US: Ralcorp to consolidate units to cut costs

By Dean Best | 1 August 2012

US private-label food group Ralcorp Holdings plans to bring its subsidiaries together to save money and drive "sustainable" growth.

Ralcorp announced today (1 August) it would consolidate its snacks, sauces and spreads, as well as its cereal and pasta, units into a single company.

"The business will possess leading positions across 20 food categories with superior scale and capability in sales, marketing, research and development and operations," it said.

Ralcorp's snacks assets include Bremner Food Group, which runs seven sites in the US. Carriage House Companies is Ralcorp's sauces and spreads division.

The group's Ralston Foods makes own-label cereals while American Italian Pasta Co. makes branded and private-label lines.

Ralcorp said the consolidation would save US$26-31m in its next financial year and is expected to be completed the following year.

The company also provided an update on the most recent quarter in its current financial year. Third-quarter diluted earnings per share from continuing operations increased from US$0.28 to $0.54. Ralcorp, meanwhile, said net sales increased 11% in the three months to 31 July.

CEO and president Kevin Hunt said Ralcorp continued to be "impacted" by changes at its Bloomfield factory, as well as commodity costs and lower volumes.

However, he added: "We remain confident in our business strategy and believe that we are well-positioned to compete and seek opportunities to grow despite the challenging environment. We believe the actions we are taking, both with respect to Bloomfield and the strategic restructuring, will result in a leaner, more cost efficient operation that is more appropriately structured for sustainable, long-term growth."

Ralcorp will provide more detail on its third-quarter results and its restructuring plans next week.

Sectors: Bakery, Cereal, Condiments, dressings & sauces, Financials, Private label

Companies: Ralcorp Holdings, American Italian Pasta

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