Ferré & Consulting Blog (English Version)

Sara Lee announced an agreement to sell its fresh bakery businesses in Spain and Portugal to Mexico´s Grupo Bimbo. The agreement includes all Sara Lee fresh bakery brands in Spain and Portugal as well as seven manufacturing facilities.

Sara Lee Corporation  announced an agreement to sell its fresh bakery businesses in Spain and Portugal to Mexico´s Grupo Bimbo  S.A.B. de C.V. for 115 million EUR in cash (about 154 million USD at current exchange rates). The agreement includes all Sara Lee fresh bakery brands in Spain and Portugal as well as seven manufacturing facilities. The transaction, which is subject to customary closing conditions and regulatory clearance, is expected to close within 60 days.

Sara Lee holds the number-one position among branded bakery manufacturers in Spain, with leading brands such as Bimbo, Martinez, Ortiz and Silueta. In fiscal 2011, the business generated net sales of 408 million USD. It employs +/- 2’000 people.

«The move to Grupo Bimbo is a natural next step that can benefit the Sara Lee bakery team and brands in Spain and Portugal, as they would become part of an organization fully dedicated to the bakery category», said Jan Bennink, executive chairman of Sara Lee´s board. «Divesting the bakery businesses allows Sara Lee´s international portfolio to become simpler and more focused on coffee and tea, the categories around which we are building a leading pure-play international company».

Sara Lee´s remaining international bakery businesses headquartered in France and Australia remain the subject of a divestiture process and a strategic review, respectively. These two businesses generated aggregate revenue of approximately 318 million USD in fiscal year 2011, and sell products primarily in France, Sweden, Italy, Australia and New Zealand.

Source: Bakenet.eu

Companies Grupo Bimbo, Sara Lee

Sara Lee Corporation announced that its board of directors has agreed to appoint Jan Bennink, executive chairman of Sara Lee, as the chairman of the board of «CoffeeCo». This appointment will take effect after the planned spin-off in 2012

Bennink, 54, joined Sara Lee in January 2011 and his primary responsibilities are the leadership and implementation of the spin-off, in addition to chairing the board of directors and building and maintaining a senior management team.

«I believe this business and its leading brands have tremendous promise, and by focusing on innovation, marketing and operational efficiencies, we will be successful», said Bennink. «I look forward to continuing to work closely with the CoffeeCo management team and its new leader, Michiel Herkemij, to help this great business reach its full potential», said Bennink.

Bennink has extensive executive leadership experience in the food and beverage and consumer packaged goods industries. Prior to Sara Lee, he served as chief executive officer of Royal Numico and has held key management positions with Groupe Danone, Benckiser GmbH and Procter + Gamble. Bennink previously served on the advisory board of ABN AMRO, as well as on the boards of various global companies, including Kraft Foods. He is currently a director of Coca-Cola Enterprises.

Source: Bakenet

Companies CoffeeCo, Sara Lee

Sara Lee’s board of directors has agreed in principle to divide the company into two separate, publicly traded entities.

The plan presented to the board would spin off Sara Lee’s North American Retail and North American Foodservice businesses (excluding the North American beverage business) into a new public company. That company would retain the “Sara Lee” name. Its leading brands would include Sara Lee, Jimmy Dean, Ball Park, Hillshire Farm, Chef Pierre and State Fair.

The yet to be named second company would consist of Sara Lee’s current International Beverage and Bakery businesses, as well as the North American beverage business. Its leading brands would include Douwe Egberts, Senseo, Pickwick, Maison du Café, L’OR, Café Pilão, Marcilla and Bimbo.

In a press release, Sara Lee stated: “Each company will have leading consumer brands, compelling growth prospects and strong potential to deliver long-term value to shareholders.”

The plan calls for the separation to be completed in early 2012.

Sara Lee also intends to declare a $3.00 per share special dividend on its common stock. The majority of this dividend will be funded with proceeds from the sale of the company’s North American Fresh Bakery business. The board expects to declare and pay the dividend in the 2012 fiscal year, before the spin-off is complete.

“Today’s announcement is a logical step following the divestment of our International Household and Body Care business and the announced sale of our North American Fresh Bakery business,” said James Crown, Sara Lee Corp.’s chairman of the board. “We have carefully considered various strategic alternatives, including unsolicited indications of interest in the company. We believe that the spin-off, plus the one-time special dividend, offers the greatest potential for delivering long-term shareholder value.”

Sara Lee is now working to develop detailed implementation plans for the spin-off and will continue to explore a variety of methods to enhance the efficiencies of the two companies’ operating structures.

