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It's 'premium' time in Great Britain, but not for ice cream's second brand.

Years ago, food marketing people spoke of "firsts and seconds." Then came "deluxe and regular." Now, hold on to your wallets and welcome "premium" brands.

A long recession in Britain has made customers excessively cost conscious and marketing people have responded by cutting prices and then clawing the cash back with higher priced brands. That is: premium brands. Ice cream marketers are certainly defining their brand policies in that way, but the frozen food industry has found a similar categorization with recipe dishes, desserts and specialty seafoods.

Marks and Spencer has taken up this premium position in its new food-only convenience stores. Who knows, premium policies could point the way out of recession. It may not be the kind of foot forward that politicians want, but the kind of demonstration of confidence that has the public spending again.

Henry Clarke, the American entrepreneur, was demonstrating a kind of confidence in the British economy when he added Lyons Maid to the rest of his ice cream portfolio put together from Hillsdown acquisitions. But his bid for second place in the UK ice cream industry has already found its way into the hands of the receiver. Mr. Clarke himself, if press reports are accurate, has joined the ranks of the unemployed. Pity!

The new marketing director of Haagen-Dazs, Simon Esberger, tells Quick Frozen Foods International that the "premium ice cream sector" has continued to outgrow all other sectors. The company's latest purchased information is from June 1992, when premium was up 27% against market growth up only 8%."

Wall's, which provides most of the figures offered in this market, reported in its 1992 Bulletin that the continued growth of premium ice cream resulted in a 2% increase in the value of the take-home segment, and that the presence in the premium sector by competitors such as Haagen-Dazs, New England and Loseley combined represent just 3.5% of the luxury/premium ice cream business! Clarke's liquidation will change some of these percentage claims.

Underlying trends are confirmed in the latest report from Leatherhead Food RA's Flairs databank. According to this source, in the year ending June 1992, some 331 new frozen food products were launched in the UK retail market, many of which reflected the trend towards value-added and premium products. In the ice cream sector, the "main area" of activity was said to be in premium items and bars.

So what happened to Clarke Foods, the new challenger? When Henry Clarke - whose Klondike Bar is still to be seen in American supermarkets - arrived in Britain he quickly made himself the second largest ice cream concern (after Wall's) by buying some of the Hillsdown acquisitions and subsequently taking over Lyons Made in February of last year.

In July the company mounted an old-style business conference in a London theater, mainly designed to pick up supermarket customers. Very few were forthcoming from that event and by September the company was reporting a shortage of working capital, the scrapping of an interim dividend, and the opening of talks with its bankers. Two thirds of Clarke's stock market value was wiped out and a news "blackout" descended.

This reporter spoke to the receiver's marketing people in November, only to get the telephone number of Ipe Jacob from accountants Robson Rhodes, who had instructed Clarke's executives and staff to say nothing to the press. Responses to QFFI's questions were unobtainable, but he was reported as being "optimistic that the company would survive through a restructuring or being sold as a going concern."

Full marks to Jacob, because within a month it was announced that Nestle, the world's largest food manufacturer, had bought most of the company's assets.

So, Henry Clarke's expedition across the Atlantic did not get him back into the ice cream business but has brought Nestle back face to face with an old adversary, Unilever's Birds Eye Wall's Limited. Nestle has ice cream operations in France, Portugal, Spain, Switzerland, the USA, Latin America and North Africa. It formed a joint venture earlier this year with Dairy Farm of Hong Kong to make ice cream in China, demonstrating the kind of global clout that will stand up against Unilever competition.

History will doubtless record that although Henry Clarke's dream has clearly faded, Mars and Haagen-Dazs, also from the United States, stirred up the UK market sufficiently to cause a revival of momentum. As well as being available in all major supermarket chains and in many hotels and restaurants, Haagen-Dazs now has 10 shops (including two new ones in Edinburgh and in London's King Road, Chelsea, plus seven Warner's Cinemas), giving it "national distribution," according to Esberger.

Mars too has set up distribution in the UK with the same vigor. It claims to have created a new market there in hand-held frozen snacks made from "premium" dairy ice cream and real chocolate. Indeed, so much so that the ice cream market as a whole had, at the start of 1991, grown 50% since 1987 - mainly as a result of frozen snack development.

Wall's in the meantime has been refurbishing its long-cultivated image as a brand leader into something that would reflect aspirations to stay at the top and in contention with Mars.

Wall's and Mars vie with each other now in market leadership claims, and it was from one of them that this reporter heard the statement that companies make share claims month by month in order to put their current market position in the best possible light.

There may be an ounce of truth in the above, but Wall's always used to project brand share position with national statistics that highlighted a national reputation. It learned this skill from associate company Birds Eye. In return Wall's may have taught Birds Eye a thing or two about positioning.

