Sara Lee is seeking a new boss for its North American business following the resignation of North America chief executive CJ Fraleigh.
Chicago-based Sara Lee, which has just struck a $545m deal to sell its North American refrigerated dough business to Ralcorp, plans to split itself down the middle next year, with one company focused on coffee and tea, and the other on retail meats and foodservice.
Fraleigh, who left to “pursue other opportunities”, will temporarily be replaced by group chief executive Marcel Smits until a replacement is found, said the company.
“The company has commenced a search for Fraleigh’s successor, with the objective of making an appointment as soon as possible.”
A different approach is needed
Chairman Jan Bennink added: “CJ played an important role in taking the North American business to this stage in its development.
“Under his leadership, the North American business significantly improved its profitability, increased its rate of innovation and streamlined operations.”
But he added: “We now believe that a different approach is needed to transition the North American business into a pure-play company.”
In a conference call with analysts and investors to discuss the firm's fourth quarter figures last month, Smits said "unprecedented" hikes in commodity costs had forced the company to repeatedly raise prices, which had in turn dented volumes.
But an acceleration in innovation would help tackle the problem, he said. "We were willing to take short-term risks on the volume side by putting up prices to protect margins and the health of our business.
"But as the year progresses you will increasingly see a range of new products hit the market. We feel good about the innovation we have in the pipeline for 2012."
More innovative new products would enable Sara Lee to charge higher prices without taking a volume hit, he said. "If you have products with an added benefit, you can keep up or even increase prices. It's our task to innovate in the market."
Under the proposed split, announced in January, the North American retail and foodservice businesses (excluding North American beverages) will be spun off into a new $4.1bn revenue company retaining the Sara Lee name with a brand stable including Sara Lee, Jimmy Dean sausages, Ball Park hot dogs and Hillshire Farm lunch meats.
The yet-to-be-named other company will comprise the international beverage and bakery businesses, plus its North American beverages unit, with a brand stable including Douwe Egberts, Senseo, Pickwick, Maison du Café, L’OR, Café Pilão, Marcilla and Bimbo and revenues of $4.6bn.
Full details of the new companies - including the new name of the international business - will be announced in February.