Pot Noodle still feeling post-Sudan 1 blues, claims Unilever

Unilever is continuing to blame the Sudan 1 illegal food dye scare for lacklustre sales of its Pot Noodle brand, although other products caught up in the February recall do not appear to have suffered similarly long-lasting effects.

The company, which posted strong UK performances from ice cream, PG Tips, Flora pro.activ and Bertolli olive oil, but disappointing sales in its Bird's Eye frozen foods business in the first half of the year, said Pot Noodle sales were still not back at pre-Sudan 1 levels.

A spokesman said: “It was a major food scare and unfortunately, we’ve been a victim of our own success in that Pot Noodle is such a well known brand that it picked up a disproportionate amount of press coverage in the aftermath of the recall and is still paying the price. I think that it shows that things like this do have long term implications for brands.”

However, market researcher ACNielsen, which started monitoring sales in categories caught up in the recall as soon as the scare hit the headlines in mid February, said there was little evidence that the scare had had any long term impact on purchasing behaviour, with affected categories such as Worcester sauce, seafood sauces and Worcester sauce flavour crisps recovering very quickly as press coverage died down.

Although the recent re-launch of Bird’s Eye had helped Unilever increase its market share in frozen ready meals, sales were still very disappointing, said a spokesman. “Our immediate priority is to continue to challenge consumer perceptions that chilled food is somehow superior to frozen. But it’s an uphill struggle, and we are operating in a declining market.”

He declined to comment on whether Unilever was committed to retaining the Bird’s Eye business in the long term, but said the fact that other multinationals such as Heinz were bailing out of the category should “not necessarily be seen as setting a precedent"

Speaking in a conference call after the company’s first half results presentation earlier this month, chief executive Patrick Cescau said that sales in Europe had been flat in the first half, with frozen foods proving particularly disappointing. “Western Europe remains difficult with weak consumer demand and no let up in price competition between retailers. In the current market environment, consumers are shifting towards the commodity end of the [frozen food] market, where we are not represented.”

Group pre-tax profit was down 8% to euro 2.38bn on sales up 1.8% to euro 19.37bn in the six months to June 30. However, second quarter underlying sales were up 3.3% -- Unilever’s best quarterly performance since the fourth quarter of 2002, mainly driven by growth in emerging markets.