Corporate Profiles - 2020 - 108

COMPANY OVERVIEW

TreeHouse Foods, Inc.
Streamlining remains a key priority for private label manufacturer
reeHouse Foods, Inc. continued to refocus
its operations in 2020, reorganizing its
three business units into two and selling
two of its in-store bakery facilities.
The company's Baked Goods, Beverages
and Meal Solutions divisions in the first quarter
became two units: Snacking & Beverages and
Meal Preparation.
The Snacking & Beverages unit includes bars,
broth, candy, cookies and crackers, griddle, pita,
powdered and liquid beverages, pretzels, tea and
other blends. The businesses generated $1.7 billion in sales in 2019. The division now is focused
on revenue growth, research and development
and commercialization.
The Meal Preparation division includes bouillon, cheese and pudding, hot cereal, non-dairy
creamer, pasta and dry dinners, pickles, pourable
and spoonable dressings, preserves, red sauces,
refrigerated dough, sauces, single-serve coffee
and syrup. The business had $2.6 billion in sales
in 2019 and now is focused on productivity, efficiency and cash flow.
"The retail grocery landscape continues to
evolve and be very competitive, and our customers are looking to solve two fundamentally different goals," said Steven T. Oakland, president
and chief executive officer of TreeHouse Foods.

T

"First, to help demonstrate value to the consumer and improve margins that they can invest to
drive consumer traffic; and second, to help introduce uniqueness and innovation, so they can
differentiate themselves and be more relevant to
their distinct shopper base."
The reshuffling was part of a years-long
streamlining strategy that also has included divestments. The in-store bakery facilities were sold
in April with locations in Fridley, Minn., and Lodi,
Calif., to Rich Products Corp., Buffalo, NY.
"The sale of the Fridley and Lodi facilities allows us to sharpen our focus at TreeHouse," Mr.
Oakland said. "We continue to be committed to
delivering great customer service within the instore bakery category through our frosted sugar
cookies and Lofthouse branded business."
TreeHouse in January terminated its agreement to sell its ready-to-eat cereal business
to St. Louis-based Post Holdings, Inc. after the
Federal Trade Commission filed an administrative

complaint challenging the proposed $110 million transaction. The company said it will begin
the process of remarketing the business.
TreeHouse's Snacking & Beverages and Meal
Preparation units both benefited from increased
sales as consumers stockpiled groceries in the
spring and early summer, but the coronavirus
(COVID-19) pandemic also posed numerous
challenges, most notably the starting and stopping of manufacturing plants. The intermittent
shutdowns lowered service rates, with dry dinners, creamers and pretzels most impacted by
production disruptions.
Private label also lost share during the peak
pantry-stocking period as branded manufacturers were able to adjust shelf sets with higherdemand products faster than private label companies.
Consumers were slower to adopt recessionary
spending habits due to government-issued stimulus payments, Mr. Oakland said, but the company still expects to benefit from an economic
downturn resulting from the pandemic.
"It's hard to forecast anything but a recessionary tailwind for private label," Mr. Oakland
said during an Aug. 6 earnings call with analysts.
"I would argue that it's only a matter of time before we see the consequences of these trends." CP

Chief executive officer -
Steven T. Oakland

TreeHouse Foods net
income (loss)
-$64

TreeHouse Foods share price
$60

-$361

$53
in millions

in millions

-$280

TreeHouse Foods net sales

$46
$4,853

$4,588

$4,289

$39
$32

2017

108 \ October 2020

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Milling & Baking News * Food Business News * Baking & Snack * Meat+Poultry * Pet Food Processing

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Corporate Profiles



Corporate Profiles - 2020

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