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More merger mania sweeps Denmark, with Frigodan firmly leading pack.

More Merger Mania Sweeps Denmark, With Frigodan Firmly Leading Pack

As the eventuality of an open European market at the end of 1992 fast approaches, the Danish frozen food industry is adapting itself rapidly but methodically to cope with and take full advantage of the coming changes and opportunities. Buyouts and mergers continue to be the strategy of preparation, and this has now spread to and this has now covered in previous annual surveys of the Danish industry published by Quick Frozen Food International (QFFI) magazine.

The quickest route to increased market share and entry to new sectors - at least for those with the financial clout to do so - is to merge with a competitor or buy an existing company. Where the Danish frozen food industry seems to be heading is toward fewer but much larger companies with the ability to profitably compete on a pan-European scale.

With the backing of the large Danish distiller organization, Danisco, Frigodan has catapulted into a dominant role in just a few years. The firm controls ready meals producer Kirk Food, baked goods maker Mette Munk, the Nyborg Lynfrost coldstore and the nation's entire frozen vegetable industry. However, when you speak of the Danish vegetable business, you're essentially talking about peas.

Realizing that year in and year out one commodity cannot be relied upon to turn a steady profit, last December Frigodan reached beyond its borders and bought Spanish vegetable processor Vegajardin S.A. According to Claus B. Heinze, managing director, this acquisition not only gives the company an ability to produce a wider range, but also establishes bases at both ends of Europe. The primary output of the Spanish plant will be sweet corn, but the factory will produce as many other vegetables as are practical.

Last year when this magazine visited Frigodan headquarters in Copenhagen, Mr. Heinze had only been heading up the frozen food division for a short time. While possessing a strong management background, he had then had little experience with frozen foods and was full of questions. Now, after a little more than a year with the firm, the managing director has learned a great deal and has more answers than questions. More inportantly, they seem to be the right answers.

With an eye on rationalization, a new restructuring plan was embarked upon last October. The original Frigodan factory at Brenderup has been closed as well as a plant in Odense. The bulk production of these factories is now being split between existing facilities at Svendborg and Falster, both of which are being expanded to increase output. Additionally, the Svendborg plant will continue to produce mixed vegetables and stirfry meals. New premises are being built at the Nyborg Lynfrost coldstore to handle retail packing.

When all is finished, Frigodan will have invested some 70 million DKR. However, the annual cost savings are expected to be 30 million DKR.

QFFI asked the managing director what the ultimate aim behind the buyouts and expansions was. He explained that the goal was "to become the preferred supplier of vegetable-based frozen products to the European food sector."

Looking at the market realistically, the firm will primarily pack private labels for the retail market and supply in bulk to industrial accounts. When asked how the company will differentiate itself from the many others on the Continent doing the same thing, this reporter was told that Frigodan plans to produce only "the highest quality goods."

It is worth pointing out that many in the industry have expressed doubts about whether a company could profitably sell only top quality commodity items to the private label sector without having a strong branded presence to fall back on. Mr. Heinze commented that through the acquisitions in Denmark and Spain, the firm is no longer a medium-size concern, but one of the major vegetable companies in Europe. Because of the economies of scale it size permits, Frigodan expects to be able to compete profitably in the areas where others have failed.

Henrik Potts, marketing manager, stated that it is the "Frigodan culture" to have all employees thinking abut quality enhancement. He went on to emphasize that this was not just talk: "We will prove it to the industry through performance."

Regarding future acquisitions, Torben Bjerre-Madsen, vice president of finance, advised that other companies were being looked at. However, Frigodan first wants to complete the projects at hand and generate additional profits before getting into other ventures.

Foodmark

Consolidations are also taking place in the seafood industry. Foodmark, formerly known as SN-Invest, is heavily involved in this area. The company recently bought Thorfisk and has a large stake in seafood and ready meals maker Rahbekfisk. Foodmark also owns a big part of baked goods specialist Hatting. However, this firm, although profitable, would seem to be the odd man out as it hardly fits in with Foodmark's seafood objectives.

At the firm's offices in Copenhagen, QFFI met with Poul Torring. The co-director explained that Foodmark's key areas are, and will be in the future, fish and ready meals. It is banking on seafood prices to continue upward, plus greater profitability in added value products.

As the former head of the Association of Danish Fish Processors and Exporters, Mr. Torring is well qualified to comment on the seafood industry and suggest future acquisitions. He stated that there is currently a lot of redundancy in the Danish fish business and thus a need for restructuring. Companies bought by Foodmark will continue as before, but will take advantage of the parent's resources and ability to streamline production.

But the big problem in the seafood processing business these days is staying supplied with raw material. Here again, the company's size will come into play as it expects to become one of the biggest users of whole frozen cod.

For the future, Foodmark is looking at further acquisitions in Denmark and Europe. "There are 20 or so companies in Denmark alone which would be interesting," said the co-director. "However, no further buyouts are planned until the latest acquisitions are running as desired."

Danish Crown

The meat industry has not escaped being caught up in "merger mania" either. At the end of last year, three of the largest slaughterhouses - Venbo, Viking and Tulip - were consolidated to form Danish Crown. The resulting company is Europe's biggest producer of bacon and pork products and will present a formidable challenge to competitors in the EEC and other world markets.

While all these consolidations on the production side may be good for manufacturers, how does this affect the buyer? With fewer sources one might think the processors would now in be in the driver's seat as far as being able to firm up prices and terms is concerned. Soren Haugaard, head frozen food buyer for NAF, actually sees some benefit in this for large purchasers. The Copenhagen-based cooperative does the shopping for over 14,000 stores, so it is not exactly buying in case lots. Mr. Haugaard claims that purchasing from few but bigger suppliers makes his job a bit easier. Regarding pricing, larger companies are more concerned with and better able to ship great quantities and can therefore offer more competitive prices than smaller organizations.

