US food processor Dean Foods has said it plans to spin off its specialty foods group to Dean shareholders in order to enable the company to focus on its core dairy and branded businesses.

The planned debt-free spin-off of the unit will create a publicly traded private label and regionally branded consumer packaged goods company with approximately 1,700 employees and estimated 2005 revenues of over US$700m

The company also announced that, effective immediately, a management team headed by Sam Reed, former CEO of Keebler Foods, is to lead the new company. The new management team has also made a cash investment of $10m in the specialty foods unit, representing 1.67% ownership of the new business.

In conjunction with the spin-off, Dean Foods said it is moving its Mocha Mix non-dairy creamer, foodservice dressings, and Second Nature egg substitute businesses into the specialty foods group.