Simplot enters the ready meals market in Australia
Simplot Australia announced today it is to enter the Australasian ready meals market through a combined license and acquisition arrangement with Nestlé Australia.
Simplot Australia will licence the leading frozen meals brand Lean Cuisine and Maggi frozen brand, acquire the Papa Giuseppi frozen pizza brand and the manufacturing facility at Pakenham, near Melbourne.
The Pakenham factory will become the cornerstone manufacturing facility for a meals centre of excellence, operating as Gippsland Food Company. The agreement becomes effective on 30th November, 2009.
Gippsland Food Company will operate as a stand alone business with the aim of becoming the leading supplier to the Australasian ready meals market.
Employees at the Pakenham factory will work for Gippsland Food Company and will continue to manufacture Lean Cuisine and Maggi frozen food products as well as Papa Giuseppi frozen pizzas.
Under the licensing agreement for Lean Cuisine and Maggi frozen foods Simplot Australia will acquire the right to manufacture, market and sell the products throughout Australia and New Zealand.
For Simplot Australia this represents a significant step towards achieving its growth strategy, said Terry O'Brien, Managing Director, Simplot Australia.
"Our strategy is based around building leading brands through superior product offering, innovation and exceptional service. Another key growth platform has been acquiring assets and brands that are a sound strategic fit and benefit from the company's capabilities and capacity," Mr O'Brien said.
"We are a leading player in the frozen vegetables, potatoes and seafood categories through our Birds Eye and I&J brands. The license agreement and relationship with Nestlé is extremely exciting for us as it will add tremendous value to our existing frozen foods expertise. Moving into ready meals is a logical extension of our offer and we are delighted to have the Lean Cuisine and Papa Giuseppi Brand within our portfolio. The establishment of a stand alone meals centre of excellence, Gippsland Food Company, will deliver a better consumer offer and drive market efficiencies," he said.
Mr Graham Campbell, Managing Director, Nestlé Australia Ltd said the agreement, which was similar to other arrangements entered into by Nestlé in both Australia and internationally, made business sense for both parties enabling each of them to concentrate on and pursue their respective areas of strength.
"This represents a great opportunity to grow the Lean Cuisine brand, which is recognised as a leading brand in Nestlé's global nutrition health and wellness portfolio. We look forward to further developing what has become a significant brand within the Healthy Frozen Food sector here in Australia and we are confident that Papa Giuseppi and the balance of Pakenham's portfolio will contribute strongly to the success of Gippsland Food Company.
"We are especially pleased that employees at Pakenham will be moving across to Gippsland Food Company. The outcome is a win for both companies, our employees at Pakenham and the local Pakenham community," he said.
Melbourne-based Simplot Australia is a wholly owned subsidiary of the J R Simplot Company, a privately held food and agribusiness corporation based in Boise, Idaho. Simplot has sales per annum in excess of AUD 7.5 billion. Simplot Australia was established in 1995 and has grown to become one of the biggest consumer food businesses in Australia with leading brands such as John West, Birds Eye, Edgell, Leggo's, Chiko, I&J and Top Cut.
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