Upheaval in frozen foods continued this week, with Premier putting its loss-making RHM frozen foods business up for sale and the Heinz frozen desserts business also on the block.
The RHM frozen business is a £55m operation, comprising ready meals such as Sharwood's and Bisto, McDougalls pies and both Cadbury and own-label desserts. But profits in the past two years have slumped under pressure from the multiples. With four factories in Gillingham (pies), Bexhill (ready-meals), Doncaster (ready-meals) and Flint (frozen desserts), the sale is being handled by corporate finance boutique Spayne Lindsay. It is not known whether the operations will be sold piecemeal or as a single entity, but it is though that both trade buyers and private equity players may look to restructure.
Heinz, meanwhile, is reviewing its 700-employee own-label branded desserts businesses - including Ross, American Dream and Devonshire desserts - based at Leamington Spa and Okehampton. John Garnett, MD of Heinz European Frozen & Chilled Foods, said the company was looking to focus on leading brands, including WeightWatchers desserts and Aunt Bessie's.
Several large frozen foods businesses have gone under the hammer in the past year. Unilever sold its frozen foods division to the private equity firm Permira in November 2006 for £1.2bn. In March 2006, the Heinz European seafood and frozen businesses were sold to private equity firm Lehman Brothers for £290m.