Birds Eye Frozen Foods

Case Study
GROUP 1

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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 modernisation
program amounted to some 20 million.
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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