Simplot Australia has announced it will leave the frozen meals category - which includes the Lean Cuisine brand - and is considering closing its Pakenham meal manufacturing facility.
Simplot entered the meals market in 2009 through a through a combined license and acquisition arrangement with Nestlé Australia. Under the deal, Simplot licensed the frozen meals brand Lean Cuisine and Maggi frozen brand, and acquired the Papa Giuseppi frozen pizza brand and the Pakenham facility near Melbourne.
Products currently manufactured at the Pakenham site include chilled pasta and sauce, potato pommes and frozen meals, and a final decision about the plant closure is due by the end of September.
Simplot said it would be undertaking widespread consultation with its employees and key stakeholders about the proposed closure.
“To ensure customers and consumers experience a smooth transition, we are developing plans to consolidate other Simplot products currently produced at Pakenham into the wider Simplot network,” Simplot Australia managing director Graham Dugdale said.
Simplot said the decision to exit the market, which follows an extensive review, will enable it to concentrate on its core capabilities in potatoes, vegetable, seafood, pasta and sauces. Simplot's other brands include John West, Birds Eye, Edgell, Leggo's, Chiko, I&J and Top Cut.
The decision to exit frozen meals coincides with the end of its long-term manufacturing agreements with Nestlé, which are due to conclude in November 2019, according to Simplot.
“Simplot will then work closely with all stakeholders through what is envisaged to be up to a 12 month transition period,” Dugdale said. “We do not envisage any impact to our current supply and trading relationships.”
Nestlé has also announced it is now seeking new options for Lean Cuisine in Australia following Simplot's decision.
Nestlé said the pair had committed to work closely together to ensure consumers and customers “experience a smooth and seamless transition to continue Lean Cuisine’s successful journey to provide solutions for healthy living”.
Last year, Simplot quietly closed its a new gourmet frozen meals delivery brand Dish'd, which it launched in 2014. A note on its website said: “Many challenges in the world of online food delivery remain unsolved, and we failed to create a sustainable platform for delivering you delicious dishes from around the word. For this, we’re deeply sorry. We considered every option before making the difficult decision to end the products and services that brought us together.”
Market researcher IBISWorld recently wrote that the push into prepared meals by Australia’s major supermarkets with their own private label products was putting pressure on revenues in the growing category.
While consumer demand for products in this category has increased over the past five years, industry operators have found it difficult to compete with similar products launched by Coles and Woolworths that have much lower prices and more favourable shelf space, IBISWorld said.
