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TreeHouse Foods Sees Opportunities In Private Label Trends

Pointing to continued growth of own brands along with trends in snacks, company officials feel the private label supplier is well positioned for the future.
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TreeHouse Foods officials feel current business trends will be a benefit to the company in the year ahead.

TreeHouse Foods position at the intersection of two significant trends impacting the private label sector offers the company new opportunities for growth in the months ahead, said Steven Oakland, the company’s chairman, president, and CEO.

During a recent investor conference call to discuss TreeHouse’s second-quarter results, Oakland is feeling bullish given the continued growth of private label groceries and consumers continuing to seek out new snacking options. 

“Private brands have consistently gained share over the last two decades, and we believe private brands have a significant runway for growth,” he said. “Many grocery retailers also see a significant runway for growth in private brands and are making their own strategic investments.”

Oakland comments came following TreeHouse’s reporting of second quarter results. The company for the quarter ended June 30 had net sales were $788.5 million, down from net sales of $803.5 million in the comparable quarter the previous year. Company officials said the decrease was primarily due to targeted commodity-driven pricing adjustments. 

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Additionally, the decrease was attributed to unfavorable volume/mix related to planned distribution exits primarily in the company's coffee and in-store bakery categories, and the restoration of one of its broth facilities. These items were partially offset by volume/mix from the acquisition of the coffee roasting capability and new business wins.

During the conference call, Oakland said the company is now running key broth production lines and shipping products from its facility that had been undergoing a modernization process over the past few months.

“We have upgraded our equipment, refined and improved our processes, and are progressing against our internal timeline,” he said. “Looking ahead, we will continue to work with our customers to fulfill current needs and prepare for the upcoming broth season. We believe the restoration of this facility will provide the planned contributions to net sales and profitability in the back half.”

Oakland is also confident TreeHouse can deliver additional growth because of the company’s depth. This includes its “advantaged capabilities” within its core categories, competing in product categories that are currently in high demand, and leveraging its category expertise and consumer insights to help its retail partners drive growth.

“We have created a net sales pipeline that we are excited about,” he said. “We are executing well against our plan for 2024. We've secured a variety of opportunities throughout the first half of the year, including wins in cookies, refrigerated dough, pretzels, and pickles, bolstering my confidence in our ability to deliver volume growth not only in the third and fourth quarters but beyond.

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