To fully appreciate the changes that have taken place, it must be remembered that Denmark has long been a country of small-and medium-size companies operated by individuals. That the frozen food industry could adapt so rapidly to the changes taking place in the European marketplace is truly a credit to the Danish people. However, despite the trend toward bigness, the entrepreneurial spirit remains at a high level. It must not be forgotten that there will always be room for those with bright ideas and the ability to see them to fruition. Small companies will continue to be a big part of this country's frozen food industry.

The Home Market

With all the talk of processors gearing up for increased exports, it is easy to forget that the Danes have a strong home market - although overall tonnages may be low compared with larger countries. For the first time in many years, Denmark is enjoying a trade surplus. The economy is doing well and frozen food sales have benefited from this.

At the Copenhagen offices of Dybrostradet (the Council of the Danish Frozen Food Industries), Svend Aage Hedegaard informed QFFI that per capita consumption increased to 42.3 kilograms last year, up from 36.3 in 1989. The council director was quick to point out, however, that Danes did not necessarily increase their consumption by six kilos per person in one year.

Mr. Hedegaard has been working hard in recent years to come up with more complete and meaningful statistics. In 1990 the number of sources reporting figures increased, and this in itself caused a large part of the overall increase. At the same time, the way in which certain numbers are interpreted has changed and this makes year-to-year comparisons in some categories difficult. Still, these efforts are being made with the aim of providing the industry with useful data and the figures are gradually becoming much more accurate than in the last decade. Vegetables and meat grew by 23% and 29.5%, respectively, but it is thought that figures in previous years were underestimated.

Baked goods showed a 1.7% decline in 1990, but complete results for both catering and retail were unobtainable. Volume nearly reached 27,000 tons, which is fairly respectable when one considers the tough competition from bakeries. To the visitor, bakeries appear to be the single most common type of shop in the country - and many are open on Sundays.

Fish and seafood dropped by 8.3%, with catering down 56%. Salmon and trout, which racked up a whopping 417% gain in 1989, decreased in tonnage by 62%!

Ready meals saw their biggest jump since 1986, with volume growing by 11.9%. However, excluding poultry dishes, the category increased by 23.5%, up from a 5% growth rate last year. This could mean that the ready meal market, which has previously experienced low volumes and turned in non-existent profits for many processors, has finally started to move.

Microwave oven sales reached 103,000 in 1989, and the appliance now sits in 18% of all Danish households. This could explain part of the growth in ready meals, but microwave usage is still low compared to many other European countries. Smart processors are not relying on microwaveable products to capture a major share of the Danish market.

Reflective of the overall strategy, Dyfrostradet is in quite good shape. Despite the mergers and acquisitions, membership has expanded from 92 last year to record 95. For the first time in a long while, the Council's bottom line figures are in black.

This year the Council decided to give a Golden Pinguin award to the company with the most innovative product. Sixty-three branded and private label items from the retail and catering sectors were entered, and 13 of these were selected for the final round. The products were presented during the Council's annual meeting on May 23, at which time the members were asked to vote. The items were judged not so much on the actual product, but more on innovation, marketing and packaging.

Awarded at the dinner following the annual meeting, the Golden Pinguin went to Danish Prime for its line of Italian pasta dishes. While the products themselves are not so new, the package design is something which has surely never before been used in the frozen food industry. Instead of a photograph of the product on the front of the box, there is an artistic rendering which gives only a small clue to what is inside. There is a picture of the product on the back of the pack, but seeing this, of course, requires the consumer to pick it up and turn it over. If the packaging achieves this, then it has certainly served its purpose. Launching such products was no doubt a bold move, and one can only imagine the discussions that went on before the packaging was approved. Whether or not the concept is successful, Danish Prime must be applauded for its innovation.

Royal Greenland

More changes have taken place at Royal Greenland during the past 12 months than this writer has witnessed during any previous year. In keeping with the current trend of growth through acquisition, the Aalborg-based firm bought ailing Priess & Co. last March. In describing the purchase, Royal Greenland's new managing director, Otto Eliassen, said, "Buying Priess was a shortcut to get where we wanted to be."

What was achieved was instant entry into retail and catering markets that would otherwise have taken years to develop. Royal Greenland has previously been heavily involved in the industrial bulk segment, but found out the hard way that it's tough to make a living in this price conscious category.

The two companies seem to work well together. Priess originally got into trouble when various seafood species became scarce and it had difficulty keeping plants (which had been greatly expanded in recent years) operating at capacity. Royal Greenland has the raw material resources, and will now sell cod blocks, prawns, halibut and other items to Priess.

However, it will take more than a steady supply of fish to turn Priess around. Jorgen Norup explained that the first step will be to narrow the product range to a core of profitable items. Offerings will continue to be marketed under both the Prisco and Royal Greenland brands, in addition to through private labels being sold by both companies.

Mr. Norup stated that Royal Greenland had three objectives for 1990, two of which have now been fulfilled. The first was to make a profit, which has been achieved for the first time in many years. The 1990 bottom line was 50 million DKR in black. The second goal was to move away from the bulk market and redirect more into the retail and catering sectors, which has been accomplished through the purchase of Priess. The third objective is to diversify into other foodstuffs, a job which will take at least two years to complete. The company will first get its main seafood businesses in order.

The firm has resumed activity in the USA market and, according to Mr. Norup, "We are happy to be back, and we are there to stay."

The Priess sales organization in America has been bought and renamed Royal Greenland U.S. Managed by the capable Larry O'Toole, the Gloucester, Mass.-based headquarters is being expanded and a new office for selling and sourcing from Alaska has been opened in Seattle. Clouston, which had previously handled Royal Greenland in the USA, will continue to sell coldwater shrimp in the 14 western states.

As for new items, products are now being developed for both Priess and Royal Greenland. They will be ready in time for introduction at the ANUGA show in October.

Dat-Schaub

Having opened a plant in Dubai only last year, QFFI was anxious to learn how Dat-Schaub had been affected by the Gulf War. At the firm's Copenhagen headquarters, Kirsten Hagedorn explained that its substantial business with Kuwait was, of course, adversely impacted during hostilities. But now the market is coming back strongly. U.S. troops have been supplied with a variety of products directly from the Dubai factory, including salad dressings which sold in record quantities. The plant, now running at full speed, serves the entire Middle East with products developed for local tastes.

