Birds Eye Frozen Foods Case Study

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HISTORY

Started by Robert Ducas, chairman of a Kent engineering company, Winget Ltd. in August 1938. Owned by General Foods Corp., Robert Ducas, and Chivers and Sons Ltd (a British canner and Jam-maker). In March 1943 Unilever acquired Birds Eye Foods. Throughout the 1950s and 1960s, Birds Eye accounted for over 60 percent of UK frozen food sales on a tonnage basis.
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KEY ISSUES

Decline began in the 1970s Birds Eyes market dominance existed primarily in sales of small retail packs to independent grocers and to a lesser extent, supermarkets. In home freezer centers its share was around 8 percent (1974) In catering sector, Birds Eyes market share was about 10 percent (1973) Widened product range and increased range of market segments posed major difficulties for Birds Eyes marketing strategy and the allocation of its advertising budget.
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Cont

Between 1977 and 1980 expenditure on its program amounted to some 20 million.

modernisation

In the face of rising competition, (King Harry Foods in 1970, White House Foods Ltd. and Fife Growers Ltd in 1971, and Wold Growers Ltd in 1974), Birds Eye maintained its advertising budget during the mid-1970s while cutting prices on some major-selling products

Higher Sales, profit margins halved 1976, the company barely broke even and in 1977 it registered a post - tax loss.
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STRATEGY

Selling to private labels: They had gained market share of 21% in 1978. Reduce product lines: concentrate on profitable product lines and promote higher margin products. Maintain brand: Focusing on high quality products. Decrease vertical integration: Transaction costs are lower if supply is outsourced. Focus on developing short term and long term partnerships.
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IMPLEMENTATION

Prior to divesting infrastructure, replacement must be able to meet quality standards set by Birds Eye. Strict oversight and co-ordination of activities done by supplier; ensuring no loss in quality. Reinvest savings to marketing and branding of products. Regain lost market share and profit margins.
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h T u o y

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