The separation will be subject to final approval by the board of directors, other customary approvals and the receipt of an IRS tax ruling.

Source: Bakers Journal

Companies Sara Lee

Mexican bakery giant Grupo Bimbo acquired Sara Lee‘s North American fresh bakery business for $959 million.

Grupo Bimbo was established in Mexico in 1945 by Lorenzo Servitje, Jaime A. Sendra, Jose T. Mata and Jaime Jorba. Today it is one of the most important baking companies in brand and trademark positioning, sales, and production volume around the world.

The bakery sale, expected to close early next year, means Bimbo gets the rights to the iconic Sara Lee name for fresh baked goods in the U.S., although Sara Lee keeps it for its other products, such as frozen desserts and deli meats.

Grupo Bimbo also is the marketer of Thomas’ English Muffins and Entenmann’s cakes.

The sale of the bakery business “was likely difficult for the company to swallow — giving up its namesake brand to another company,” analyst group Stifel Nicolaus wrote in a note to investors. But “this divestiture will be a good one for Sara Lee in the long run.”

The ad agency for Sara Lee bakery brands is Omnicom Group’s TBWA/Chiat/Day, Los Angeles, which also handles Sara Lee brands such as Jimmy Dean, Ballpark and Hillshire Farm. Sara Lee’s measured media spending on its bread and bakery products was $4.1 million in the first six months of the year, which is less than 20% of what it spent on all brands, according to Kantar Media.

Grupo Bimbo uses independent O’Leary and Partners, located in Newport Beach, Calif., as its agency for bread brands.

Bimbo spent $8.8 million marketing its brands in the U.S. in the first half of the year, including $4.8 million on its Arnold brand.

“At this point the relationships with the agencies remain unchanged,” said Sara Lee spokeswoman Alissa Bolton. David Margulies, a spokesman for Grupo Bimbo’s U.S. division, Bimbo Bakeries USA, said that “until the acquisition is approved, there are not going to be any changes other than would happen in the normal course of business.”

For Bimbo, the acquisition will grow its U.S presence from 34 bakeries and more than 7,000 sales routes to 75 bakeries and 13,000 routes, the company said.

The company pledged to invest more than $1 billion in the next five years to create an “efficient manufacturing and service platform.”

Companies baking companies, Grupo Bimbo, Sara Lee

Despite mounting speculation that Sara Lee Corp. is exploring the sale of its fresh baking business, a Wall Street analyst whose comments in May helped spur the speculation warned that “separating the Sara Lee bread brand from Sara Lee Corporation will be messy.”

The analyst, Robert Moskow of Credit Suisse, issued the comments 20 July in the midst of a flurry of press reports stating that Sara Lee has hired an investment banker to explore the possibility of selling the baking unit.

Contacted by Milling & Baking News last week, Sara Lee declined to comment on the reports that it has hired an investment banker or that its baking business is for sale.

“We think this is the right strategic move for Sara Lee,” Moskow said of the possibility the baking business could be on the block. “The bread business is low margin, zero-growth, and running at a competitive disadvantage in our opinion because of its high labor and benefit costs. In addition, bread has its own direct-to-store distribution network, so Sara Lee would not suffer any loss of scale with customers if it disposed of it.

“Separating the Sara Lee bread brand from Sara Lee Corporation will be messy. Sara Lee would have to license the Sara Lee brand to the buyer, and thus lose quite a bit of control over the brand equity. As a result, we think a sale process would take a long time.”

The rush of coverage began last week with a 19 July story in Crain’s Chicago Business stating that Sara Lee was looking for buyers. Other news outlets, including The New York Times, The Wall Street Journal and Bloomberg News followed with stories.

Crain’s and many of the articles last week based their stories on a 25 May investment report from Moskow in which he noted, after a meeting with Sara Lee corporate management, that the baking business was now being led by a turnaround specialist and wondered whether the parent company may be looking to sell the division. Milling & Baking News first covered the 25 May report in a 1 June, Page 1 story (see Milling & Baking News of 1 June, Page 1) that prompted inquiries at Sosland Publishing Co. from certain news outlets, including Crain’s, in the weeks that followed.

While a number of news stories specifically mentioned the largest other U.S. baking companies as potential buyers of the Sara Lee baking business, Wall Street analysts have suggested that finding a strategic buyer could be difficult.

Moskow said that a selling price for the baking business of US$1.5 billion posed by Bloomberg News as a possibility, “sounds too high.”

“Recall that Sara Lee paid $2.8 billion for the bread business in 2001,” Mr. Moskow said. “But sales have fallen to US$2.2 billion since then and EBITDA is only US$150 million. Why would anyone pay 10x EBITDA for this strategically challenged business?

