Milling & Baking News Corporate Profiles - November 2013 - (Page 103)

Hillshire Brands Co. Company turns its attention to innovation and cost reduction C hange defines the experiences of Hillshire Brands Co. executives during 2013. One year removed from its spin-off from Sara Lee Corp., the company has been working to establish a foundation focused on innovation, marketing and productivity. During fiscal 2013, ended June 29, Hillshire Brands had sales of $3,920 million and a net income of $184 million, equal to $1.50 per share on the common stock. The results were favorable to the company's adjusted results in fiscal 2012 when it recorded a loss of $20 million and had sales of $3,958 million. With a portfolio of brands that include Aidells, Ball Park, Gallo, Hillshire Farm, Jimmy Dean and State Fair, the company has been working to build its presence in the frozen food aisle and on the shopping lists of consumers. The company also has a food service business unit that sells products under the Sara Lee and Chef Pierre brands. Seventy-four per cent of sales are generated from retail, and 26% are from food service. Branded products make up 89% of company revenues. Hillshire Brands increased its marketing spend during fiscal 2013 to 4.4% of revenues. In the past the company has averaged marketing spend of 3.5% of revenues, but it now has a goal of increasing its marketing budget to 5% of revenues by fiscal 2015. The key beneficiary was the Jimmy Dean brand in 2013. During 2013 Hillshire Brands generated 11% of its revenue from new product innovation. The company has set a goal to generate between 13% and 15% of its annual revenue from innovation by fiscal 2015. New products that achieved success during the year included an expanded line of Jimmy Dean Delights and flatbread sandwiches and Ball Park Flame Grilled frozen burgers. One effort that did not achieve success during the year was the introduction of the company's Hillshire Farm packaged lunch meat in a new packaging format. The new packaging did not resonate with consumers, and the company was forced to troubleshoot the Chief executive officer - issue and develop a solution. In August, the company said one of the problems was a clear lid used to highlight the product inside the package. While consumers said they preferred the clear lid, Hillshire Brands executives felt the product lost its visual impact on store shelves and made a switch to a red lid. Cost savings are also a priority for management. During fiscal 2013 Hillshire Brands recorded $40 million in cost savings and is on track to achieve $145 million in savings by fiscal 2016. In September, the company acquired Golden Island Jerky, Rancho Cucamonga, Calif. Sean Connolly, president and chief executive officer of Hillshire Brands, said the acquisition extends the company's reach into the "attractive dried meat snacks category." Goals Mr. Connolly has set for the company during fiscal 2014 include the introduction of line extensions to the Jimmy Dean, Sara Lee and Aidells brands as well as in its food service business. The company will also work to build its presence in the value channel. CP Top brands - Ball Park Hillshire Farm Jimmy Dean Sara Lee State Fair Fiscal year 2013 global sales - Sean Connolly Corporate Profiles $3.9 billion Milling & Baking News * Food Business News * Baking & Snack * Meat & Poultry November 2013 / 103

Table of Contents for the Digital Edition of Milling & Baking News Corporate Profiles - November 2013

Milling & Baking News Corporate Profiles - November 2013