmati Rice. The 11-ounce dish contains tender pieces of meat marinated with spices before being simmered in a sauce of yogurt, pureed cashews and cream. Cardamons, cloves, cinnamon and bay leaves have been added for flavor.

PHOTO : This larger portion Lean Cuisine For Healthy Appetites ready meal features Lean Beef Madras with Turmeric Rice. The 14.5-ounce dish is formulated to "satisfy even the healthiest appetite."

PHOTO : Scrunchies are aimed at the kids' market. The Findus product is available in four varieties. This one features eight chipstick coated nuggets filled with a blend of diced chicken and bacon, mushrooms and a lightly seasoned sauce.

PHOTO : The recession notwithstanding, Lean Cuisine has remained a robust brand in the UK, says Richard Webb, general manager of Findus.

PHOTO : Linda McCartney's meatless Ploughman's Pie is made of minced vegetable protein and traditional vegetables in a sauce topped with potato and vegetarian cheese crumble. It's part of a new frozen line produced by Ross Young's.

PHOTO : UK Vegetarian Frozen Food Market

PHOTO : UK Frozen Pizza Market

PHOTO : 1990 Added Value Pizza Sector: 61M [pounds]

PHOTO : Dalepak has just introduced Quorn & Vegetable Crispbakes. The product features a blend of quorn myco-protein pieces and crunchy vegetables in a light crumb. Two units are packed per six-ounce box.

PHOTO : Also new from Dalepak is Vegetable Waffles. Made from a combination of rice, diced carrots, onions and green beans, four come per 9.2-ounce box.

PHOTO : Frozen Vegetable Grills, Burgers Market in UK

PHOTO : While principally known for its prowess in co-packing and private label manufacturing, Hazlewood's premier retail brand is the Mr Chang's range of Chinese recipe dishes. Pork in Black Bean Sauce is among the products now being offered is redesigned six-ounce boxes.

PHOTO : Burger buns and baps are the "bread and butter" of Fletchers' growing frozen baked goods business. The Sheffield company also produces a wide assortment of donuts, scones and American-style muffins for the catering trade.