Critical Analysis of Birds Eye

Critical Analysis of Birds Eye

In the case “Birds Eye looks to bring excitement to frozen food as it celebrates Fish Fingers’ 60th anniversary”, the author discusses that Birds Eye, a leading brand in the frozen food category, has decided to focus on innovation to respond to the continuously falling sales in the sector. Specifically, Birds Eye id determined to focus on quality improvement and product innovation for its historically best sellers, such as Fish Fingers. Furthermore, Birds Eye intends to go after the new markets of focusing on adults, innovating a more diverse range of ready meal, and focusing on sustainability. The case has presented various aspects of the business situation and the opportunity and threat. These points will be discussed below and alternatives will be proposed.

In terms of business environment, the macro environment is overall unfriendly to Birds Eye. First, demographic features changed over the past few decades to not favour the whole-dish frozen food. As families are getting smaller and the marriage age continues to be postponed, a large dish of Fish Fingers is simply too much for an individual that lives alone. For a brand that used to focus on providing ready meal for the family (Roderick, 2015), Birds Eye’s product size is too big for such individuals. Second, the social and cultural forces are also unfavourable for Birds Eye. The current social trend of ready meal is typically compartmentalised meals, such as the various meal deals offered in supermarkets. When people can get a nutritionally well-around meal at a low budget, fewer and fewer people would opt for a frozen food meal with a single dish. Also, consumers today prefer freshly prepared food over frozen food due to the current social trend of promoting healthy food. Third, the political and legal forces are also making business increasingly difficult for the frozen food sector. After the horsemeat scandal, governments have tightened supervision over the food authenticity and quality of frozen food (BBC, 2013). Though Birds Eye enjoys good brand reputation (Roderick, 2015), a stricter control over the supply chain is needed for Birds Eye to avoid future legal speculation and possible lawsuits. The micro business environment, in contrast, is much more promising. As Birds Eye enjoys a staggering 28 per cent market share in the frozen food market (Thomas, 2013), it has established market dominance in the industry, and therefore would have more bargaining power over suppliers. Also, the dominance creates considerable entry barrier for competitors.  Furthermore, as Birds Eye was not affected by the horsemeat scandal and maintains a good public image, consumer relationship is sound.

Faced with such an environment, the opportunity lies ahead for Birds Eye is leverage its good reputation accumulated over decades and its experience and market leadership in the frozen food sector to innovate and further dominate the market. For a large company with an annual revenue of $181 million (NASDAQ, 2015), Birds Eye has sufficient capital to invest in R&D and marketing, which could translate into enhanced customer satisfaction and increased sales. However, the threat is that whether Birds Eye would be able to transform and improve its products to fit the demographic, social and legal trend. For example, if Birds Eye could not enrich its product diversity and make products in sizes that suit individuals, it might very well lose the market share.

To deal with the opportunities and threats, three alternatives can be proposed. First, Birds Eye could consider inventing new products such as compartmentalised best sellers (such as Fish Fingers and peas together) that come in small packages for 1 person. In addition to the traditional provision of large-size single dish products, Birds Eye could introduce the above new products to enter the market of providing food for adults instead of families, which is consistent with its current new strategy. Furthermore, by enriching the diversity of each package, Birds Eye can claim that the new products are more nutritionally balanced and cater to the trend of health food. Second, Birds Eye could invest more in branding and marketing efforts that aim to rebrand it as a food brand that cares for every single person instead of just for families. Traditionally, Birds Eye is regarded as a brand for family, which has excluded many alone individuals from the market. Therefore, Birds Eye needs to re-establish its brand image and cater to this rapidly growing group. Third, Birds Eye could further its sustainability efforts to cut down costs to counter the decreasing profits for frozen food industry in recent years. Generating over 130,000 tons of food and packaging annually (Ecosurety, 2014), Birds Eye could potentially save a lot of costs through recycling of raw materials, such as used cooking oil that can be turned into biodiesel. Since the market of frozen food is not so promising, Birds Eye can think of such ways to reduce costs to maintain a satisfactory profit margin.