Issue Iss3 2010
A lucrative new deal with Burger King (Swiss) has put the spotlight on quality convenience producers, Fredag
Fredag is the largest producer of convenience poultry products in Switzerland, providing a range of high-quality chilled and frozen poultry, vegetarian, meat and seafood products. Established in 1986, the company will be celebrating its 25th anniversary next year.
The company is part of the larger group Orior, which is the largest food producer in Switzerland, and has been stock listed since April 2010. Remo Hansen, CEO of Fredag and a member of Orior’s board of directors, sheds some light on how the group works: “Within Orior there are three segments – refinement which includes all the group’s meat companies, convenience, which includes Fredag and support, which contains the logistic and export departments. Orior has a turnover of more than 500 million Swiss Francs a year.”
Fifteen years ago Fredag launched its first vegetarian product line and is now the largest producer of vegetarian convenience products in Switzerland. Since 1996 the company has also been the country’s sole importer and distributor of Quorn and is one of the largest export markets for Quorn producers, Marlow Foods Ltd.
For the last three years Fredag has been the exclusive producer of burgers for Burger King in Switzerland, a real boost to the company’s profile. Remo highlights why the company gained such a lucrative contract: “They trust our meat traceability system and our ability to source quality meat. We have a long history within the meat producing industry in Switzerland, which we believe adds to our company value.”
The food service industry is Fredag’s main customer base accounting for 60 per cent of its turnover. The other 40 per cent comes from the retail industry. Fredag also exports five per cent of its products to other countries. “We export to Germany, Italy and France – the countries surrounding Switzerland are our focus. We do not export to the UK for instance because the logistic costs are incredibly high,” explains Remo.
He continues with the company’s plans to expand its export market: “We have a long standing relationship with Asia and strongly believe there is a huge potential there for the export of our vegetarian products. We can’t export meat or poultry products out of Switzerland due to the rules regarding duty and import quotas but we feel we have a certain advantage over our competitors regarding vegetarian products.”
Having a strong supply base is essential for any major producer and Fredag is no exception, importing from a number of suppliers globally to meet demand. Remo says: “Switzerland only produces enough poultry to supply 50 per cent of the market, so the rest of the demand has to be met by imports and we are one of the largest poultry importers in the country. We mainly import poultry from South America and South East Asia which we then process in Switzerland into high quality convenience products.”
With strong long-standing relationships with many of its suppliers Fredag demands the highest quality products. “There is a certain level of accreditation that suppliers must comply to for us to use them – either BRC or IFS. This guarantees us quality produce and provides a certain level of traceability, which our clients demand,” adds Remo.
In September 2010 the company launched a range of chicken products for Burger King, a move that has put it in the unique position of being the only producer in the world to supply Burger King with both chicken and meat products. Remo explains how, despite this development, the company’s focus remains on the Swiss market: “Switzerland is a niche market for Burger King, with roughly only 28 outlets in the country. This is ideal for our company size as if we had to supply more than 100 restaurants we would have a capacity problem. Burger King envisages approximately 40 outlets in Switzerland by the end of 2011 which is still a size where we can provide a perfect service.”
Major clients such as Burger King and Nestlé, who Fredag also produce for, mean the company has developed a reputation for outstanding performance. Remo describes how such large clients drive the company further: “Obviously we produce a very good product to be able to supply customers like Burger King and Nestlé. Every year they demand higher levels of quality but we always produce a perfect product and fulfil the toughest of demands from these two big companies.”
In 2008 Fredag started to move into importing seafood from South East Asia and, over two years, has grown to be the number four importer of seafood in Switzerland. It is the company’s goal to become the number two importer within the next three to five years.
Fredag is a member of the Swiss Convenience Food Association (SCFA), a group project for the producers of convenience and frozen products. The SCFA was established in 1944 and offers advice and assistance to members with legal and economic issues. Remo emphasises the benefits of the membership: “We get first hand information regarding new laws and requirements which means we can maintain our high level of service. We also benefit from discussions with other members to see how they operate and tackle certain challenges.”
The impact of the economic downturn has been far-reaching with most markets experiencing cost pressures. “The recession has caused a huge pressure from retailers in regards to prices which is a challenge we have to deal with. The devaluation of the euro is also an issue, as clients are demanding a much higher reduction of prices than we can provide,” says Remo.
Despite the difficult market conditions Fredag sees plenty of opportunities for growth, with plans to acquire a company outside Switzerland in 2011. It is also working to continuously improve the quality of its products.
Looking to the future Remo remains positive: “I think that good, healthy convenience products will have a growth rate of between five and seven per cent in the next three to five years. The industry is improving all the time as is the industrial view of what products should look like, which means we develop products that look and taste more home-made every year. I think in the next three to five years you won’t be able to tell the difference between something which has been cooked by your grandmother and something that has been produced by the industry.”