The launch of the number one fish and seafood company? Or a confusing retrenchment that has left buyers scratching their heads? Richard Ford reports
‘The launch of the UK’s number one fish and seafood business’.
The press release that popped into The Grocer’s inbox this week certainly sounded impressive.
With claims of 3,200 people being employed across 13 sites, a projected turnover of £600m and responsibility for providing one out of every three fish meals eaten by UK consumers, it has all the hallmarks of a big deal.
The news behind the headline seems rather more mundane. Young’s Seafood, The Seafood Company and Findus UK & Ireland are to be brought together under one virtual roof, to become known collectively as Young’s Seafood Ltd. The consumer brands, Findus and Young’s, however, will continue to feature in UK chiller cabinets as if nothing had happened.
So what is the point of this renaming exercise, and how will it help address the recent problems that have plagued Findus Group?
In February 2010, The Grocer asked Martin Glenn, then chief executive of Birds Eye, what he thought of Findus UK’s pledge to become the nation’s number one frozen food brand in five years. His reaction? “Talk is cheap.”
In the course of the past year, nobody could accuse Findus of failing to take action. A new Findus UK MD, CSR director, director of UK category management, commercial director, chief information officer and two redundancy consultations prove as much. The company itself claims the new structure will give it greater clout within the industry by having “one voice with retailers, one voice in the supply chain and one voice in the debate on fish sustainability”. Meanwhile, retailers will benefit from a “total category approach” from the newly created Young’s Seafood Ltd, promises Leendert van Hollander, formerly MD of Findus Group UK & Ireland and now CEO of the group.
In addition, a Fish and Seafood Centre of Excellence the details of which are still being worked out will unite the company’s currently disparate expertise by providing a “creative environment” for NPD. Young’s Seafood Ltd will be headed up by den Hollander, with Pete Ward former The Seafood Company MD becoming chief operating officer, and Louise Patterson, currently in charge of Findus Group’s UK HR operations, becoming HR director of the new company.
Young’s Seafood Ltd itself is reluctant to either quantify the impact of the reorganisation on the business or explain exactly why it was needed. What is clear, though, is that a clear roadmap was long overdue following a number of major blows suffered by Findus Group over the past year.
In July last year, Findus missed out on the opportunity to acquire the rights to the Findus brand in Italy, which was instead swallowed up by Young’s biggest rival, Birds Eye. In October, Young’s accounts revealed the company had sustained a £23.4m pre-tax loss for the 15 months to 31 December 2009, although it claimed the figures did not accurately reflect its performance, citing the complex financial and legal organisational structure of Findus Group. In 2010, sales in Young’s frozen division have fallen 7.1% to £173.4m, while Birds Eye frozen fish sales fell 2.4% to £170.7m.
And last month, The Grocer revealed Young’s had lost a supply contract with Sainsbury’s on several lines. As a Sainsbury’s spokesman put it: “We are making changes to our supply base that will enable us to continue to provide our customers with great food at fair prices, trade more efficiently and offer improved choice.”
Although Findus would not confirm whether the launch of a consultation last month over 84 job losses at its Humberstone Road site in Grimsby was a direct result of the loss of the Sainsbury’s business, it is not difficult to see why Young’s and Findus would be keen on a makeover and a fresh start.
Indeed, the move appears to be just as much if not more about image than cost savings or operational efficiencies. Although den Hollander says the creation of the new company will “accelerate growth by drawing on our scale, heritage and efficiency”, it is hard to see how it will deliver. From a cost perspective, Findus Group already operates a joint buying policy and there is no suggestion that buying and marketing teams will be merged to bring greater efficiencies. And from a consumer perspective, although Findus UK will now fall under the Young’s Seafood Ltd umbrella, Findus will remain a consumer-facing brand in the UK.
One senior industry executive believes the move is nothing more than “a reversal of a decision they made a few years ago” the splitting up of the chilled and frozen business of Young’s and Findus in January 2008 by CapVest, to form Young’s which set out to be the number one supplier in frozen fish and The Seafood Company, which set out to be the equivalent in chilled. “I think it’s been done probably for internal reasons and that’s primarily driven by cost.”
Other industry observers have taken the more cynical view that the move is more about Young’s fronting up to Birds Eye. “I think it’s purely a message to Birds Eye ‘hey, we’re better than you’. It’s all about ‘we want to be seen as forward-thinking and go-ahead’ and that’s also why it’s moving its corporate team out of Grimsby.”
Then there’s the fact non-fish Findus products will now fall under the remit of Young’s Seafood Ltd not a particularly intuitive match. “Buyers will now be going to Young’s for crispy pancakes,” as the industry executive points out.
Indeed, buyers are struggling to judge what impact the creation of the company will have for those managing the retail seafood category on the ground. “I don’t know what it means, but I hope it will mean they’ll be a little slicker, as, in the past decision making could take a little while for them,” says one supermarket buyer. He predicts the move will be of greater benefit to retail senior management in terms of providing a ‘one-stop shop’, but says it is unlikely to offer much to buyers given that the chilled and frozen teams operate entirely separately traditionally, chilled buyers would speak to The Seafood Company and frozen buyers would contact Young’s.
That said, the formation of the new company doesn’t look like a problem, either, he says. “To be fair, they seem to be taking a tack-change and moving more in the right direction and working with us collaboratively.”
Whether the move will ultimately live up to the press release’s promise of giving Young’s Seafood Ltd “an even more dynamic way of working and competitive advantage by leveraging our collective, unrivalled expertise in fish” and be “recognised as the best fish and seafood company by our consumers, our customers, and our stakeholders” remains to be seen.
The future will all depend on whether den Hollander can walk the walk. As Glenn warned, without substance to back it up, “talk is cheap.”
July 2008 Lion Capital buys Foodvest, parent company of Young’s and The Seafood Company, for £1.1bn
May 2009 Foodvest renamed Findus Group. Per Harkjaer leaves Foodvest over “differing perspectives”. Chris Britton appointed CEO of Findus Group
July 2010 Birds Eye secures the rights to Findus brand in Italy
September 2010 Mark Escolme, MD of Findus UK & Ireland, quits after less than a year in the post
October 2010 Leendert van Hollander appointed MD of Findus UK & Ireland
November 2010 Findus Group announces London relocation of marketing and commercial arms
January 2011 Findus Group adjusts capacity at Humberstone Road site in Grimsby