The export manager said that despite the low dollar, the USA has become one of Dat Schaub's major markets. Pork is being supplied for industrial use, while sausage and, remarkably, pound cake, are delivered to retail accounts. Apparently the pound cake is made in a way which allows it to be stored at ambient temperatures for up to six months.

All markets were reported to be doing well. In Europe, France, Portugal and Spain have developed nicely for meat sales. Italy is being looked at for expansion and the firm is actively seeking importers in that country.

Newly launched for the Middle East market is a range of sponge cakes. The three products each weigh 250 grams and have a layer of chocolate, strawberry or vanilla cream between two sponges.

Changes at Gram

At a time when many refrigeration companies are having trouble meeting last year's figures, Vojens-based Gram has organized itself in a way that has resulted in increased business and profitability. An ambitious restructuring program was completed last July, advised Ole Lassen, head of the refrigeration division. The company is now built around five divisions: component sales, contracting (which only operates in Denmark, Eastern Europe and a few other countries), ice cream equipment, home appliances, and commercial (which supplies equipment to shops and institutions). All of this was done in an effort to serve clients better by splitting the firm into product - and customer-related organizations which can operate more quickly and efficiently.

The restructuring is already paying dividends as business in the last year has been quite good. Turkey is becoming popular in Denmark, and a large slaughterhouse has been built using Gram equipment. Being fully automatic and

using the most hygienic methods, the plant is said to be the most modern in the world.

Germany continues to be a good market, while Southeast Asia, Chile and Eastern Europe are strong. New offices have been opened in East Berlin and Nairobi. Poland now has two Gram operations, one for refrigeration and the other for ice cream equipment.

H.J. Knudsen, who is in charge of ice cream equipment, stated that this sector has been particularly strong. After having a few good seasons, manufacturers are investing their profits in line extensions and factory modernization. Gram is capable of supplying complete plants which do everything from the start to cartoning and palletizing.

Lines with the ability to produce 28,000 cones per hour have been installed in Hungary and Czechoslovakia, and other systems have been built in Germany, Korea and Thailand. Two complete stick lines have been set up in Iran, and plants were constructed in Africa. The USA has continued to be as strong a market as ever.

In equipment, Gram's popular plate freezers have been modernized and improved. A new vertical plate freezer can be delivered at a height of only 900mm, which is important for ship installations.

A piston compressor, model HC-8125, is being introduced. Designed to run on ammonia or R-22, the compressor operates at higher efficiency levels than others.

In summing up the company's business philosophy, Mr. Lassen stated: "We deliver worldwide, environmentally-safe products with a high technology level."

Cabinplant

Like many manufacturers of seafood processing equipment, Cabinplant has experienced a drop due to the fishing industry's downturn. Not to worry. As managing director Vagn Hansen explained: "What we lost on the fish side, we have gained on the vegetable side."

The Haarby-headquartered company has profitted by supplying equipment for the Frigodan and Svendborg facilities. A pea grader with a capacity of up to 30 tons per hour has been installed. Using a new concept, it can process wet or dry peas at the same fast speeds. Previously wet peas would stick, thus causing the equipment to run more slowly. This could create havoc if it happened to be raining at harvest time. Cabinplant has solved the problem by employing an air cleaning system.

The firm's blancher coolers continue to be in demand, and Frigodan has bought two. A 16 ton/hour machine was installed at Svendborg, and a 22 ton/hour unit is being used at Falster.

In the Soviet Union Cabinplant has built a complete berry plant and a frozen mussel factory in Vladivostok with a capacity of two tons per hour. Iran has taken delivery of five lines for washing and grading warmwater shrimp.

Another Iranian processor has asked the inventive firm to build equipment for use with a small fish caught in the Caspian Sea. Because of their 6-7 gram weight, the fish pose quite a problem when it comes to processing them quickly. Cabinplant, however, has developed a machine which will clean, de-head and de-tail 300 fish per minute under the direction of one operator.

At the time of QFFI's visit in May, four new lines were under construction for Daloon. The machines, which produce spring rolls automatically at a high rate of speed, were designed specifically for the Nyborg firm some years ago.

Overall, business has been quite good with 1990 seeing the company's biggest turnover ever. This year, already off to a great start, is forecast to be even better.

For the future, Mr. Hansen expects to benefit from the lowering of EEC trade barriers in two ways. For one thing, the paperwork and red tape now involved in exporting to other European countries will all but be eliminated. Secondly, as processors gear up for increased production, they are demanding bigger lines and higher capacity equipment. Cabinplant will continue to develop new systems and refine existing machinery for greater efficiency.

Emborg

With all the talk of EEC barriers coming down at the end of 1992, many have forgotten that there are vast markets in countries beyond the Continent. Emborg Foods is one concern which lacks such tunnel vision. While enjoying a large European business, the Aalborg-based distributor has never relied on one market or product line.

The company is flexible and always ready to serve clients beyond the traditional markets. Emborg's product line is broad-based, encompassing virtually every frozen food category. This means there is something to be offered in any market. As product manager John Mortensen stated, "If we can't sell meat in a given place, we can sell fish."

Emborg has not, however, been immune from merger mania. In January it was bought from the Carlsberg Breweries by Dat-Schaub. Mogens Kaiser, general manager, seemed to think the change in ownership was a good one, stating that there was "greater synergy" between the two food companies than there had been between Emborg and the breweries. Additionally, it now has access to Dat-Schaub's Dubai factory which will help with sales in the Middle East.

Emborg has always been active in selling to Allied military forces in Western Europe. Now with the scaling down of NATO personnel, it has nonetheless managed to actually see an increase in business. It seems that many companies without expertise in this specialized area have gotten out, leaving Emborg wih a bigger share.

Last year the firm opened a USA office in New Jersey. It has been successful in importing a wide variety of products (mainly bulk), while buying beef and poultry domestically.

