Further bread price increases to drive Sara Lee's margins

By Karen Willmer

- Last updated on GMT

Related tags Sara lee Coffee

Sara Lee will "take price increases as necessary" in order
to offset increasing raw material costs in its bakery segment, the
company said yesterday in its annual analyst meeting.

The company said that it increased the price of many of its US fresh bakery business products this week by an average of 10 cents in order to cover rising costs. "Fiscal 2008 should show top- and bottom- line growth, which should drive incremental operating margin,"​ said Theo de Kool, chief financial and administrative officer for Sara Lee. Within the food and beverage business, 25 new products will be launched in fiscal 2008, including a focus on lunch snacks. Within the foodservice business, the company said it will introduce a range of handheld breakfast and snack options, "developed to capitalise on three trends; away from home breakfast, snacking and portable foods". ​Toasted sandwiches and a new iced coffee and tea system will also be launched in fiscal 2008 under the foodservice business. A further range of coffee products are planned for the International beverage business, particularly in key emerging markets of Russia and Brazil. "In fiscal 2008, international bakery will work to hold its share in an expanding market while driving operational efficiencies to restore margins,"​ Sara Lee added. Operating margins were minus 0.1 per cent for the fiscal year 2007 compared to minus 10.7 per cent the previous fiscal year, the company said last month. "We achieved higher sales and marketing capability, combined with a robust innovation pipeline, will continue to drive our performance for the coming year,"​ Sara Lee's chief executive officer Brenda Barnes said last month.

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