TreeHouse sells 2 bakery facilities

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TreeHouse sells 2 bakery facilities

By Dan Ochwat - 01/13/2020

TreeHouse Foods continues to sell off parts of the company. The Oak Brook, Ill.-based manufacturer announced Jan. 10 that it will sell two bakery facilities to Rich Products Corp. The closing is expected to occur by April 10. 

TreeHouse is offloading a facility in Fridley, Minn., and one in Lodi. Calif., that catered to breads, rolls and cakes for in-store retail bakeries and foodservice customers. The deal comes weeks after the Federal Trade Commission stalled a deal to sell its cereal business to Post Holdings for $110 million.

In fact, TreeHouse just announced that it would terminate the sale to Post, citing difficulty from the FTC filing. TreeHouse is re-marketing the business as one that is open for sale.

The FTC claimed that TreeHouse and Post were two of three significant manufacturers of private label ready-to-eat cereals and that it would give Post a more than 60% share of the market, eliminating competition.

In July, TreeHouse sold its snacks division to Atlas Holdings LLC for $90 million. The division was considered one of the largest in the private label industry, especially leading in the nuts and trail mix categories. The division employed more than 800 people and was said to generate roughly $670 million in sales in 2019.

Buffalo, N.Y.-based Rich Products is a family-owned company with more than 11,000 associates globally that specializes in cakes and icings, pizza, appetizers and more. The company said it planned to use these facilities to add to its current dessert and bakery products portfolio.

"These added capabilities will also allow us to provide greater fully-finished and artisan product options, which are in high demand among our customers," said Ray Burke, president and chief operating officer, Rich's U.S. - Canada region

The deal doesn’t put TreeHouse out of bakery entirely, however. The company will maintain its popular frosted sugar cookies and Lofthouse branded business. "The sale of the Fridley and Lodi facilities allows us to sharpen our focus at TreeHouse, and importantly, creates an opportunity for these plants to thrive under Rich Products' ownership," said Steve Oakland, CEO and President of TreeHouse Foods. 

The two plants employed 338 hourly employees and 45 salaried employees that will transition to Rich Products.

The in-store bakery business that TreeHouse runs came from a 2016 transaction, acquiring the private brands sector from ConAgra Brands.

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