Birds Eye: Strategy

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case thirteen

Birds Eye and the UK Frozen Food Industry
Robert M. Grant
On February 12, 1946, George Muddiman arrived in Liverpool from Canada to take up the job as first chairman of Birds Eye Foods Ltd. “It was raining,” he recalled. “There were no lights on the streets; it was seven o’clock at night and dark. As I looked out of the cab window my heart went into my boots and I thought, ‘What have I done? Why have I left Canada to come to this?’” By the early 1950s, after a host of problems with production, raw materials, and distribution, Birds Eye was firmly established. In 1952, it opened the “Empire’s largest quick-frozen food factory” in Great Yarmouth and was set to embark upon a period of continuous expansion. By 1964 the food sales for the previous year had grown to £75 million (from a mere £150,000 in 1946), with Birds Eye accounting for 70 percent of the market. However, from the late 1960s both return on capital and market share declined as competition in the market intensified. By the retirement of Birds Eye’s second chairman, James (“Mr Fish Fingers”) Parratt in July 1972, the company’s fortunes had passed their peak and by 1983, Birds Eye’s share of retail frozen food sales had shrunk to 18.5 percent.

■ BEGINNINGS1 ■
Quick-freezing arrests the process of decay in perishable foods and enables fresh foods to be distributed to the consumer, wherever located and at any season. However, the freezing process must be quick to prevent the formation of large ice crystals that damage the cell structure of the food. By the late 1920s General Foods Corporation was successfully manufacturing and marketing “Birds Eye” frozen foods in the United States using the multi-plate quick-freezers developed by Clarence Birdseye. The establishment of Birds Eye frozen foods in the UK was the initiative of Robert Ducas, chairman of a Kent engineering company, Winget Ltd, who had tried frozen foods in the US and was impressed by their British potential. In August 1938 Birds Eye Foods Ltd was incorporated, owned by General Foods Corp., Robert Ducas, and Chivers and Sons Ltd (a British canner and jam-maker). Birds Eye was not alone in pioneering frozen foods in Britain. Commercial quick-freezing had begun in Britain before 1939, initiated by Smedley’s (National Canning). In the early years Smedley’s was better established than Birds Eye. Among other leading firms striving to establish viable frozen food businesses were several distributors and marketers of fish, notably Smethurst Ltd, Mudd and Son, and Associated Fisheries Ltd (through Eskimo Foods Ltd). A cold storage company launched “Fropax” frozen foods and Manuel’s, an importer and wholesaler of frozen foods, obtained the UK concession for importing and distributing Findus frozen foods. By 1942, Unilever had become strongly interested in the Birds Eye business for its value to its subsidiaries Macfisheries (fish), Batchelors Peas (dried peas), and Poulton & Noel, Ltd (poultry). At a meeting of Unilever’s management committee on February 4, 1942, the guidelines for a frozen food business were established.

They expected to see the business develop in three main groups of produce – fruit and vegetables, fish, and meat. They hoped to see Birds Eye companies in operation all over the world, and they expected to get together a team of people who could go wherever they were needed to give help with setting up these new companies. They could see that some of their products were likely to be expensive, and they were not against running luxury lines, but in the true tradition of a business founded on the demand of the mass market for everyday products, they hoped that, in general, the business would be built on the large-scale development of certain main products.2

In March 1943, when World War II was at its height, Unilever acquired Birds Eye Foods. Its task of establishing a frozen food business in the UK was formidable: The costs of quick-freezing are high, and it does not...
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