Sara Lee not spinning off meat business
June 15, 2011
by Bryan Salvage
DOWNERS GROVE, Ill. – On June 14, Sara Lee Corp. Executive Chairman Jan Bennink said at the Deutsche Bank Global Consumer Conference in Paris, France, that a decision had been made for Sara Lee to spin off its International Coffee and Tea business instead of its North American (meat, foodservice and frozen dessert) business, which includes meat products under the Ball Park, Hillshire Farm, Jimmy Dean and Sara Lee brands.
Bennink and CEO Marcel Smits provided an update on June 14 on its separation into two publicly-traded, pure-play companies. The separation is progressing well, with key work underway to realize cost-saving opportunities and address new company structures, they noted.
“The two companies haven’t changed since our original Jan. 28 announcement,” a Sara Lee spokesman told MEATPOULTRY.com. “One is Sara Lee, which will consist of our North American Retail [Jimmy Dean, Ball Park, Hillshire Farm, Sara Lee Frozen Desserts] and North American Foodservice [minus the North American Beverage business]. The other is what we’re calling “CoffeeCo,” which will consist of the International Coffee and Tea business plus the North American Foodservice beverage business.”
“This transaction is more than a spin-off of one business segment – we are really separating a global company into two, independent pure-play companies, which adds complexity as well as opportunity,” Bennink said. “As we began to get into the details of separating the two businesses, we determined there are greater efficiencies to be gained from spinning off the International Coffee business.”
Bennink also provided an overview of the company’s International Coffee and Tea business, and discussed plans for future growth.
Discussing Sara Lee’s North American business, Smits focused on how the company will accelerate top-line growth while increasing margins.
“We are continuing to look at price increases to recover our gross margins, but we’re also taking out significant costs from this business,” Smits said. “In addition, we will increase our marketing investment in our core brands, continue to expand from traditional products to premium offerings and focus our innovation efforts on convenience and ‘better for you’ products.”