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04/21/2021

TreeHouse Foods feels pandemic pain

A Wall Street Journal article and other recent coverage highlight challenges the supplier has faced during the pandemic.
Dan Ochwat
Executive Editor
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While retailers and their store brands have been booming during the pandemic, TreeHouse Foods, a leading food and beverage supplier for private label, has faced major challenges.

Steve Oakland, TreeHouse Foods CEO, talked about the supply chain disruption that impacted its business during a PLMA panel, saying that in food, the change in product demand is around 1-2% annually, so the company wasn’t prepared for the level of volatility brought on by pantry loading and hoarding done during the pandemic. He also said the company faced losses as big as 70% in its foodservice business.

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Steve Oakland

Oakland reiterated the supply chain pressures faced in a recent Wall Street Journal article, saying the company had to cut back on some flavor options and products to gain efficiency in the supply chain. However, the cuts did cost the company market share, per the article.

In the meantime, the company has been making c-suite moves, including a new COO, and it has faced questions from activist investor Jana Partners, who has a 7.5% stake in the company and was rumored to wanting the company to sell. TreeHouse came to an agreement with Jana amid the addition of new board members.

In the WSJ article, Jana Partners said it was encouraged by the steps that TreeHouse had made to build back the business, including the stoppage of producing 11,000 items, getting rid of 11 factories and selling off some of businesses.

Despite the challenges, Oak Brook, Ill.-based TreeHouse did report net sales growth of 3.3% and organic net sales growth of 4% for the fourth quarter of 2020, and it expects further gains ahead following its acquisition of popular U.S. pasta brands under Ebro’s Riviana Foods.