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Nomad Foods is now Europe's leading marketer of frozen foods, operating across Europe under three separate brands: Birds Eye (in the UK & Ireland), Iglo (in most of continental Europe) and Findus (also now across mainland Europe). The bulk of the business was originally owned by Unilever, but sold to private equity fund Permira in 2006. Under the new name Iglo Group, it was put up for sale again in 2012 but no buyer was found. A deal was finally secured in 2015 with newly created Nomad Foods, which subsequently acquired the Findus brand in several markets where it wasn't already part of Iglo. Birds Eye was a pioneer in establishing the UK market for frozen food during the 1950s, and was extended to Europe at the end of that decade under the name Iglo. Together they are one of Europe's best-known food businesses, encompassing a wide range of frozen vegetables, fish and poultry. (The Birds Eye brands in the US and Australia are entirely separate).
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5 New Square
Feltham, Middlesex TW14 8HA
Tel: 44 (0)20 8918 3200
Nomad Foods is the biggest marketer of frozen foods in Europe with operations in 15 countries across the region, bringing together what were previously two rival businesses. Currently, it has almost 14% combined share of the local frozen foods market, well ahead of rivals Dr Oetker (under 6%), Nestle (4%), McCain (3%) and Young's of the UK (1%).
Originally it was private equity investor Permira that inherited Unilever's position as the leading frozen foods marketer in Europe in 2006, as a result of its acquisition of the Bird's Eye brand in the UK and Iglo in most other European markets for £1.9bn including debt. The only one of its frozen foods brands Unilever retained at the time of the Birds Eye Iglo sale was Findus in Italy. At the time, Findus was not only Unilever's biggest business in Italy, but it was also largely responsible for developing the technology used for frozen meals marketed in the US under the Lipton name. In other European markets, Findus was then owned by another UK-based private equity group CapVest. It was acquired by Lion Capital in 2008 for £1.1bn.
Unilever finally put Findus Italy business up for sale at the end of 2009. It was acquired the following summer by Birds Eye Iglo for a total consideration of €850m in debt and equity. The enlarged business then changed its name to Iglo Group in summer 2011. In 2012, Permira put the combined business up for sale once more but no suitable buyer was found at the required €2.8bn price tag. Instead, Permira added more debt to to the group in order to fund a €250m dividend payout for itself. After several years seeking an exit route, Permira was finally able to structure a deal in April 2015 with newly created Nomad Foods, controlled by US investors and entrepreneurs Martin Franklin and Noam Gottesman. They acquired Iglo for €2.6bn.
Soon afterwards, Nomad agreed a separate deal to buy its main rival in continental Europe, Findus Group, for £500m in cash and shares. The new purchase, which closed in Nov 2015, added subsidiaries in Scandinavia, France, Spain and Belgium to Nomad's footprint, as well as all European rights to the Findus brand, and sister businesses Lutosa of Belgium and La Cocinera of Spain. The deal did not include Findus's UK operations, including Young's seafood, which were retained by Lion Capital.
In 2018, the group announced plans to move into pizzas for the first time with the acquisition of the Goodfellas and San Marco brands from 2 Sisters Food Group. Deal price was €225m. Goodfellas and San Marco are the #2 and #4 frozen pizza brands in the UK, behind Dr Oetker's Chicago Town and Ristorante brands respectively.
Though its appeal has waned a little over the past two decades, Birds Eye remains one of the UK's single biggest umbrella food brands, with combined sales of £470m in 2017 (IRI, year to Mar 2018, quoted in The Grocer), equivalent to around 27% of the branded UK frozen meals market, excluding ice cream. (Only private label is bigger). In fact, the company is generally credited with introducing the concept of frozen meals to the UK, and its brands were an integral part of almost every British child's diet from the 1960s to the 1980s. More recently, however, the availability and growing popularity of high quality fresh foods began to undermine the status of the brand in many households, while competition for its remaining audience increased with the emergence of more aggressive rivals. Nevertheless, Birds Eye remains the overall top-selling frozen foods brand, and its awareness among consumers is exceptionally high at 99%.
There are now three main meal ranges: vegetables and side-dishes; fish and chicken. Other meats, such as beef, have been phased out in almost all markets other than for burgers. First introduced in 1960, Birds Eye Burgers wholly dominated the market until the arrival of fast-food restaurants in the 1970s. However, the group has steadily been concentrating its focus on the poultry market and other meats were gradually phased out in the early 2010s. That left Iglo in a stronger position than some private label manufacturers in 2013 as the European horsemeat contamination crisis persuaded many customers to steer away from potentially adulterated beef meals.