On the seafood front, three new saithe products are being marketed: a cordon bleu and two with coatings. Each two-portion box is printed in several languages for sale in a variety of markets.

Sabroe Refrigeration

Like Emborg, Sabroe looked to new markets for new business. The Arhus-based refrigeration manufacturer is currently building a turnkey fish plant on Phonpei. The factory dominates the Pacific Micronesian island, which is so small that the airport runway takes up its entire length. This must make for some interesting landings at times.

Holger Sperling informed QFFI that the value of the order is DKR 60 million. Sabroe handled the engineering and is supplying all freezing and refrigeration equipment. When the plant is up and running by the start of 1992, it will have capacity to process up to 15 tons of fish and shellfish per day.

Last January, Sabroe bought a 60% stake in seafood processing equipment manufacturer Carnitech. This writer asked how it fits into the Sabroe organization, whose other divisions are all refrigeration-related. It was explained that the acquisition makes for greater competitiveness in installing complete processing plants such as the one on Phonpei.

Sabroe has specialized in self contained refrigeration plants and coldstores, and Mr. Sperling indicated that this type of unit is becoming increasingly popular - particularly in developing markets. Twenty pre-fabricated coldstores were recently delivered to Russia. Demand has been strong in Eastern Europe, an area of increasing importance. Technical offices have consequently been established in Prague and Warsaw, with others being planned.

Jorgensen Engineering

With all the buyouts that have been going on, it is refreshing to see a company like Jorgensen Engineering still under private ownership and, more to the point, operating profitably. Business has been good for the Odense firm, and at the time of QFFI's visit plans were under way for expansion. Sales manager Bent Bytoft Jensen explained that a second floor will be added to the office facilities so that the engineering and electrical departments can be expanded.

Jorgensen, heavily involved in Eastern Europe for many years, continues to do good business there. A bean line has been installed in Poland, and an office has been opened in Czechoslovakia in cooperation with Frigoscandia.

Jorgensen's subsidiaries in Ireland and Australia have had good years, and a venture has been undertaken in Portugal. Managing Director Hanne Jorgensen informed that Ceia will make their equipment under license for the Portuguese market.

A blancher cooler has been supplied to Daloon for the spring roll maker's Nyborg plant expansion. According to Mr. Jensen, the equipment is more advanced than previous models, having the ability to measure flow, temperature and speed without the complications or expense of computerization.

As to the future, the sales manager commented that periods of buyouts and consolidations have taken place before in other countries such as England, only to see smaller companies spring up again. However, Jorgensen is taking full advantage of the current trend. While there may be fewer processors to sell to, it is supplying bigger lines and higher capacity equipment to them.

Danish Prime

If a company is going to successfully operate in the "new" Europe of 1993, the one thing it should have in all countries is a common identity. This is the thinking which caused Aalborg meat processor Meatcut to change its name to Danish Prime. The company's products were formerly marketed in the United Kingdom and German catering sectors, respectively under the Danish Prime and Danenfurst brands, while the Meatcut label was used elsewhere in Europe.

As part of the recently formed group of slaughterhouses known as Danish Crown, it was decided that all convenience food activities would now be handled by Danish Prime. This policy, along with access to the former Tulip ready meal plant in Faaborg, has allowed the company to enter the retail market. Previously it had been strictly involved in catering.

The initial thrust into the retail arena is taking place in Denmark where, according to export manager Jorgen Christensen, "Danish Prime will be very aggressive." Four pasta-based items are the first in a new international range of products. Using PET trays, all offerings can be cooked in a traditional over or microwave. The unique outer packaging, which is described elsewhere in this article, sets the line apart from competition in the freezer cabinet. Outside of Denmark, the range will be distributed under private labels.

In the catering market, further growth is expected in Europe - particularly in Germany where university and factory canteens are expanding. Previously employees brought sandwiches to work, but now companies and institutions are offering light lunches as their accountants have learned that frozen foods provide excellent cost and labor savings.

Danish Prime produces a wide range for this market - everythiing from burgers and value added meat products to soups and sauces. A new light range has been developed for Germany. Boasting a reduced fat level, all products have a maximum meat content of 40%. Ten years ago it would have been hard to imagine workers at the Mercedes truck factory eating such fare, but Mr. Christensen assured QFFI that the range is selling well.

Mette Munk

Henning Krustrup has been running the show at baked goods specialist Mette Munk for nearly two years now, and his efforts are beginning to show up on the bottom line. Last year, the managing director cited the United Kingdom as a target marked for expansion. With the help of a marketing campaign directed at both the consumer and catering levels, turnover is expected to triple in Great Britain this year. The main products have been profiterolles and Danish pastry bars packed primarily for private label distribution. The company is now in the final stages of selling its savory range to buyers in the catering field.

Breaking into the UK market was no easy task. While the potential is huge, Mette Munk faced formidable competition from the likes of Sara Lee and others. However, the company has gained from its efforts in more ways than one, and the techniques used in Britain will be used in campaigns in other countries.

Over the next few years, Germany and France will be targeted for expansion. Mette Munk's products may be few to France, but they are already selling through a freezer center chain. In Germany, the firm will run together with parent company Frigodan in building up the market.

On the home front, fruit tarts have been popular but, understandably, frozen Danish pastry is a tough sell.

Part of Mette Munk's marketing strategy has been a packaging redesign. Bright packs portray the product in a more appealing way, and a new logo showing eggs, flour and milk connotes freshness.

Mr. Krustrup described the 1989-90 period as a difficult time, but said that things are now turning around. Receipts should be up 25% this year, and the goal of doubling turnover by 1995 is right on schedule.

Carnitech Back on Track

Just south of Aalborg in Stovring is one of the most progressive manufacturers of seafood processing equipment on the scene today - Carnitech. However, in spite of the popularity of its advanced machinery, the company got into trouble two years ago when it was relied on for most of its volume - collapsed. The firm was quick to switch over the land-based installations but never really recovered from the loss of the trawler business. Management soon realized that it would need strong financial backing, so in January a major stake in the company was sold to Sabroe Refrigeration. The firm, now moving forward with new product development, is looking towards a bright future.

