Bosses at Sara Lee have promised to deliver “major innovations” in coffee and meat products next year as they try to seize back the initiative in the wake of soaring commodity costs.
The firm, which reported a loss of $215m on a 13% rise in sales to $1.94bn in the first quarter of fiscal 2012, said higher commodity costs had forced it to repeatedly raise prices, which had dented volumes.
Coffee: None of our products will look the same
However, more innovative new products would enable Sara Lee to charge higher prices without taking a volume hit executive chairman Jan Bennink told analysts in a conference call yesterday.
“On coffee we will make significant changes in the next 12 to 24 months. In 24 months… none of our packaging, none of our products will probably look the same as they currently look.
“You can expect the first relaunches in March, April of this year… then the big second wave of innovations will happen in the summer and then major innovations…can be expected in the first half calendar 2013 and hopefully even something already in the last half of calendar 2012.”
Meat relaunches to hit shelves in spring 2012
Innovations in the meat business would start to hit shelves in the spring, he revealed. “The first relaunch is expected in Q4. Second wave… you will see in the summer and the significant changes in product portfolio, as well as channel offerings to be expected from summer onwards.”
But prices might also be tweaked here and there to try to recover some market share, said chief executive Marcel Smits, who said headcount in the North American business had been reduced by more than 400 in the past year as part of a cost cutting drive.
The sum of the parts is worth more than the whole…
Details of the restructuring plan to split the business into international beverage and bakery and North American retail and foodservice would be unveiled on February 29, said Bennink.
“The full presentation of the strategy names, financial guidance, capital structure, basically what are these two pure play companies going to do, what can you expect from them, will be announced on our investor day on February 29.”