The fish range is led by Birds Eye Fish Fingers, first introduced in 1955. Initially Birds Eye sold herring fillets, but a cod version was introduced in 1955 and proved far more popular. Lovable pirate Captain Birds Eye has been the popular face of Fish Fingers and other kids' food products since 1967. According to one story, actor John Hewer was actually a Birds Eye post-room employee who wandered on-set during the making of the commercial and was thought to look more like an old sea dog than the actor originally hired. Hewer was retired in 1996 after almost 30 years in the job because the traditional Captain Birds Eye was considered old-fashioned. He was replaced by a rugged Action Man-style hero, but this image failed to catch on in the UK, and the old sea-dog image was resurrected in 2002. The rugged Action Man lives on in Europe.
Menu Masters, launched in 1982, were the UK's first frozen ready-meals. However since the 1990s, the company has been eliminating this and its other sub-brands in order to focus on the main Birds Eye umbrella. A new range was launched in 2004 under the Birds Eye SteamFresh umbrella. Originally a staple in every home, sales of the company's frozen vegetables range have dwindled as a result of the increasing popularity of fresh produce, as well as competition from private label brands. However Birds Eye Peas continue to hold a special place in the nation's affections, consumed by around 1.7m people every day. They were among the company's earliest products, introduced in 1946. In 1970, they featured in the UK's first ever colour television commercial in the UK, and they still have around 40% of the UK's frozen pea market.
Despite its heritage in the UK, Birds Eye has come under intense pressure from competitors, especially in the fish segment. The brand suffered a substantial psychological blow in 2008 when it was overtaken as the top-selling frozen fish brand by Young's, which captured the attention of consumers with microwaveable crisp fish fingers and cook-in-the-bag fillets. The company fought back with more adventurous meal concepts.
Following several further overhauls, the Birds Eye and Iglo ranges now fall into four categories. Coated fish and chicken products are sold under the WholeGrain banner; SteamFresh is the banner for frozen vegetables, pasta and rice side-dishes; Stir Your Senses offers various pasta or rice based meals; while Inspirations is the umbrella for a variety of slightly more adventurous fish and chicken meals.
The Birds Eye brand is also marketed in Ireland, and a similar or identical range of frozen foods marketed under the Iglo name is the local market leader in Austria, Germany, Russia and Portugal, the #2 in the Netherlands and Ireland, and is also present in France. The business established a presence in Hungary and Romania for the first time during 2008 through distribution partners, in Turkey and Russia in 2009 and in Greece in 2010. The range varies as well according to local tastes, but most have retained the Captain Birds Eye brand mascot, known in these territories as Captain (or Capitain or Kapt'n) Iglo. The addition of Findus Italy brought the group a new level of expertise in frozen prepared meals, for example in the pasta sector, and these are gradually being introduced into other markets.
Reflecting the state of the frozen foods sector as a whole - mature at best - Iglo's sales remained flat between 2007 and 2009 in a narrow range between €1.07bn and €1.09bn. A part-year contribution from Findus lifted the total for 2010 to €1.2bn. The full-year contribution in 2011 lifted the total to €1.57m. Operating profits were €246m. However that deal also added to the company's already considerable debt, generating finance costs of €323m during the year. That resulted in a net loss of €82m.
For 2012, revenues slipped back by 2% to €1.54bn, but operating profit increased to €268m. Finance and related costs of €302m resulted in a net loss of €78m. Net debt has steadily increased since the acquisition by Permira. It was €1.63bn at the end of 2012, higher than net sales for the first time in the company's history. The 2013 refinancing increased it to just under €2bn. At the end of that year the company requested a relaxation of loan covenants from its bankers to ease performance and allow for further expansion.
Revenues for 2014 slipped 2% to €1.47bn. EBITDA was €306m. In the UK alone, revenues fell 5% to £446m, and pretax profits plunged 26% to £63m.
Combined proforma sales for 2015 including a full year contribution from the former Findus Group subsidiaries are around €2.1bn.
Until recently, the UK Birds Eye brand shared the same logo as Birds Eye Foods of the US, but the two have had no other connection since the late 1930s. The US company was acquired by Pinnacle Foods in 2009. It is the top-selling branded frozen vegetable range but #3 in multiserve frozen dinners behind Nestle and Unilever. A third Birds Eye business operates in Australia under the control of food giant Simplot.
Martin Glenn, former head of Walkers and PepsiCo UK, was appointed as CEO of Iglo Group following the original private equity buyout. He announced his resignation at the beginning of 2013, and was eventually replaced by Elio Leoni Sceti, former CEO of EMI Music. Leoni Sceti departed following the sale to Nomad, though he will remain a non-executive director. His successor was named as Stefan Descheemaeker, who joined from retailer Delhaize. Nomad's founding investors Martin Franklin and Noam Gottseman jointly succeed Erhard Schoewel as non-executive chairman.