Public relations manager Dan Reedtz explained that Carnitech has developed a new continuous steam cooker. Designed for delicate products such as shrimp and other shellfish, it is fully automatic and offers maximum yield due to insignificant weight loss. The machine is compatible with existing production lines and has a capacity range of 250 to 1,500 kilograms per hour.

A new dynamic shrimp grader has also been developed with maximum yields in mind. The machine grades product by weight, with a tolerance of plus or minus one gram. It can handle up to eight gradings.

Although there has been a downturn in the seafood business, Paul-Erik Andersen, sales director, informed QFFI that a steady flow of orders is coming in, including some very big jobs. In Russia, Carnitech is currently constructing a major on-shore factory for processing sturgeon and carp. The contract is worth 60 million DKR, but as part of the deal the company must take fish as partial payment. Seattle-based Marine Resources, a USSR-American joint venture, is involved with this arrangement.

Carnitech has specialized in shrimp processing plants in Southeast Asia and continues to be a leader in that part of the world. It has a sales and service agency in Bangkok, and a similar operation will be set up in Singapore to cover Indonesia and Malaysia. China and India are being looked at for future development.

Danfoss

It is not often that governmental regulations have a positive effect on anyone's business. However, refrigeration controls giant Danfoss is banking on more than a little help from EEC rulings regarding the handling of frozen and refrigerated foods.

Uwe Bartram, sales and promotion manager, explained that trouble started in the 1980s when consumer demands required processors to take many of the additives out of their products. This in turn meant that the food was less tolerant to indifferent handling, and could become quite dangerous to consumers if upper temperature limits were exceeded.

The British government responded to the threat by passing the Food Safety Act in 1990. Basically, the law sets temperature limits on a wide variety of products and requires documentation for every step of production, distribution and retail sale. Similar rules are expected to be adopted throughout the Common Market.

This is where Danfoss comes into the picture. The Nordborg company has developed an array of electronic controls and monitors which can greatly simplify things for retailers and distributors. In a retail shop, for instance, control units can be placed on all appliances and linked to a central location where they can be monitored. Precise information about the reasons for errors can be easily obtained, facilitating quick repairs.

The use of electronic controls also results in major energy savings. Plant operation can be optimized and energy consumption is therefore never higher than necessary.

Mr. Bartram admitted that while sales of electronic controls have grown every year, the market has been slow in fully accepting the new technology. However, he is sure that demand will build rapidly as the new regulations come into force.

Maersk

One problem shared by all frozen food processors is keeping the product well below freezing temperature until its final destination is reached. This might not be so difficult for companies conducting domestic business, but what if you're selling to countries thousands of miles across the ocean?

One solution is to call Maersk shipping lines. As the world's largest container carrier, it not only has more reefer capacity than anyone, but specializes in transportation of frozen and refrigerated foods.

Part of the A.P. Moller group, Maersk started out in business back in 1904. It now operates 150 vessels, 50 of which are strictly dedicated to worldwide container shipping. At the firm's impressive Copenhagen headquarters, Jens Toft Olesen explained that Maersk even designs and builds some of its own ships and containers.

The company owns a fleet of 12,000 reefer containers. Known for innovative shipping concepts, Maersk has developed a 45' high cube container which provides 38% more capacity than the standard 40' container. All employ microprocessor controlled refrigeration equipment which can detect any malfunction so that appropriate action may be taken.

Maersk operates the biggest container vessels afloat. Built at the firm's Odense shipyard, the M-type ship can handle up to 500 refrigerated containers. Twelve of these ships are now either at sea or under construction.

Through a combination of sea and land-based transportation, Maersk can make on time deliveries virtually anywhere in the world. A network of computer and satellite tracking systems operating through 150 offices in 50 countries allows customers to obtain information about their shipments in a matter of minutes.

Maersk has been providing regular cargo service between the United States and the Far East since 1928. Earlier this year, in conert with Sea-Land, the company embarked on a program of five sailings each week from the USA to Asia. Realizing the importance of Southeast Asia, two of the routes include Singapore. Service to Japan has been extended to 10 calls at five different ports each week, and deliveries to Northern Asia have been increased. In an alliance with P&O Containers, two weekly sailings are now provided between Europe and Asia.

Scanima

Given the competitiveness of the freezing equipment business, it is always surprising to see a new company start up in this field. Begun two years ago with the lofty goal, as stated by Holger Colding, "of building high quality equipment incorporating a higher degree of hygiene and technology than others," Scanima hopes it can provide the solutions processors are looking for. The managing director told QFFI that the Aalborg firm has the financial resources to do this, aided by a solid background in the manufacture of food equipment.

Mr. Colding explained that he previously owned a company employing 300 people that produced machinery for the meat industry. After selling out, he started Scanima and also acquired the rights to a spiral freezer belt. Based on the further development and simplification of the drum system, the belt is guided on only one side. This allows cold air flow across the belt, making it accessible from the side. Products can be fed onto the spiral itself, where the belt is collapsed thus preventing deformation of thin products.

Freezers have been sold in Denmark and the company is now looking at the rest of Europe. The latest installation was for baked goods producer Hatting. Scanima provided a line for bake-off products which included a proofing machine and a freezer with capacity for two tons per hour.

Ingmar C. Pupp, manager of freezing equipment, advised that the company makes other items as well. Scanima produces mixing machinery for a wide variety of applications. For instance, a machine for de-aerating cold ice cream has been developed. Its use avoids the normal method of heating ice cream, which adds to the cost and time involved in the process.

Scanima also acts as a center for developing product ideas. One gets the impression that what Mr. Colding likes doing best is creating new concepts and solving production problems for his customers.

With a good production facility, the firm can easily turn ideas into reality. Scanima manufactures a high percentage of its equipment and subcontracts for specialized components.

