Milling & Baking News - June 11, 2013 - 15

Business

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new life into the Grocery Products division. Among the strategic changes
Mr. Ettedgui has spearheaded since
being tapped to the post in 2009 is
the development of longer shelf life
products, which Mr. Saputo said “allow us to get into new markets where
we weren’t as cost effective to get into
in the past.”
Mr. Ettedgui also was at the helm
when the company in 2010 reintroduced Vachon mini-cakes in supermarkets in the eastern United States.
Vachon snack cakes previously were
introduced into the United States
but without much success. Vachon
snacks cakes are sold under such
brands as Jos. Louis, May West and
Passion Flake.
The reintroduction has been challenging, though, and Saputo said its
Grocery Products sector in 2014 will
continue to focus on increasing sales
volumes in the snack cake category.
Saputo said the main focus in 2014
will be on developing sales in the
U.S. market.
Elaborating on the effort in the conference call, Mr. Saputo said penetration into the United States has been
good, but slow.
“We’re not looking for any immediate fires that are going to extinguish rapidly,” he said. “We’re looking at those channels of sales where
we cannot only sell once, but have

repeat business. And there are some
key customers that we’re working
with currently and that we have
some potential to work with in the
future. So it will be a slow progress
in the U.S., but it will be a long-term,
sustainable progress.”
Within Canada, Mr. Saputo said the
company believes it should be able to
pick up some of the snack cakes business that belonged to Canada Bread
after the latter’s exit from the Canadian business with the closing of
its Shawinigan, Que., bakery.
Asked by an analyst whether
Canada Bread’s departure has
relieved some of the price pressure in snack cakes, Mr. Saputo
responded, “The pricing pressures, I think, are related to
consumers’ expectations and
less related to the competitive
nature of the business. Vachon
has incredible brands that are
well recognized by some consumers. And it is what it is, but
the consumers expect to pay a certain
price for those categories of product,
irrespective if there are other products
on the shelf. So I think those issues
and challenges with respect to pricing
remain, whether other players are in
or out of the business.
“We’ve got good brands. We have
great products, and we’ve got a lot
more flexibility built into it. And I
think that the margin improvement is
going to come less from pricing, more
from other initiatives within our operational structure.”
Saputo also announced it is changing its reporting segments to more
clearly separate its Canadian, U.S. and
international operations. The Canadian Sector will include the Dairy Division (Canada) and the Bakery Division. The USA Sector will combine the
Cheese Division (USA) and the Dairy
Foods Division (USA). The International Sector will combine the Dairy
Division (Argentina) and the Dairy Ingredients Division, which will include
national and export ingredients sales,
as well as cheese exports from the
North American divisions.
EBITDA in the company’s Grocery Products segment in the fiscal year ended March 31 increased
9% to C$13.9 million ($13.4 million)
from C$12.7 million. Sales rose 2% to
C$137.1 million ($132.5 million) from
C$134 million. MBN

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MONTREAL — Lino Saputo Jr., chief
executive officer and vice-chairman
of Saputo, Inc., sees “a more optimistic future” for the company’s Grocery
Products division due to a number of
strategic initiatives that are bearing
fruit.
In a June 5 conference call with
analysts to discuss fiscal 2013 results,
Mr. Saputo credited Lionel Ettedgui,
president and chief operating officer
of the bakery division, with breathing

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Saputo sets sights on sustainable
snack cake growth

Milling & Baking News June 11, 2013 / 15

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Milling & Baking News - June 11, 2013

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