The Successful History
At the end of 1970s, although Birds Eye was still remarked as the sort of dominant company in frozen foods industry, its market share had shrunk from 62% in 1966 to 29% in 1978. In addition, the outbreak of a price war between supermarket in 1977 pressured Birds Eye to give higher discounts and promotional allowances, further cutting Birds Eye’s profit margin. Birds Eyes, the leading player in UK frozen food industry, passed its peak time.
Established in 1938, Birds Eye had dominated Britain frozen food industry for decades. The main reasons for its success could be concluded as quality controlling, technology innovation, and vertical integration. As early as in 1950s, the frozen food market was totally undeveloped, where the raw material suppliers, distributors and retail stores were unsophisticated. It was Birds Eye that brought innovation and influence to the industry. In raw material market, in order to guarantee the high quality of the food, Birds Eye fully controlled the process from production to delivery. By providing harvesting equipment to farmers, setting up factories nearby the sites, and investing in SPD(Speey Prompt Delivery) system, Birds Eye made sure that the food could be harvested, frozen and delivered in the shortest time. In the distribution, viewing the shortage of refrigerators in retail stores, Birds Eye broken the rule of offering refrigerators but persuaded two manufactures to produce “open top”display cabinets and sought business with retailers that installed such cabinets. In that case, Birds Eye was naturally to be an integrated company since it had the both the capabilities and resources to manage the entire supply chain. Therefore, Birds Eye gained tremendous success from 1950s to the mid 1970s.
However, in the 1970s, the landscape was changed, Birds Eye’s dominance and profit were challenged by new trends