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Thoughts on Mother Nature, quality, Young's fresh approach, and own label.

Author Mark Twain wrote that everybody talks about the weather, but nobody does anything about it. Well the weather in the United Kingdom during the middle months of this year was certainly not to the liking of many, and added to the woes of the continued economic recession.

There were varying effects on the frozen food market. May and early June did bring some sunny days and some above normal sales for the ice cream companies. The same high temperatures meant that the pea season was the earliest ever. But then July's heavier than average rainfall saturated the ground so much as to keep the heavy vining machines idle. On at least three different occasions harvesting teams were forced to interrupt their usual military precision-like operations, and the picking went on until mid-August.

Nonetheless, Colin Wright, the Birds Eye agricultural manager, was confident that the 1992 harvest will have produced peas of high quality and a yield only just below that company's plan.

Although peas are not nearly as important to the overall results of the more "generalized" companies as they were in the 1960s, the crop certainly is crucial to those private label packers who have agreed to pretty tightly controlled contracts with the large multiples. Despite all the imaginative vegetable product developments that have begun to flood onto the market, the standard packs of green peas still dominate this sector. And the vegetable sector itself -- helped by the huge amount of space given to greens by the larger stores -- remains in second place behind the ready meals category.

Of course quality is a vital ingredient in the presentation of frozen peas, and always has been. More and more it is the key to success in other sectors that were perhaps once too dependent on "novelty." This is especially true of ready meals, no matter whether the marketing emphasis is on convenience or healthy eating. And as such products which often sell on impulse were very stunted by the recession, manufacturers have taken time and care to seek product improvements and to recommit themselves to "top quality." Shoppers have re-learned the habit of looking for real value for money. At the price some of the meals sell for, consumers demand satisfaction both in portion quantity and taste. And these days they are perfectly willing to do without too much "elaboration" in product makeup.

This writer was fascinated to read in the July edition of Quick Frozen Foods International that Heinz has introduced a range of Smart Ones under its Weight Watchers label with the claim that the items contain only "one gram of fat or less." It seems that the standard Weight Watchers entrees average about five grams of fat, and the healthy food marketers -- who used to feature low calories -- have apparently now chosen to emphasize low fat as a selling point. What can possibly follow that?

But the question remains: How many discerning consumers are going to put "low fat" ahead of taste? Even Brian Ruter, president of the Heinz Weight Watchers Food unit, has reportedly admitted to a potential problem. "The taste trade-off would be too severe if the decision had simply been to cut back the existing fat in the Weight Watchers line," he said.

Rather dramatic moves such as this are bound to be made in highly competitive environments as the USA healthy food market, and it is very possible that similar efforts to "steal a march" may be seen in the UK and elsewhere. It does seem that the efforts by ConAgra to improve market share by instigating a price war did not work with its Healthy Choice range. In contrast, Campbell reformulated the Le Menu line to taste better, an approach that certainly coincides with this writer's view as to what the average customer (the volume consumer) prefers.

Quality as USP

Quality, the Underestimated USP is the theme for this October's Marketing Society Conference in London. For the uninitiated, USP stands for unique selling point. Speakers will be describing how their companies have applied "quality" as the USP to provide a competitive edge and, of course, the Japanese approach will be presented.

There is now a British Standard for quality management systems (BS 5750). This is regarded not only as an essential element for forward-looking companies, but as an established reassurance for customers. The international equivalent of BS 5750 is ISO 9000, and organizations from over 50 countries are working to this standard.

By the way, the EC is beginning to worry many of the healthy food claimants across Europe with proposed restrictions on the use of the "health food" description. Certainly consumers do not need to be offered much more clarity as to just how totally healthy some items really are. Often there has been far too much "looseness" in the use of descriptive words or claims which can only relate to certain elements in the product.

Seafood Scene

Speciality seafoods is a sector which has sometimes been criticized for using less than accurate descriptions, and one has to believe that overall sales have suffered as a result. This is a pity because the freezing process can present some excellent items.

Young's has always been a respected name in the speciality seafood market, both in the UK and around the world. However, its image in recent years has been rather "swamped" by the all-encompassing Ross Young's identity. Now it has been decided that the Ross brand will target the value-for-money quality end of the market, while the Young's label will focus on premium quality seafood. A three-year development program is under way, with the first move accounting for only about 9% of the |pounds~568 million seafood market. It appears that "own label" items take 50-60% of the speciality seafood market in the UK. Young's is in second place, boasting the leading brand share of 20%.

Own Label Gains

Not only in speciality seafoods are the supermarket labels on the increase across Europe, according to findings from Europanel, a Taylor Nelson AGB company. It has put out a study suggesting that even in countries where the retail sector is fragmented, and no particular chain dominates, store brands have rocketed in popularity since the 1980s.

The report further indicates that behind this store interest in own labels is the need to improve margins to cover increased distribution costs at a time when there is a stagnation of consumption and an intensification of competition. Europanel's read of own label shares across Europe is interesting. In Britain store brands claim 30%, excluding alcohol, toiletries and fresh food. However, in Italy it is only 5-6%, and in Germany (if one excludes the unique Aldi business which has about 60% of the market), the figure is 5%. In France 20% was the own label share of the grocery market in 1990.

One wonders what variations there would be in a "quality audit" taken across the same countries. Perhaps further increases in own label's share will feature more "bargain buys" as chains compete on price before service or quality.
COPYRIGHT 1992 E.W. Williams Publications, Inc.
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Title Annotation:frozen foods market
Author:Webb, Kenneth J.B.
Publication:Quick Frozen Foods International
Date:Oct 1, 1992
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