Healthy recipe dishes are among the frozen food industry's premium products, and it was in this sector that Birds Eye took lessons from American initiatives. ConAgra was among the first in this field on the US scene with Healthy Choice, but Birds Eye in Britain was quickly visible with Healthy Options. Both ranges built on the public recognition that "we are what we eat," and that food plays a major role in ensuring not only an even weight distribution, but healthy bodies too.

Cabinets in American supermarkets are full of healthy meals. So too in the UK where retailers have even taken them up in the private label programs and prices have risen steadily to reflect their premium character.

Leatherhead Food RA takes a different view, believing that over the past few years frozen food sales have slowed. This is probably attributable, it reports, "to greater competition from the chilled food industry, which has a more premium value-added image." But it is also due to the current economic recession, which, in commodity markets such as green vegetables, has encouraged consumers to switch from more expensive brands to own label products.

Not everyone will agree with that interpretation, but the Iceland freezer center chain probably would. Last July it was not altogether clear whether Chairman Malcolm Walker had or had not attributed his company's impressive sales performance to a change in strategy from frozen to chilled foods, but the record has now been put right.

Iceland, said Walker, had achieved an 11% sales growth in the six months to June 27, but this was expected to fall back to 7% in the second half Overall sales improved 16% to 480 million.[pounds]

The main sales growth came from chilled foods and an increased number of weekly transactions. The proportion of chilled foods sales advanced from 11% to 13%. Frozen foods accounted for 57% of volume against 60% in 1991.

Walker insisted that Iceland was not abandoning its traditional frozen food market. However, he said, "We are seriously in the chilled food business as well as frozen foods."

Iceland was also testing fresh produce in some of its stores. Confused? Fresh? Chilled? Frozen?

What about premium? Take a look at the most successful foods introduced in Iceland stores last year. The complete list of more than 200 lines has a distinct flavor of "added value," but Jill McWilliam, marketing director, told QFFI that the real successes were among pizza and gateaux, which is a kind of comment on the real meaning of premium."

The concept must deliver margin, whatever else it says. Even in a recession gigantica pizza at 2.49,[pounds] ham and pineapple pizza at 1.99,[pounds] Sweet Caroline Double Chocolate Gateau at 1.69,[pounds] and McVitie's Raspberry Cheesecake at l.99[pounds] - all all frozen - deliver the margins that ensure their survival. Nestle knows how to read the frozen food market and will take note with its new ice cream interest in Britain.

APV Pushes Compressors;

Ends Bitzer Distribution

APV plc, London England, has stopped distributing German compressors produced by Bitzer Kuhlmaschinebau GmbH. Meanwhile, it is putting increased emphasis on a new range of compressors designed for ozone-friendly refrigerants, including ammonia.

Bitzer had been represented in the UK by an APV branch at Milton Keynes for sales of compressors to the commercial and light industrial market, but as of Jan. 1 it has set up its own sales and distribution office. APV operations are not affected by disposal of the branch.

The new range of screw compressors for ozone-friendly refrigerants, the company says, is gaining acceptance among industrial and heavy commercial users.

Eismann Trucks Roll Out

With New Product Range

Eismann, the Metmann, Germany-based frozen food home delivery service, has introduced a new catalog that features everything from gourment recipes such as Putenbrust-Champignon-Pastete to diabetic dishes. Many items are microwaveable, and some re available exclusively through Eismann.

Newly listed ice cream offerings are Cinnamon-Plumb a l'Alsace, Midnight Mints (a confection f peppermint coated ith chocolate), Walnut Ice and Mars-Mini single-serve snacks. For the children there are Eddy's Burger Steak ices that come in the form of bears.

The torte line had been expanded with Champagne-Cassis, Linzer Torte, Gourment Tortchen (filled with blueberry cream) and Mohrenkopte (chocolate-covered cake filled with cream).

New from the bakery is Schoko-Teilshen (Chocolate-Pieces), which are chocolate-filled pastries.

The international cuisine theme is seen in Moussake, a Greek layered souffle of potatoes, ground beef, tomatoes and eggplant. And then there is Chile con Carne, a Mexican specialty made from chile beans, diced beef and vegetables in a spicy sauce.

In line with the motto,"It doesn't always have to be meat," Eismann is offering a so-called Farmer's Plan, which serves up five kinds of vegetables. Equally meat-free is Three-Cheese Pizza, made of emmenthaler, gorgonzola and Kraterschmelzkase (a soft cheese spiced with herbs).
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Title Annotation:News from Europe; marketing of premium frozen ice cream products
Author:Kemp, Graham
Publication:Quick Frozen Foods International
Date:Jan 1, 1993
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Next Article:UK retail multiples made money in '92, while many food suppliers missed the mark.

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