GrandMet to sell off national food brands in Europe

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LONDON -- Grand Metropolitan, the international alcoholic drinks and foods marketer, intends to sell off its national food brands in Europe and focus on strengthening the European presence of its international brands Pillsbury, Green Giant, Haagen-Dazs and Old El Paso.

GrandMet announced September 5 that it's selling Erasco, the market leader in canned ready meals and soups in Germany, to U.S.-based Campbell Soup Company for approximately $210m. Heinz is also thought to have been interested in the company. Erasco had annual sales last year of approximately $225m. Erasco soup and ready meal brands include Erasco, Jokisch and Jurgen Langbein. FCB Hamburg handles the Erasco account. The Erasco business was founded in 1872 and acquired by Pillsbury in 1962, which GrandMet in turn bought in 1989.

GrandMet also said that it will consider offering for sale its remaining national food business in the U.K. and continental Europe. "We've sold one and the others are in the shop window," says GrandMet spokesman Neil Garnett. The national brands to be sold include premium cakes and cookies.

GrandMet will concentrate its efforts on international brands that hold No. 1 or No. 2 market positions. These brands will be developed under a simplified business structure with a "much-reduced" cost base. The additional national brands GrandMet would like to sell had combined sales last year of $555m with an operating profit of $15m.

The businesses on the auction block are: Shippams, meat and pastry brand Peter's Savoury Products, Memory Lane Cakes and Fleur de Lys in the U.K.; the ready frozen meal brand for the catering market Hofmann-Menu and Goldstein in Germany; Brossard in France and Italy; Suzy and Desobry in Belgium and Driehoek in the Netherlands.

Starting October 1, GrandMet Foods Europe will be renamed Pillsbury Europe and its headquarters will be relocated from Paris to Uxbridge in the U.K. The current international brands sales functions in the U.K., France, Spain and Germany will be retained.

In late 1991 GrandMet attempted to transform French cake brand Brossard into a major pan-European brand with a large $12m pan-European campaign, but the effort never achieved GrandMet ambitions. GrandMet's strategy at the time was to acquire small national cake brands and rebrand them under the Brossard banner.

Copyright September 1996, Crain Communications Inc.

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