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One man's frozen food point of view: on '1992' and all that ... hyperbole.

One Man's Frozen Food Point of View: On `1992' And All That...Hyperbole

Not many of the dates learned in history lessons at school remain in mind as the years roll by. However, in the U.K. the year 1066 has always been one of the most remembered dates. It was the year of the Battle of Hastings which heralded the arrival of William the Conqueror from Normandy. Perhaps that date is recalled not because of the battle, and the arrow that pierced King Harold's eye, but because it signaled the beginning of the Norman period which so drastically changed the British way of life.

Now another date is threatening to be one that must be remembered--it certainly will be if the media have their say! I refer to the year 1992 when the "Single European Market" (SEM, one supposes!) is due to take effect as most trade barriers within Western Europe, or at least in the Common Market, are to be dismantled.

The British government are currently investing over 10 million pounds in a TV campaign to encourage businessmen to be ready to take advantage of this great new sales opportunity, and there is one seminar or conference after another on the subject. Similar hype is the order of the day in the other countries of the EEC as all prepare to greatly increase their exports into a static, or near static total consumer market!

There will obviously be winners and losers and some sections of British industry, including the Confederation of British Industry (CBI), are already crying `foul' because they contend that large corporations from outside Western Europe will try to buy up U.K. bases whilst the British monopolies and mergers legislation will hinder domestic companies in efforts they might wish to make in order to be more competitive with the international corporations. This explains why so many U.K. companies have bought into the U.S.A.! These days the Atlantic seems to be no more of a trade barrier than the Channel once used to be, and will be no longer when the Tunnel is finished!

But how will SEM affect the quick frozen food industry within the Common Market? Maybe not nearly as much as it will some other markets. Why? Partly because of the strong share of the total market held by Unilever and Nestle. Easily the largest slice of that total is Unilever's with their Birds Eye brand in the U.K., the Findus brand in Italy and Iglo just about everywhere else. Nestle, the Switzerland-based corporation, use the Findus brand in the U.K. and in some of the other Common Market countries. Nestle use the Stouffer brand in the U.S.A.

All this is proof that there is a difference between corporate names and brand names! This is further evidenced by the variety of brand names used by the United Biscuits frozen food subsidiary, UB-Ross-Youngs, who apart from the brands Ross and Youngs use McVities and Mama `Mia--and one or two others--in the U.K. Similarly another U.K.-based enterprise, Rank Hovis McDougal, use the brands Sharwoods (Indian specialities), Tiffany's (pies), Heinzel (cakes) and have now begun to use Mr Kipling, a brand they have made famous in the ambient cake sector, for a new range of frozen `hot puddings.'

One does wonder what strategy these two major food groups will adopt in preparation for the SEM.

On the other hand the Campbell Soup Company have given some sign as to their intention because having bought the U.K.-based Freshbake Foods, one of the top three or four domestic frozen food companies, they have renamed themselves in Europe: Campbell's Foods. Campbell's were already using the brands Ungers in the U.K., and Groko on the Continent, but this writer imagines it is going to be Campbell's on everything from now on.

At least Sara Lee and McCain's have a one brand strategy for Europe. Heinz have, more recently, entered the European QFF scene with a heavily supported launch of their Weight Watchers brand--of course they use the Ore-Ida brand on potato products in the States. Then there remains the mystery as to what the frozen food marketing future holds for the Pillsbury and Kraft companies under new managements. Pillsbury had just given up using the Fiesta brand in the U.K. to concentrate on Green Giant, and may continue to do so in Europe. Meanwhile, Kraft's new owners, the Philip Morris Group, also own General Foods but the Birds Eye brand cannot be used by them within the Common Market -- it's Unilever's! As for Kraft -- they have, for the past two or three years, been using the Kraft brand on their limited frozen food entry, instead of "Brains," the company they bought and whose leading product was "faggots" -- a very English product!

By the way, it is not only brand names that seem to get on a "merry go round." It also happens to senior executives very often these days as one takeover follows another. For instance that very professional executive, Phil Smith, was heir apparent to the top post at General Foods when Philip Morris bought that company. He moved on, after a short while, to become chairman of Pillsbury. Now, at the time of this writing, it looks as if Grand Metropolitan are going to buy Pillsbury. And just before Smith accepted the Pillsbury chairmanship he had turned down the presidency of the Campbell Soup Company. So making a choice of company can be just as difficult as making a choice of brand! Or, "does the man maketh the brand or the brand maketh the man?"

Watch Continental Firms

So far the focus has been on the likely future strategies of U.K. companies, or U.S.A. companies with European interests, but there are some well established Continental frozen food concerns who will not wish to be left behind when the trade barriers come down. It may be recalled that a special market report in this magazine's July edition referred to the "obvious confidence and optimism for the future and to the preparations being made for 1992." In West Germany Unilever's Iglo brand has seen some stern competition from the Frosta label, but this writer knows that his old colleagues, Werner Kook and Leo Lakke, the respective chairman and marketing director of Langnese-Iglo, are very experienced professionals who will be tough competition for all comers.

Furthermore, the distribution network in that country is not one that will make it easy for newcomers. The French frozen food industry association recently claimed that in 1987 its national per capita consumption at last rivaled the West German figure. It certainly has been very remarkable the way the French industry has progressed despite all the negative predictions only a few years back. The existence of strong multiple grocery chains, with a great number of really large stores, has given France a very different distribution pattern than that of other Continental countries and may attract importers.

Belgium may offer a similar attraction but what will matter most in that country and in neighbouring Holland is just how well their QFF processors manage to sell into the rest of the Common Market. They have performed well up to now, especially with French fries. What happens in Italy is anyone's guess, and presumably the same comment could be applied to Spain, the other large population grouping.

Whatever happens it will be a fact that Western Europe will at last rival the U.S.A. as a major frozen food market, but the differences will remain, especially in respect of the very varied eating habits of the diverse nations in Western Europe. The present trends--on both sides of the Atlantic--towards superior product quality, more convenient packaging and the rapid development of microwave opportunities, will continue. But at present in Europe very few frozen food items have universal appeal: frozen potato chips and what else? For instance, green peas are the leading frozen green vegetable item in some countries such as the U.K., France and Italy, whereas spinach is the favourite in Austria and West Germany. Readers in the U.S.A. will readily appreciate the need to understand regional tastes in food even in a country speaking more or less the same language from coast to coast! On this side of the Atlantic there is no common language, and not likely to be one. Such rules out any common advertising campaigns -- from space or anywhere else!

Prime Minister Margaret Thatcher has been criticised in many quarters for stating that there will never be a United States of Europe to the point where national traditions, or ties, are unimportant. Certainly within any democratically organised "bloc" there has to be room for real commercial competition and this is the way the Common Market frozen food business will prosper. This is not to suggest that there will not be many wise reasons for harmony within the industry to ensure the most effective communication to consumers of the advantage of frozen foods compared with ambient, chilled or even some fresh foods.

One final thought about 1992. It just happens to be also the year when the next Olympic Games are held, in Barcelona, and a President will be elected in the U.S.A. So maybe the interest in the "Single European Market" is greater now than it will be then!
COPYRIGHT 1989 E.W. Williams Publications, Inc.
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Author:Webb, Kenneth J.B.
Publication:Quick Frozen Foods International
Date:Jan 1, 1989
Previous Article:High margins lead to new directions for Britain's freezer centre sector.
Next Article:Pemford: Nielsen provides research tool that captures 70% of British FF market.

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