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Don't look now, but 1992 is finally here! Anti-climatic somehow, after historic '91.

Don't Look Now, But 1992 is Finally Here! Anti-Climatic Somehow, After Historic '91

During the late 1980s talk about the coming single European market in 1992 was rife in Britain. Then along came a very eventful 1991 to steal the spotlight with sensational stories about the breakup of the Soviet Union and the headlong rush away from communism and towards democracy and the establishment of so-called market economies across Eastern Europe. And there were other major events, such as:

Military operations in the Arabian Gulf and the remarkable United Nations performance led by the Americans; the rapid dismantling of apartheid in South Africa; civil war in Yugoslavia and Western Europe's inability to stop it; agreements to dramatically cut back nuclear weapon stockpiles; the almost global recession and its numerous side effects, which included a change of government in Sweden; large scale banking and commercial failures; mergers and sell-offs.

Considering all of the above, 1991 will certainly go down as one of the most exciting years in recent history.

Even the food market suffered from both the fact and the psychology of recession. Indeed, a constant media barrage of negative publicity prompted even those who could still afford to spend money to watch their wallets more closely. The two leading UK multiple grocery groups returned to competing on price -- although each denied this. Demands on manufacturers were more strident and the "also rans" in the retail league table found it difficult to respond to the pressures.

Of course, consumers tended to cease buying "luxury" items and instead hunted for bargains. In the case of frozen products, this meant that there was something of an across the board halt in the amazing rise in entree sales. Yet strangely, during the very short period of hot summer weather there was still a demand for high priced, upmarket ice cream confections. Hence when Unilever, the parent company of Birds Eye Wall's, announced third quarter results they were surprisingly good. One of the reasons given was the popularity of sub ice cream brands Magnum and Winner.

Nonetheless, this observer's guess is that those companies entirely dependent upon frozen food sales will not have enjoyed 1991, and will have cut back on marketing costs and even development projects.

The dominance of Birds Eye Wall's in support marketing became more and more evident as the year progressed and, in fact, at the end of August the company announced that it would be spending 1 million [pounds] a month for 12 months on a "meals initiative" in support of both MenuMaster and Healthy Options ranges. Then a major "25% Off" cod steaks promotion broke in November, with a stated goal of reaching eight million potential customers.

It is interesting that Birds Eye budgeted this huge amount on "new, improved |waferlight' crispy batter" and "crispy crunch crumb" fish products so soon after Findus had announced that it was pulling out of the coated fish sector in Britain. This came as a surprise to many because Findus had almost built its corporate image around fish in the 1970s and '80s. The Croydon-headquartered Nestle unit, which had already ceased vegetable production, will now concentrate on maximizing sales of prepared products produced in its one remaining factory.

It is not anticipated that Birds Eye will be putting too much push behind its peas lead line, because a poor harvest last summer in the UK has made it necessary to import supplies. On the other hand, television support has continued for fish fingers through the well known brand presenter, Captain Birdseye.

As for the other main players in the UK, one can't really be sure that UB (with its Ross, Youngs and McVities labels) or Campbell had enough brand impact during 1991, judging by the inroads made by several smaller suppliers. Managing to get cabinet space for their more limited offerings were Dalepak's Grills range and those from a few baked goods concerns.

Of course Sara Lee, with cakes, and McCain, with potato items and pizzas, are still most visible. Tiffanys is making an effort with a new line of Upper Crust microwaveable pies featuring cook-in-box packaging. McCain, which claims leadership in the UK pizza sector with just over a 20% share, opened a winter offensive with a promotion offering consumers 1 [pound] off their next purchase of Pizza Perfection if they agreed that the McCain product was the tastiest frozen pizza on the market. If consumers were of another opinion, they were offered 50% off their choice of other pizza products.

A month or so into the campaign, McCain said that it was set to expand the 148 million [pounds] pizza market even further with Pizza Perfection Micro-Pizza, which was billed as the first truly microwaveable pizza to hit the UK market.

This reporter does not know what the other pizza suppliers made of this claim, but McVities with its San Marco brand, and Birds Eye with the Gino Ginelli label, will be stern opposition. In fact, Birds Eye says that the Ginelli Panini Pizza and Pizza Quattro are both microwaveable, and that the latter's slices are 50% bigger than any others on the market. It seems likely that real dominance in this very fragmented sector, which is well represented by private labels, is still up for grabs.

Getting back to the baked goods business, it is interesting to see that another Unilever subsidiary, the margarine company Van den Berghs, has introduced frozen croissants and apple turnovers under the Stork Bakery brand. This is a category which has not really taken off in the UK. Maybe a company with such distribution expertise as Van den Berghs will be able to stir things up, as it probably has the post-1992 European market in mind. Certainly Unilever must have an edge on some of its main competitors, since it has a production and distribution network in place throughout the EEC.

Michael Jackaman, chairman of Allied Lyons, and Eric Nicoli, chief executive of UB, have both expressed serious interest in taking their companies onto the Continent to compete with USA giants such as Philip Morris and H.J. Heinz Co., the latter of which has achieved a foothold with its Weight Watchers range.

Meanwhile, Allied Lyons is said to be completing the sale of its Lyons Maid ice cream business to Clarke Foods, which is making noises about giving brand leader Wall's some real competition (see related story on page 138). Maybe Mars believes that it is also a company to be reckoned with after concluding a successful first full-year's distribution of ice cream versions of popular chocolate confections.

My, how things have changed. This writer well remembers when the only real brand names on the British ice cream scene were Wall's, Lyons and Eldorado. The last came under the Vesty Group's Union International banner. Many readers, including those in New Zealand, will recall when Vesty owned the Fropax brand of frozen foods which in the UK had a reputation for quality vegetables. Indeed, it actually held the Royal Warrant! Then suddenly in the early 1960s Union International, Lyons and Nestle merged their frozen food interests, presumably to offer more competition to Birds Eye and Ross Foods. Chaired by Sir Guy Lawrence, the consortium was soon joined by Eskimo. Mick Coburn became managing director of what amounted to the "new" Findus.

Today Ross is part of UB and we read not only of the planned sale of Lyons Maid, but also of the Vesty Group's debt problems.

Yes, 1991 has been a funny old year. One suspects that 1992 will be just as "funny" -- even before it's decided what exactly a "single European market" really means. Will citizens of the EEC actually all eat the same kind of bread? And will everything be priced in ECUs? Somehow, it is hard to see this happening for many years to come, no matter how statesmenlike political leaders may wish to appear.
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Title Annotation:Great Britain's frozen foods industry
Author:Webb, Kenneth J.B.
Publication:Quick Frozen Foods International
Article Type:Industry Overview
Date:Jan 1, 1992
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