“We believe private equity and Bimbo are the likely targets. We can’t imagine a scenario where Campbell’s Pepperidge Farm would ever consider it.”

Companies baking business, Sara Lee

The European Commission (EC) is reviewing consumer goods giant Unilever’s acquisition of the Personal Care and European Laundry business at Sara Lee.

Under the deal, Unilever will acquire more than 90 different brands from Sara Lee in 19 European countries.

These products include Radox, Brylcreem and Sanex.

However, the EC has said it needs “more time” to consider the full implications of the deal in terms of the competition aspect that could be affected by the takeover.

Unilever has said it “welcomes the opportunity to engage more fully with the commission’s competition authorities”.

Recently, Unilever has announced it is increasing the marketing of a number of the food and beverage products in its range.

It is launching a new innovative sampling campaign for Lipton Fruit and Herb Infusions, which is geared towards women aged between 25 and 35.

In the run-up to the summer, it is also set to give a major advertising boost to its ice cream Cornetto.

Cornetto is left lagging behind its sister brand Magnum in terms of sales, which has persuaded Unilever to increase Cornetto marketing, Marketing Week reported.

Companies European Commission, Sara Lee, Unilever

First Nationally Distributed Bread of Its Kind Provides New Way to Incorporate DHA-Omega 3 into Children’s Diets

Sara Lee North American Fresh Bakery today announced the expansion of its successful Soft & Smooth bread line with the introduction of its new Sara Lee® Soft & Smooth Plus breads Made with DHA Omega-3. Based on a growing body of scientific evidence, docosahexaenoic acid (DHA) Omega-3 helps to support healthy brain development1. Sara Lee Soft & Smooth Plus breads provide moms with a nutritious and simple means to ensure their children continue to receive the benefits of DHA Omega-3, together with other sources of DHA in their the diet, beyond infant formula and jarred baby food.

“While moms recognize that DHA Omega-3 is important to their child’s diet, it can be difficult to incorporate, especially with picky eaters who turn their nose at one of the most common sources – fish,” said Dr. Alanna Levine, Fellow of the American Academy of Pediatrics and parenting-expert. “If parents can add small portions of DHA into their child’s diet from a variety of sources – especially in something as palatable as a mild, soft-textured bread – it’s easy for their child to get the daily nutrition they need.”

Available in 100% Whole Wheat and Made with Whole Grain White, Sara Lee Soft & Smooth Plus Made with DHA Omega-3 breads are the first nationally distributed breads of its kind in the United States. The new breads provide moms an option for their little ones that contains a portion of their daily recommended whole grain intake along with the mild taste and soft texture inherent in the Sara Lee Soft & Smooth line, now with DHA Omega-3. life’sDHA™, the algae-based ingredient that provides Sara Lee Soft & Smooth Plus bread with DHA Omega-3 nutrient, is produced by Martek Biosciences Corporation (Martek).

“We understand the need to ensure proper nutrition through all stages of life especially in younger children,” said Tim Zimmer, vice president, Sara Lee North American Fresh Bakery. “Bread with DHA Omega-3 is an excellent and simple way to provide moms with a great-tasting, nutritious option their little ones will love.”

Both varieties of Sara Lee Soft & Smooth Plus Made with DHA Omega-3 breads contain 12 mg of DHA Omega-3 per two-slice serving, which is at least 10 percent of the Institute of Medicine’s suggested daily amount for kids, depending on age, ranging from 1-13 years old2. Years of research show a role for DHA in the normal development and functioning of the brain1, especially in supporting healthy brain development during those early years when it makes a difference.

“Martek continually aims to provide resources to companies like Sara Lee so together we can promote health and wellness throughout all stages of life,” said David Abramson, president of Martek Biosciences Corporation. “Combining our life’sDHA with the Soft & Smooth product is a natural partnership.”

About DHA Omega-3/life’sDHA™

DHA Omega-3 is a long-chain Omega-3 fatty acid that serves as a primary building block for the brain and the eyes and supports brain, eye and heart health. Scientific reviews highlight the importance of DHA Omega-3 in proper brain and eye development and function, as well as its importance in cardiovascular health. Yet despite its importance, most consumers do not get enough DHA in their diets.

Fish are often incorrectly thought to be the only source of DHA Omega-3. However, life’sDHA™ offers a trusted, vegetarian form of DHA. Fish are sources of DHA because of the DHA-rich microalgae in their food chain; life’sDHA is derived directly from microalgae, a renewable, sustainable source of DHA that does not deplete ocean resources.

Companies bread, DHA Omega-3, omega 3, Sara Lee