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Global Retail: Shaking up the aisles
Frozen fish comes to the fore when the chips are down
By Jason Holland
July 01, 2012
Recession is good news for the frozen food category — the tougher the economy gets, the more consumers turn their backs on fresh products in favor of comparably cheaper frozen foods.
In an economically weakened Europe, food producers have responded well to the needs of families looking for more cost-effective ways to keep everyone fed. In many cases, this has required the expansion of frozen product ranges or the creation of completely new lines.
The result is that while fresh is still considered the best option by most European consumers, particularly in markets like Spain, France and Italy, frozen isn’t the ugly stepchild any more. The German and Russian markets rely heavily on frozen fish and this is increasingly becoming the case in the United Kingdom.
The benefits of frozen are well documented, from shelf life and convenience to retaining nutritional contents and reducing food waste, but far and away the biggest asset that frozen has is its affordability — it invariably offers shoppers value for their money.
Research by TheNewIceAge.com confirms that U.K. shoppers switching to frozen food can save around 34 percent on their weekly groceries. This analysis, compiled by the Centre for Food Innovation at Sheffield Hallam University, shows a basket of frozen groceries bought for a family of four including seafood products like salmon, costs on average just £15.45 (€19.33, $24.20) compared to the same items bought fresh at £23.25 (€29.09, $26.41). This represents a saving of £405.60 (€507.44, $635.21) per year.
Despite 2011 being a tough year for the U.K. food industry, as a direct result of the population’s shrinking disposable income, the frozen food retail market increased in value by 5.2 percent. According to Kantar Worldpanel, the value of the total U.K. frozen market is just under £5.4 billion (€6.7 billion, $8.4 billion) per year, up from its valuation at the end of 2006 of £4.4 billion (€5.5 billion, $6.8 billion). And frozen seafood products are riding this wave, increasing in value from £580 million (€724.6 million, $900.3 million) to about £760 million (€949.6, million, $1.2 billion) over the same period.
Brian Young, director general of the British Frozen Food Federation (BFFF), says that frozen fish is outperforming the overall frozen market.
As well as the relative affordability of frozen fish products, these increases can be partly attributed to new product development and broader offerings from retailers and brands.
Birds Eye, a name synonymous with frozen food — selling around 185 million of its iconic cod and haddock fish fingers to the U.K. market — continues to lead from the front. Last year, the company added new products to its successful Bake to Perfection line, comprising fish in a straight-to-the-oven baking bag. Its latest concept is a Fish Fusions range, which comprises lightly coated Alaska pollock infused with different flavor combinations: Lemon & Black Pepper, Garlic & Herb and Lime & Chili.
The expanded range aims to offer more inspiration for mid-week mealtimes and to also “inject some variety into the coated fish sector,” according to Birds Eye.
The 74-year-old company says recent research it conducted shows that while consumers still love traditional classic fish coatings of breadcrumbs or batter, they’re often looking for something more special or slightly different.
The report, Changing Plates, which Birds Eye produced in collaboration with the University of Oxford to look into family mealtime eating habits, confirms the recession has changed the way that Brits shop.
“The equivalent of 5 million people have started buying more frozen food in the last six to 12 months, with more than half (58 percent) saying that saving money is the main motivation, with reducing waste (36 percent) and saving time (36 percent) also cited as key factors,” says the report.
Fish is equally as important for parent company Iglo Group. Last year, the company recorded its most successful 12 months of trading yet, with net sales growth in all three of its business units — Birds Eye, Iglo and new Italian business Findus. Overall, the group’s EBITDA (earnings before interest, tax, depreciation and amortization) grew 7 percent last year to €325.8 million ($407.8 million).
“New product development was a key growth driver in 2011. We have created new categories and have now entered the broader seafood category,” says Chief Executive Martin Glenn, who also reveals the fish category has grown the most in the first-quarter of this year in terms of market share.
The frozen category is not just benefiting from the consumer perception of fresh being more expensive, but also from the weakening of the out-of-home dining sector. According to Birds Eye’s report, 38 percent of the people who were surveyed said they were eating out less as a result of the economic climate. Birds Eye also confirms it has seen strong sales of foods that help families “make the most of nights in.”
Iglo’s closest rival is the Lion Capital-owned Findus Group (not to be confused with Iglo’s Italian business), which in the United Kingdom owns Young’s Seafood Ltd., comprising the three entities of The Seafood Co., Findus U.K. and the 200-year-old Young’s Seafood. This £600 million (€750.6 million, $939.7 million) turnover business has also leapt on the demand for higher-end frozen products.
In May, for example, Young’s launched its Gastro range of restaurant-quality frozen fish dishes, created by Serge Nollent, the company’s development chef.
Gastro comprises seven different products, available in supermarkets at an affordable £3.99 (€4.99, $6.25) each, including Florentine Crusted Alaskan Pollock Fillets and Crispy Lemon & Herb Tempura Battered Basa Fillets.
“We’ve created the Gastro range for people with busy lives who want to enjoy something different and special in the week, without the stress. The recipes are the type you’d find on a restaurant menu. It is gourmet fish, made easy,” says Nollent.
Young’s Gastro line follows on the heels of its Jamie Oliver Keep it Simple range, which saw the U.K. celebrity chef create a frozen line that endeavors to use sustainable, underutilized species such as North Sea whiting, Marine Stewardship Council-certified Alaska pollock and salmon rather than cod and haddock. As the branding suggests, the products are pitched at a lower price than the Gastro range. The 12 products developed by Jamie Oliver consist of pies, fish cakes and fish fingers.
On launching the range in August last year, Oliver remarked: “There might be people saying ‘Why has Jamie gone into frozen?’”
More likely, people were saying that Oliver had made another shrewd business move.
In shaking up the frozen fish category, brands and retailers are fast wearing away the old consumer mindset that frozen is an inferior product and big brands and retailers have seen to it that there’s now equally as much variety in the frozen aisle as there is in the chilled cabinet.
BFFF’s Young says that fish is the only sector of U.K. frozen to have two heavyweight brands, Young’s and Birds Eye, fighting it out toe-to-toe with venture capitalists supporting both, and both looking to increase sales to maximize their growth.
“Both businesses have been very active in terms of new products. They have been successful in both product and packaging, and both have done some important things from a marketing perspective,” he says.
“I also believe there’s a more ambitious offering of fish species than perhaps there was five years ago and I fully expect that to continue. And I think that as long as we, as an industry, continue to be innovative, the category will continue to grow.”
Contributing Editor Jason Holland lives in London