Other senior executives include Tania Howarth (COO), Wayne Hudson (managing director, Birds Eye UK & Ireland), Achim Eichenlaub (managing director, Iglo Europe) and Francesco Fattori (managing director, Findus Italy). Marketers include Steve Challouma (marketing director, UK), Daniel Fonseca (European category director), Roberto Bellinzona (European category director), Tania Zarraluqui (European senior brand manager) and Marie-Eve Poget (European senior brand manager).
Birds Eye Foods was originally formed by field naturalist Clarence Birdseye, who discovered a new way of preserving food almost by accident while on a US government survey of the Arctic in 1916. He found that the method used by Inuit Eskimos of leaving fish to freeze rapidly in the open air on blocks of ice avoided the formation of damaging ice crystals. As a result the food retained its freshness when thawed, even when it had been frozen for several months. Birdseye developed a system to replicate the same conditions for mass-production and founded the Birds Eye Seafood Corporation in 1922, more or less inventing the global frozen food industry. In 1929, Birds Eye became part of what was later to become General Foods (later still to become Kraft), and launched in the UK in 1938 as Frosted Foods. Production was suspended almost immediately as a result of World War II, but began again in 1945 when Unilever, which already owned the Batchelor's packaged foods business, acquired a controlling share in Frosted Foods and UK rights to the Birds Eye brand and trademark.
At a time when fresh food was still in very short supply throughout Europe, the benefits of quick-frozen vegetables and meat were clear. However Unilever was faced with the daunting task of persuading retailers to invest in refrigerated cabinets suitable for stocking its products. It got around this by lending the freezer units to shops in return for higher sales margins. It launched its assault on the British public by investing heavily in advertising through the exciting new medium of television. The breakthrough came with the launch of Fish Fingers in 1955, so popular that by the end of the decade, Unilever's Birds Eye Walls operating company sold around 10% of all the fish eaten in Britain.
Towards the end of the 1940s, Unilever had also attempted to establish a frozen foods business in the Netherlands. Under the terms of its partnership with General Foods in the UK, it was unable to use the Birds Eye freezing process in mainland Europe, so resorted to technology developed in Germany during the war. This proved unsatisfactory - the quality of the frozen product was noticeably poorer than in the UK, and distribution problems far greater. (Unilever introduced Birds Eye in Australia as well but with little success - it was later sold). In 1956, Unilever bought out General Foods in the UK, which gave it the ability to introduce the Birds Eye process in Europe. The same year it established a partnership with a distribution company in Belgium that was to form the basis of Iglo.
However Unilever also faced competition in this sector for the first time. The Findus frozen fish company was first launched in Sweden after World War II, and developed a following in other Scandinavian countries and also subsequently the UK. The business was acquired in 1962 by fast-expanding Swiss giant Nestlé, who also rolled out the brand in other European markets. After several years of intense competition, Unilever and Nestlé agreed to join forces in 1969. Their respective frozen foods businesses in Germany, Austria and Italy were merged in a joint venture controlled by Unilever. The Findus brand was withdrawn from German-speaking markets, replaced by Iglo, but retained in Italy. Over the following years Nestlé introduced Findus as a competitor to Iglo and Birds Eye in other markets, including the UK, but kept its 25% shareholding in the German, Austrian and Italian businesses until 1985, when it sold those shares back to Unilever. (Nestlé sold its remaining Findus operating units in 1999 to Scandinavian fund EQT; they were acquired by CapVest in 2006, and sold on to Lion Capital two years later).
By the early 1980s, sales of frozen foods had begun a slow but steady decline, dented by wider availability of fresh foods and a growing belief among consumers that frozen foods were inferior to fresh produce. Unilever attempted a number of strategies designed to bolster sales. In 1982, the company launched what were among the first ready-made frozen meals in the UK with the Menu Masters sub-brand, but this business was eventually phased out under intense competition from cheaper private label supermarket products. In 2001, the company launched a new range of high quality frozen meals in the UK under the Enjoy brand, backed by a major marketing spend. It was the biggest ever new product launch in the history of UK grocery retailing. However the range failed to achieve the anticipated success, and was gradually withdrawn between 2002 and 2004.
In 2006, with sales of frozen foods still in decline, the group confirmed that it was seeking a buyer for the Birds Eye and Iglo brands, although it kept hold of Findus in Italy. The business was acquired by private equity fund Permira.
Last full revision 19th January 2016
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