- Private equity firm Kohlberg & Company acquired Tyson Foods’ frozen bakery business — including Sara Lee, Van’s, Chef Pierre and Bistro Collection brands — for an undisclosed amount, Food Business News reports. The new business will include all four brands and be called Sara Lee Frozen Bakery.
- The company plans to build a new R&D facility and test kitchen, including a pilot plant, the story says. Sara Lee Frozen Bakery's new headquarters will be in Chicago suburb Oakbrook Terrace, Illinois. The company will continue operations at two manufacturing sites in Traverse City, Michigan, and Tarboro, North Carolina. The business will employ about 1,300 workers, adding about 60 to 80 administrative jobs, according to the Chicago Tribune.
- “Tyson Foods did a great job with this portfolio of businesses, but their primary focus was on protein,” Craig Bahner, chief executive officer of Sara Lee Frozen Bakery, told Food Business News. “Moving the frozen bakery products into a standalone company concentrated in the frozen bakery business will enable us to continue delivering quality products while accelerating growth, increasing innovation and achieving operational excellence.” Bahner was previously president of U.S. Morning Foods at the Kellogg Co., and before that was chief marketing officer at Wendy’s Co. He will be joined by president and head of sales Don Davis, who was most recently senior vice-president of sales for Tyson Foodservice.
Tyson Foods’ move to sell off its frozen bakery business to focus on protein comes as no surprise, but it will be interesting to see whether Kohlberg and the new management team can revive Sara Lee and other frozen bakery products. Although the investment firm doesn’t have an extensive history with food companies, it does focus on North American middle market manufacturing companies, which could make it a good fit for the new frozen bakery company.
The assembled management team also seems encouraging. Bahner is familiar with food manufacturing — and breakfast foods in particular, which could come in handy in R&D for Van’s line of gluten-free items.
The company has made another smart move by bringing on C.J. Fraleigh, who joins Kohlberg & Co. as executive chairman as the transaction closes. He is a longtime consumer products executive who at one time was chief executive officer of Sara Lee North America.
“We are thrilled to have the opportunity to breathe new life into this outstanding portfolio of brands,” Fraleigh told Food Business News. “We have assembled an exceptional management team, and our partners at Kohlberg have a long track record of success in carve outs and reemerging businesses. Together we will accelerate Sara Lee Frozen Bakery’s growth.”
Innovations certainly are needed if the company is to thrive. Executives might do well to take notes from the makeover of Green Giant, which B&G acquired in 2015. Initially, the plan was to buy just the brand's canned lines. But as the company learned more about the opportunities in frozen vegetables, B&G decided to take a leap and enter the frozen food business. B&G added 25 frozen vegetable SKUs in 2016, including riced veggies, veggie tots, mashed cauliflower and roasted vegetables. And the new efforts, coupled with the convenience of frozen vegetables, have paid off. According to RBC Capital Markets, the beginning of 2018 saw 1% volume growth in the frozen category — the first time it's been up in five years.
Today’s consumers are looking for the convenience frozen foods provide. They also are interested in indulgence, which bodes well for the new company. Younger buyers often turn to brands they remember from their childhoods, and Sara Lee is practically synonymous with frozen baked goods. The brand was too far removed from Tyson's core business area for that company to give it much attention. Whether Kohlberg can turn around the stagnant brand may depend on its ability to create fresh flavors and products.