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Hungary's retail frozen food scene crowded with local packs, Eurobrands.

Who knows which way the struggling economy will go in this restructuring country? While money is getting tight among consumers, a trip to a Budapest supermarket reveals some real loose QFF merchandising.

When one analyzes frozen foods and their potential in newly developing markets, the first thing that has to be scrutinized is the retailing infrastructure in place to expose such products to the public. So when it comes to assessing the potential for building up demand for QFF in Hungary, the country's volatile economic and financial standing must be fully taken into account.

In this light, the situation is far from healthy some three years after the overthrow of the Communist regime. For one thing, there is a budget deficit of US$ 2.51 billion on the books. Secondly, exports fell by 29% in the first quarter of this year. Thirdly, there have been persistent rumors that the national currency (the florint) would be devalued by up to 24%. And then there was that most unsettling story in the Financial Times of London citing a recent World Bank report that declared the country's two largest banks -- Magyar Hitel and Kereskedelmi and Hitel Bank -- have no capital and are technically insolvent.

One should add to the equation the fact that there is diminishing disposable income among consumers who in today's capitalist society must increasingly foot the real bill for public services. For instance, in July bus, tram and metro tickets in Budapest rose by 23.3%. The cost of raw materials continues to escalate, and not always on a legitimate basis. Only recently three domestic sugar refiners found themselves in serious trouble for price fixing, and there are others sailing close to the wind.

Nevertheless, familiar brand names such as McDonald's, Burger King, Pizza Hut and Levi are found throughout the capital city, and even Marks & Spencer has opened a diminutive clothing shop in the downtown area. There are even upscale stores selling designer fashions, the most expensive Swiss watches, liquor and jewelry. So there is a peculiar dichotomy at work, but basically it hinges on the fact that there is no middle class to speak of.

It is also worth noting that Coca-Cola is investing millions of dollars throughout eastern Europe and is the biggest foreign investor in Bulgaria. Battling fiercely with Pepsi for market supremacy, the arch-rivals together control a whopping seventy percent of the soft drink business in Hungary.

The general background to the retail food and beverage scene is buzzing with players endeavoring to keep tabs on an endless round of price increases. The chaotic situation is such that many food manufacturers from abroad are reluctant to make shipments due to late or nonpayment from customers. Conversely, there are a considerable number of price promotions reminiscent of those in the Western world -- and they are proliferating both in food and non-food sectors.

Strong QFF Presence

Frozen foods are in high profile in Budapest, and one is immediately made aware of it by red, white and blue Eskimo ice cream signs festooned upon literally hundreds of lamp posts in the main streets. Indeed, if Hungarian marketers have learned a lesson well it is the value of media exposure.

But perhaps one has to look in the direction of Julius Meinl to become truly aware of the significance of frozen foods in Hungary. The Austrian food and drink chain has acquired supermarkets, delicatessens and liquor stores throughout Budapest. Its Rakoczi Street outlet, which this reporter visited recently, provides a typical example of how Hungarian-style supermarketing works.

The store is open from 6 AM to 9 PM Monday to Friday, and from 7 AM to 5 PM on Saturday. There are 13 checkout counters, though none is scanner-equipped. A wide range of product groups is carried, but with limited selection within each. If there is a preponderance of anything, it's soft drinks and juices. However, frozen foods are very well represented in relation to the size of the store.

The Linde-manufactured open-top freezer case on hand features a cabinet run of 40' x 6'. Also on the floor is a small transparent slide-top cabinet made by Austria Haustechnik. The spot merchandiser, utilized basically for Eskimo Viennetta ice cream and a number of other Iglo products, was also packed to the brim with Lila Pause nougat crisp ice cream from Scholler.

In the main frozen food display area it appeared that little regard had been paid to presentation, although not a great deal of latitude existed. Fish, meat and pizza products were loosely lumped together in the cabinet.

Within the poultry range there were duck, chicken and giblets in plain see-through plastic bags with no brand identification. There were also prepared chicken slices from Hungary in a 500 gram pack, which also provided a German text.

Whatever else, the fish section of the cabinet did hold interest. Among the lines there were fishburgers from Finland in a 250 gram pack which had a multilingual text. And Findus was well represented by its 450 gram Fisherman's Pie offering.

Fish fingers are evidently popular with the Magyars, for Haussman and Hahn's 400 gram packs were well in evidence. A good deal of space had also been given to 1,000 gram polybags of natural hake portions which were priced at $4.69 -- but coming into seafoods and with some highly priced items, the packaging was rather substandard.

There was breaded calamari in a plain polybag of 0.5 kg at $7.10. And in similarly poor polybag packaging there were Mediterranean prawns.

A touch of the unusual was found from Arbi of Italy with 200 gram skin packs of mussels going for $5.81, while from the same company there was a 1 kilo bag of mixed seafoods at $17.68. Arbi must be a favored supplier for there was also a 500 gram unit of squid in a polystyrene tray priced at $8.85. And just to show that there was a touch of class in the cabinet, Julius Meinl merchandised cooked lobster from High Liner in a multi-lingual polybag at $16.46.

Germany's ubiquitous Dr. Oetker had obviously done his homework here, for the brand was represented with both ice cream gateaux in coffee and walnut and also the "Junge Koche" ranges of lasagne and Ristorante Florentine pizza.

Another foreign company in high profile was Aviko of Holland. Although its potato products may be a natural for most frozen food cabinets, this reporter saw only two items on display. Hanging overhead in the Aviko section was a sign which announced: Rosti, Croquettes, Noisettes, Parisienne, etc. Obviously the demand had been so great over the week-end that they were out of stock.

The indigenous Mirelite frozen food company had a wide range of products for sale, including Johanisbeeren and Cream Cake, frozen sauces, ready meals and vegetables. Also found in the cabinet were 500 gram polybags of dumplings, noodles and spinach, strawberries, vegetable mix (at 84 cents), cut haricot verts (82 cents) and peas (69 cents).

Microwaveable vegetable blends from Hungarian processors have also hit the market and it appears that the Magyars realize that they have to go in this direction if they are to make an impact on export markets.

Of the indigenous frozen food processors, Zalaegerszeg Cold Storage deserves a mention. Established in 1978, the company is now in private hands. The major stakeholder is Bank Leumi which is of Israeli origin.

Zalaegerszeg, which has the capability of storing up to 14,000 tons of deep frozen goods at -28 |degrees~ C, is also a major processor of agricultural raw materials and manufacturer of pastry products. The company is big in sweet corn, but also produces peas, french fries, wild strawberries, a wide range of fruits, plum-stuffed dumplings, Swiss rolls, pastries and a special Hungarian pozsonyi pastry.
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Title Annotation:News From Europe
Author:Abrahams, Ray
Publication:Quick Frozen Foods International
Date:Oct 1, 1993
Previous Article:A sample of what show-goers will see.
Next Article:Plenty of choice for Dutch shoppers sharpens competition in QFF sector.

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