Beck Kartonnage

With whitefish catches down, one might expect the block liner business to be off this year. Not so, according to Jorn Pedersen of Beck Kartonnage. The sales and marketing manager conceded that although orders are slow in coming from Europe, the company has more than made up for it in other parts of the world. Forty-five million fish block liners were sold in 1990, and an increase of 10-15% over that is expected this year.

At the time of QFFI's visit in May, the firm's Bornholm plant was running two shifts and production was up 35% over the same period last year. Mr. Pedersen explained that this was primarily due to increased sales in the USA and South America. Leading up to the pollock season, three to four containers per week were being sent to the company's Seattle base. Interestingly, 25% of the stocks there are sold to Polish trawlers.

As catches and quotas decrease in the Western world, Beck is looking increasingly toward the East for greater sales. Mr. Pedersen commented that block production is shifting from Korea to Thailand due to lower labor costs. The company has received large orders from the Southeast Asian country, and an agent has been appointed in Thailand. Malaysia and Viet Nam are being studied as well.

Russia and her former satellite countries also look promising. Contacts have been made and distribution plans are being worked out. Referring to this potentially vast market, Mr. Pedersen stated; "We will be there as soon as they are ready."

To retain positioning as the world's number one supplier of block packaging, Beck has an ongoing development and quality control program. This is expected to result in it being awarded the internationally recognized ISO 9000 quality standard by the end of the next year.

Realizing the limitations of the fish block business, Beck is now looking into other applications for its liners and freezing frames. Meat, poultry and vegetables are being studied, and the firm expects to make inroads into these fields soon.

Norfo

Like Beck, seafood equipment manufacturer Norfo is seeking new markets to keep volumes up during the fishing industry slump. The inventive Bornholm firm has developed a wide array of machinery including box washers, freezer frames, block cutters, graders and scales.

Kai Hansen, sales director, revealed that a big plant for processing salmon was recently shipped to Russia. Norfo has experienced a strong interest from the USSR, but unless a company is willing to take part in barter arrangements, payment can be a problem.

In Micronesia, Norfo is working with Sabroe on a large fish plant in Phonpei. Sabroe is supplying all the freezing and refrigeration for the factory, while Norfo provides the seafood processing equipment.

However, while such large projects can be quite lucrative, the company is not relying solely on seafood accounts for growth. A line to cut frozen spinach blocks for retail packs has been installed at a Bonduelle facility in France, and machinery for converting meat blocks into cubes has been sold to a client in Japan. Mr. Hansen, commented that "three years ago we wouldn't think of such projects," but now, installations outside of the fish sector represent 20% of volume. The seafood industry will always be Norfo's mainstay, but other applications for its equipment are actively being pursued.

The company is constantly developing new machinery and refining existing equipment. To meet industry demands for greater accuracy, its fish cutter is being redesigned to produce portions within a tolerance of two to three percent of desired weight, whereas others come within 10%. The new cutter is expected to be ready for delivery by the end of the year.

Norfo's block cutters are used by most European processors. The machines are accurate, easily adjustable and designed to link up with other equipment such as Stein or Koppens batterers.

Commenting on the consolidations of processors in Europe, Mr. Hansen said: "There are fewer people to sell to, but those left are in a better position for larger lines. We aim at selling good, well engineered equipment rather than just nuts and bolts."

P. Taabbel & Co.

As cod quotas have been cut and prices for the species have risen, a variety of underutilized whitefish have come on the market. Whiting from South America, hoki from New Zealand and pollock have all achieved a strong presence.

Now, P. Taabbel & Co. hopes the grenadier will become a common name among whitefish users. A deepwater inhabitant, it is related to cod and has a similar texture. Feeding primarily on prawns, the taste is said to be sweeter. In plentiful supply, the annual catch should be greater than 1,500 tons. There are no quotas, as yet, and the price is a good bit cheaper than cod.

Currently, the fish is available in IQF boneless fillets and two types of breaded portions. Products are packed to both retail and catering specifications.

How successful will the grenadier be? At this point, all one can say is: How many people had heard of hoki three years ago?

While the grenadier might be new to the market, Taabbel is not. Willy Bendt Petersen told this writer that the Hanstholm-based company was founded in 1990. Annual turnover is about DKR 275 million, of which more than 70% is earned from exports. The main products are prawns in brine and plaice fillets - both offered in natural and value added forms with a variety of breadings and stuffings. Cod, whiting, saithe and haddock are also utilized for value added products.

Commenting on the future of the seafood industry, Lars Taabbel emphasized that with increasing raw material prices and shortages, a continuing rise in value added products is foreseen. To meet this challenge the company is constantly developing new products. The managing director stated, "We are investing millions of DKR in our research and development division every year."

Tough going ahead is seen for smaller seafood outfits in Denmark. Previously, companies were allowed to send employees home if no fish was available for processing. That sounds reasonable enough to any businessman, especially in these times of fish shortages. However, the government has disallowed this policy and now requires firms to pay workers whether or not any labor is actually performed.

Daloon

Spring roll maker Daloon has proven to the Danish frozen food industry that a processor need not be part of a large conglomerate to compete profitably in the European marketplace. With plants in both Denmark and the UK, the company has managed to remain independent.

Director Hemming Van attributed the firm's success to ongoing product development and a policy of identifying potential markets and aggressively going after them. A $10 million expansion is under way at the main factory in Nyborg. Four additional lines have been installed by Cabinplant, bringing total capacity to a full 10 lines. And 1,500 square meters have been added to allow for better packing and development facilities.

Germany, the company's biggest single market, recently contributed a "remarkable increase" in sales. For further growth, Daloon is looking at the catering market. Describing its entry into what was the East German market, Mr. Van stated, "We took a deep breath, closed our eyes and jumped in. Business has proved to be good and is building up at a steady pace."

Daloon entered the Spanish market for the first time this year, and it is continuing to develop its range in France. Different rolls with more saucy fillings have been created for central and southern Europe.

As for other new products, a line of souffles is being developed for the Danish and German retail sectors. It is expected to be ready for an autumn launch.

