food

Sale Fits Sara Lee's Foodservice Strategy

Sara Lee foodservice logoRichelieu Foods Inc.'s acquisition of the sauces and dressings portion of the Sara Lee Foodservice division represents a significant business expansion opportunity for Richelieu and a continuation of Sara Lee's existing foodservice business strategy, according to the companies.

The sale, which does not affect Sara Lee Corp.'s retail sauces and dressings products, fits into the company's long-term strategy for improving the performance of its foodservice division by focusing on product lines in which the division has a strategic competitive advantage, according to Sara Lee spokesperson Mike Cummins.

The foodservice division, which had net sales of $2.2 billion in fiscal '07, supplies restaurants, retail establishments, schools, convenience stores, health care facilities, hospitality venues and other foodservice operations with brands that include Douwe Egberts, Superior Coffee, Pickwick Tea, Sara Lee and Chef Pierre bakery products, and Sara Lee, Jimmy Dean, Ball Park and Hillshire Farm meats.

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Randolph, Mass.-based Richelieu, with annual sales of about $200 million, is a leading manufacturer in the private-label food industry focused on the frozen pizza, salad dressing and deli salad product categories.

With the deal, whose terms were not disclosed, Richelieu acquired "pourable" products that include pancake syrup and barbeque sauces, as well as salad dressings and marinades, plus the Elk Grove Village, Ill.-based facility where these are manufactured for foodservice customers.

"Up to now, the pourable portion of our business has been mainly limited to retail-style packaging, such as 16-ounce plastic bottles, for private label," explains Henk Hartong, chairman of Richelieu Foods and managing partner in Brynwood Partners, a private equity fund that acquired a majority interest in Richelieu in 2005.

Owning the former Sara Lee plant and sauces/dressings line gives Richelieu the ability to manufacture packages ranging in size from large gallon containers to individual portion-control packets. This positions the company both to significantly expand its business with existing private-label retail customers and to penetrate the institutional foodservice business by looking to service former Sara Lee customers, Hartong says.

As part of the deal, Richelieu also becomes a manufacturer for the Sara Lee Foodservice DSD Coffee network, which will continue to supply its small-restaurant customers with sauce and dressing products supplied by Richelieu.

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