Ahold Food Production
Sales of the Ahold Food Production group increased by 9.1% to Dfl 522 million. Oper
ating results declined slightly, but remained satisfactory. The chief cause of this
decline lay in the increased raw-material prices. In the context of the European co
operative agreements mentioned earlier, initial discussions have been held between
Ahold, Argyll and Casino about the possibility of cooperating in certain areas of food
production.
Sales of Marvelo, the food production and packaging company for a number of private
AH labels, leveled off in 1989 after several years of strong increases. This stabilization
was largely attributable to increased competition from national premium brands. In this
situation it was impossible to entirely pass on higher raw-material prices to the
consumer. Nevertheless, operating results equaled those of 1988.
In the fall of 1989 Marvelo, in cooperation with Albert Heijn revamped the entire
coffee assortment. In 1990 special attention will be given to revitalizing other product
groups.
At the processed meat company, Meester, operating results declined considerably from
the peak levels of 1988, due to the sharp rise in raw-material prices. As usual in such
cii cumstances, the increases could only gradually be passed on to the consumer. In
addition, unseasonable winter and summer weather adversely affected Meester sales.
Despite these negative influences, sales almost equaled those of 1988. This was chiefly
attributable to the success of low-oxygen wrapped meat products which were
introduced nationally. The new packaging method has proved to be very popular and
has already largely replaced traditional vacuum packaging.
Nistria, a producer of dietary meat products, was also faced with higher raw-material
pi ices. It nonetheless achieved satisfactory sales, largely due to close cooperation with
Grootverbruik Ahold. Through this collaboration, Nistria's dietary products achieved a
larger market among hospitals and nursing homes.
Albro Bakkerijen Zwanenburg managed to match the positive results of 1988, despite a
further narrowing of its margins. This was made possible by a rise in productivity. In the
past few years volume growth has chiefly been powered by increasing sales of deep-
fiozen oven-ready baked goods for use in in-store bakeries. Sales volume growth in this
product group led Albro to build a new facility for deep-frozen dough at the Zwanen
burg site which opened on schedule in September and has fully met expectations.
As expected, VACO, a supplier of sous-vide' (vacuum-wrapped) prepared meals, consid
erably improved its sales both to other Ahold subsidiaries and to third parties. As a
result, its losses during the start-up phase have remained limited. In the year under
review, a start was made with the development of a line of single portion meals. VACO
hopes to begin supplying supermarkets in the course of 1990 with 'sous-vide' meals in
consumer retail packaging.
In 1989, the sherry bodegas of Luis Paez in Jerez, Spain (a 50% subsidiary) managed to
once again improve their operating results despite almost unaltered sales.
Expectations are that operating results of Ahold Food Production in 1990 will increase.
24
Meester managed to
maintain its sales under
difficult conditions,
thanks to the successful
introduction of low-
oxygen wrapped meat
products. Managing
Director Aad Elshor.
'The consumer, who was
tired of vacuum pack
aging, has recognized
the advantages of the
low-oxygen wrapping.
The image of freshness
is better than with the
vacuum method, the
meat looks better and
the slices don't stick
together; it is a valuable
alternative to buying
meat from the service
department. Since the
introduction, sales have
risen by more than
20%. In view of this
great popularity, I am
convinced that the low-
oxygen wrapped meat
products are going to
be Meester's leading
product group.
(I to r) Herschell Morningstar
(Executive Vice President),
Bob Samuels and Joe Harber
(Executive Vice President)