Despite a sagging economy, frozen food volume grew by 1% in Sweden last year, recording a per capita consumption rate of 29.3kg. While this gain may seem modest, one wonders if there would have been any increase at all were it not for the efforts of the Swedish Frozen Food Institute, Djupfrysningsbyran. The organization, which constantly runs programs to stimulate retail sales, supplies promotional material to both the retail and catering sectors.

At the Institute's headquarters in Helsingborg, Kjell Olsson told Quick Frozen Foods International that a three-year plan to increase consumption has been embarked upon. A heavy campaign utilizing both printed and video material has been launched to educate chefs in the uses of frozen foods. A similar program is aimed at retailers to promote better handling of products.

A contest is being held at the retail level for the best frozen food promotions. Three prizes will be awarded and the winners will go to France next year. Between 400 and 500 stores are expected to compete.

Although government subsidies for workers' lunches have been dropped, the catering sector has surpassed retail to command 50.5% of the total market. Mr. Olsson commented that faced with a decline in business, many restaurants may be using more frozens to cut costs. There has also been an increase in frozen foods used in company canteens as firms try to offer workers a low cost alternative to eating in restaurants. During a visit to Sprinter, QFFI noticed an interesting approach to in-house catering. The packaging machinery manufacturer has installed six microwave ovens and offers workers a variety of ready meals to select from, available at cost.

Looking at individual categories, most of the big tonnage sectors experienced declines or remained relatively flat. Vegetables saw a 1% increase. Fish, however, which boasts a higher tonnage, slipped by 2%. Meat dropped by 1%.

The only volume categories with significant gains were potato and poultry products which grew by 3% and 6% respectively. Potatoes are broken down into french fries and "others." It is this latter category which held up the sector, showing an increase of 13%.

Poultry and turkey claimed a 6% rise, and it is significant to note that in the category raw parts had the biggest increase at 25%. Turkey is not broken out individually, but it is thought that this made a strong contribution to the overall gain in the category.

Pastry products were perhaps the biggest winners, logging a 21% gain. The sector includes pizza, which grew by an impressive 50%, although volume is still a bit low at 3,163 tons.

Surprisingly, pasta dishes, which are seeing strong growth elsewhere in Europe, dropped by 10%.

Ready meals advanced by 4%, but this is only half of last year's increase, indicating the market may be reaching the saturation point. Microwave ownership remains flat, with 40% of all Swedish households possessing the appliance. It is thought that any new sales are coming from present owners replacing their ovens with second generation units.

While it is difficult to find much sparkle in last year's figures, Mr. Olsson is confident about the future. Commenting on the current political climate, the Institute director said, "It's a very good time to be in Sweden right now, despite the recession." It seems the shakeup in Eastern Europe has caused many people to re-evaluate Sweden's socialist government and become more capitalistic, which will be better for business in the future. Sweden has decided to join the EEC, and this will further stimulate the country's already massive export business.

The Institute itself is a good barometer for the growth that lies ahead. Membership, up by 10, now stands at 37.

Frigoscandia

Freezing equipment giant Frigoscandia continues to refine existing machinery and introduce new products, but the big news is in potato processing. Earlier in the year, the Helsingborg company bought Kristianstad-based Potato Processing Machinery AB. The move was described by Folke Plymouth, head of Frigoscandia Food Process Systems, as "one stage in our ambition to offer the food industry complete systems."

Leif Rynnel explained that since acquiring PPM in January, the firm's turnover of the first quarter has equaled that of last year. This is not entirely due to Frigoscandia's influence. PPM has designed new machinery which fits in with today's demands for healthier products. Its Chipsfryer CF 300 can process french fries with a very low fat content. The Multi Turbo Blancher MTB 900 produces chemical-free mashed potatoes.

Reportedly, PPM will be run independently under the management of its original owners. However, the firm will now have access to Frigoscandia's worldwide sales and service organization.

Frigoscandia's Stein division has developed three new oven systems in the last three years. Two of these, the Jet Stream Oven and the Vertical Flow Oven, utilize heat and steam at a very high air flow to cook products in the shortest possible time. The GyroCompact Oven has, as the name implies, been adapted from the popular Frigoscandia Gyro-Compact freezer. Like the freezer, the oven uses a self stacking conveyor system and is designed to take up a minimum amount of floor space. It is especially well suited for products such as whole chickens that require longer cooking times. It can also be used for vegetables, bread and meat products.

Not to overlook the freezing side of the business, there have been new developments there as well. A Cart-o-Cold system has been designed to meet the special requirements of freezing products in cartons. It has proved especially popular with the meat industry.

Mr. Rynnel explained that liquids, frozen in pellet form, are becoming increasingly popular. The advantages are that pellets lend themselves to low wastage and the shape of the product allows quicker reconstitution. A Pell-o-Freeze system has been designed specifically for this type of product.

Notwithstanding the success of its oven counterpart, the GyroCompact freezer proves to be as popular as ever. Over 1,000 of the reliable units have now been sold.

Electrolux CR

As European retailers are devoting an increasing amount of space to frozen food departments, Electrolux Commercial Refrigeration has developed a range of cabinets to meet the demand. All of the company's products are well as to insure product quality.

Lennart Wik explained that there has been a sharp increase in demand for small plug-in cabinets for impulse sales of ice cream and other items. The Crystal cabinet has been quite popular due to its compact size and large glass areas which offer better product visibility. The units take up only 1.5 square meters of floor space, but can be loaded with 330 liters of product. Crystals have been bought by all the major ice cream manufacturers who, in turn, install them in shops carrying their products. In the first half of this year, 1,000 units were supplied to Germany alone!

In an effort to increase sales in outlets with very limited floor space, such as gas stations, a new half-size Crystal cabinet has been developed. The CGI 17 model offers the same high visibility characteristics of its big brother, but requires only .8 square meters of floor space. Some 165 liters of product can be sold from the cabinet before it needs refilling.

