SARA LEE BREWS STRATEGY TO PERK COFFEE SALES

BARBARA MURRAY

NEW YORK -- Sara Lee Coffee & Tea, already the leader in the North American food-service market and a worldwide leader in retail coffee sales, is taking several strategic steps to expand its base in North America.

The company recently completed acquisitions of the Chock Full O'Nuts, Hills Bros., Chase & Sanborn and MJB brands, the latter three from Nestle.

The addition of these leading brands represents a double-digit increase in retail market share for Sara Lee Coffee nationally, as well as penetration across several key geographic markets, including the Northwestern United States and New York.

Its market share is now 10.5%, behind Folger's and Maxwell House, said Henk de Beck, chief executive officer of the company. From scratch, the company has risen to more than $300 million in sales due to the acquisitions, he added.

"They're all strong regional brands," de Beck said. "Hills is very strong in the Chicago area," he noted. He told SN that Hills Bros. is now sponsoring a NASCAR race team. "Through that team we do a lot of in-store merchandising" through the March-to-November season, which has more than 30 races.

Chock Full O'Nuts, traditionally a New York brand, will sponsor the Rockettes' national tour, which will start after the summer, de Beck added.

New products and new packaging will be launched in the coming months, he said, probably in the de-caffeinated and cappuccino areas.

Having one division fully focused on coffee will make it more effective for retailers to deal with, he continued.

These retail brands are in addition to the company's leading food-service position with the Superior Coffee label, sold at leading hotels and institutions throughout the United States. Retailers can now trade among three major suppliers: Procter & Gamble (Folger's brand), General Foods (Maxwell House) and Sara Lee.

National brands are not uniformly strong, and the strategy is that retailers may find Sara Lee's brands complementary.