Sara Lee announced last week that it would sell its $1.1 billion European packaged meat businesses as part of a complete reorganisation of the business. Sara Lee owns popular European brands such as Aoste and Imperial, which have a large market share in France and the Benelux region.
These brands would be attractive to Ter Beke, which has been looking to strengthen its position within the region's growing packaged meats market.
The Dutch market is one of the trendsetters in this growth, illustrated by the fact that pre-packaged processed meats already represent 90 per cent of the country's total processed meats market. This market segment is being strongly driven by the retail sector, which needs specialised suppliers that offer high-quality and innovation within an increasingly crowded market.
In January Ter Beke acquired the Dutch company Langveld Sleegers, one of the market leaders in the field of slicing and pre-packaging processed meats. The acquisition, which sees the Belgian food producer taking over 100 per cent of the shares of Langeveld Sleegers with retroactive effect as of 1 January 2005, means that Ter Beke now owns one of the largest slicers and packagers of processed meats in the Netherlands.
In 2004 Langeveld achieved a turnover of more than €30 million with 100 employees.
Ter Beke believes that Langeveld offers a great diversity of packaging techniques to various major retailers on the Dutch market. Through the acquisition of a service specialist without its own production, Ter Beke is strengthening its position in this growth segment of processed meats in a way that reduces its dependency on the evolution of raw material prices.
Ter Beke is a Belgian fresh food group with seven divisions including five in Belgium, one in the Netherlands and one in France. The group recorded a gross turnover of over €200 million last year.
From Sara Lee's perspective, the proposed sell off of some of its French and Benelux charcuterie businesses is designed to improve the company's performance and better position the group for long-term growth.
"We are taking bold actions that will enable Sara Lee to compete more successfully in today's dynamic marketplace and thereby generate consistent, long-term topline growth and bottomline profitability for our shareholders," said Brenda Barnes, president and chief executive officer of Sara Lee.
The company's new organisation structure will consist of three lines of business. North American Retail will include the bakery, packaged meats and Senseo coffee retail businesses in North America, with a total expected sales revenue of $4.5 billion in sales.
North American Foodservice, with expected sales of $2.2 billion, will include the bakery, coffee and meats foodservice businesses in North America while Sara Lee International will include the bakery and beverage businesses outside of North America, the global household products business, as well as the European packaged meats business. This sector will represent $4.6 billion in sales.
"Under our transformation plan, we will concentrate our financial and management resources on a smaller number of business segments where we are well-positioned for substantial growth," said Barnes. "As a result, Sara Lee will undergo a significant portfolio change, pursuing the disposition of our businesses that do not fit with our strategic focus within the food, beverage or household products categories."
The new reporting structure will be effective from 3 July 2005, the beginning of the company's 2006 fiscal year.