Like Crystal, the Carisma range of large supermarket gondolas is designed for maximum product visibility. Flexibility has been built into the line, allowing store planners to create an infinite number of designs by using different corner and end cabinets. Introduced in recent years, Carisma cabinets have been sold in all European countries north of Switzerland. Delivery time, which is normally six weeks, is currently running from 10 to 12 weeks.

A tour through the Arvika factory revealed part of the secret to the company's success. Electrolux has complete control over production, with very few components being subcontracted. All doors, condensers, evaporators and insulated panels are made on site. In fact, compressors are the only major components which are bought. All cabinets are thoroughly tested as each one is run for 18 hours before shipping.

As consumers are becoming more aware of environmental problems related to the use of CFCs, Electrolux has been quick to respond. While a CFC-free refrigerant that is completely safe to use in a retail setting has yet to be developed, the company has switched to the more ozone friendly R-22 for use in its freezer cabinets. Insulated panels are now being made 100% CFC-free without having to increase their thickness.

Tefco

Cooking equipment builder Tefco is enjoying the benefits of the healthy eating trend. The firm specializes in belt grills in which the only fat used is that which is in the product itself. This, in turn, produces a leaner product which is what processors are being asked for.

Last year was Tefco's first year in production, and managing director Lars Holmlund reported the firm sold three times as many machines as forecast. Sales in 1991 are expected to be at least as good. In addition to the belt grill, infrared cookers have now been developed.

Denmark proved to be a strong market. A big machine was sold to Danish Prime, and an installation was made at Danaeg for cooking pancakes and eggs.

In Italy a machine was sold for cooking aubergines (egg plants), and in Germany Tefco equipment is used for potato pancakes. The UK market has been strong too. In the USA the company is represented by Proctor & Schwartz, which has installed a Tefco cooker in its technology center.

A new device has been developed which can put grill marks on a product. Asked how this differed from existing equipment which performs the same function, Mr. Holmlund explained that with the new machine grill marks result from the cooking process rather than being added afterwards. This not only does away with the charred taste produced by other methods, but grill marks can be achieved on both sides of the product simultaneously. A patent has been applied for on the machine.

Sprinter

While buyouts among processors may not be good for some, packaging machinery manufacturer Sprinter is benefitting from the European consolidations. Marketing manager Bengt Evjen explained that when processors operate bigger plants, it becomes economical to run higher capacity lines. The Halmstad company has been supplying high speed equipment to North America for years, so it is ready to fill the demand.

Mr. Evjen stated that through April Sprinter had achieved the sales that were predicted for the entire first half of the year, primarily due to increases in the European market. Two large Traytite packaging systems have been sold to Europe, and one has been shipped to the USA in recent months. Designed mainly for ready meals, Traytite has proven to be popular because it requires no outer packaging. This saves on material and shipping weight.

The "just in time" method of material deliveries has taken hold among food processors, and Sprinter has designed carton erecting equipment to fit in with the concept. Its latest hot air machine can erect 140 cartons per minute and be adjusted to make any size change within two minutes. This allows processors to save on packaging storage costs and down time.

A new generation hot air system has been developed for Sprinter's popular S-2000 lid sealer. Reportedly, the machine has more efficient heating units which require less energy to operate. Over 60 quick change lid sealers have been delivered.

PHOTO : Claus B. Heinze, managing director of Frigodan.

PHOTO : It doesn't look like much in this early construction photo, but when completed, Frigodan's new pea production line at Svendborg will be among the biggest and most modern in Europe.

PHOTO : Torben Skou of Danish Prime accepting Dybfrostradet's firs annual "Golden Pinguin" award from Martin Jensen of Frisko Sol Is A/S.

PHOTO : This is the unique packaging and one of the products that won the "Golden Pinquin" prize for Danish Prime. The firm hopes the new range of pasta items will be a winner with consumers as well.

PHOTO : With full labeling in Arabic as well as English, this is one three new sponge cakes Dat-Schaub has launched in the Middle East.

PHOTO : Vagn Hansen of Cabinplant with spring roll machines destined for the exansion at Daloon's Nyborg plant.

PHOTO : Two portions topped with lemon and cheese is one of three new saithe products launched by Emborg. Indicative of the firm's presence in far flung markets, cartons are printed in four different languages.

PHOTO : Jorgensen Engineering's managing director, Hanne Jorgensen.

PHOTO : Mette Munk has entered the French market where they are selling savory products, such as this one with broccoli and smoked chicken, through a freezer center.

PHOTO : Dan Reedtz shows Carnitech's new continuous steam cooker. Designed for delicate products, the new cooker can handle volumes up to 1500 kg. per hour.

PHOTO : Maersk operates the biggest container vessels on the seas. Ships like this M-type can carry as many as 500 refrigerated containers.

PHOTO : Holger Colding (I) and Ingmar Pupp have high hopes for the future of Scanima.

PHOTO : Packaging for about 50 million fish blocks comes from the Beck Kartonnage plant on Bornholm each year.

PHOTO : Norfo's automatic sawing systems work equally well on vegetable, meat or fish blocks.

PHOTO : The PPM Chipsfryer CF 300, shown in open and closed form, has been designed to produce low fat french fries.

PHOTO : In keeping with the trend towards healthier foods, Frigoscandia's PPM division has developed the Multi Turbo Blancher MTB 900. The machine makes additive-free mashed potatoes.

PHOTO : Lars Holmlund, managing director of Tefco AB in front of company headquarters in Lund.

PHOTO : The new Infrared Cooker IC 1030 from Tefco has a cooking zone of .950 meters in width and a length of 3 meters.

PHOTO : The Electrolux Crystal cabinet has proven to be very successful for impulse sales. These units are awaiting testing before being shipped to Langnese Iglo.

PHOTO : Bengt Evjen of Sprinter demonstrates one of the company's versatile carton erectors. This one was built for a processor in Japan.
COPYRIGHT 1991 E.W. Williams Publications, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Title Annotation:frozen food firms
Author:Williams, Andrew H.
Publication:Quick Frozen Foods International
Date:Jul 1, 1991
Words:9832
Previous Article:Healthful French frozens: a category yet to be born.
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