US: Private label to outpace sector - TreeHouse CEO

By: just-food.com | 11 February 2010

US private-label food maker TreeHouse Foods today (11 February) called 2010 "a year of opportunity" for the business and forecast strong growth for own label.

The company, which makes soups, jams, spreads and sauces for US retailers, predicted that private-labels volumes would "outpace" the overall grocery sector in the country.

Chairman and CEO Sam Reed was upbeat about the year, especially after TreeHouse's recent acquisition of Sturm Foods.

TreeHouse struck a deal to buy Sturm before Christmas and expects to close the transaction in the first quarter of the year.

The group has already forecast that Sturm will add up to US$0.30 to earnings per share in 2010 - and up to $0.40 on a pro-forma basis across a full year.

"We expect to add Sturm to the TreeHouse family and will work to expand their base of customers throughout our North American distribution network," Reed said.

"We see a relatively benign cost environment that will allow us to focus on new business opportunities while maintaining our diligent pursuit of production and distribution efficiencies."

Reed was talking as TreeHouse said fourth-quarter net income had more than tripled in 2009 from $6.8m to $22.1m.

Net sales climbed 1.7% in the quarter to $404.8m as growth in the retail channel was dampened by lower industrial and export revenues.

Looking at 2009 as a whole, net income jumped from $28.2m in 2008 to $81.3m on the back of higher gross profits and lower selling and finance costs.

Net sales were up 0.7% at $1.51bn

Sectors: Baby food, Chilled foods, Retail

Companies: TreeHouse Foods