TreeHouse Foods, Inc. today announced a series of organizational changes designed to optimize the business and further create value for customers. Beginning in the first quarter of 2020, TreeHouse will reorganize from three divisions, currently structured according to product category (Baked Goods, Beverages and Meal Solutions), to two divisions, organized according to market dynamics – Snacking & Beverages and Meal Preparation.
“Following an in-depth review of our categories and strategies, we have decided to organize ourselves in a manner that we believe best serves our customers,” said Steve Oakland, CEO and President of TreeHouse Foods. “The retail grocery landscape continues to evolve and be very competitive, and our customers are looking to solve two fundamentally different goals. First, to help demonstrate value to the consumer and improve margins that they can invest to drive consumer traffic; and second, to help introduce uniqueness and innovation, so they can differentiate themselves and be more relevant to their distinct shopper base. Our reorganization not only enables us to align our resources to help our customers achieve their goals, but it also better positions us for growth going forward.”
Snacking & Beverages
The Snacking & Beverages division will include categories which show greater growth potential in the marketplace, specifically: Bars, Broth, Candy, Cookies & Crackers, Griddle, Pita, Powdered & Liquid Beverages, Pretzels, Tea, and Other Blends. In 2019, the Snacking & Beverages division had revenue of approximately $1.7 billion.
The focus of the division will be on revenue growth, and research, development and commercialization will be geared toward evolving consumer trends. The reorganization of Snacking & Beverages will enable TreeHouse to apply the proper resources to meet its retail customers’ goals around experience, uniqueness and differentiation in private label.
In a separate press release issued today, the Company announced that Kevin G. Jackson has joined TreeHouse as President, Snacking & Beverages, and will report to Steve Oakland, CEO and President. Mr. Jackson was most recently Senior Vice President, U.S. Retail Sales & North American Away From Home Division, with The J.M. Smucker Company. Moe Alkemade, President of the Beverages division, will be leaving TreeHouse to pursue other opportunities.
The Company noted that Mr. Jackson is currently governed by a non-competition agreement on coffee, and as a result, the Single Serve Coffee business will be managed within the Meal Preparation division at least through the end of 2020.
The Meal Preparation division will be comprised of the following categories: Bouillion, Cheese & Pudding, Hot Cereal, Non-Dairy Creamer, Pasta & Dry Dinners, Pickles, Pourable & Spoonable Dressings, Preserves, Red Sauces, Refrigerated Dough, Sauces, Single Serve Coffee, and Syrup. In 2019, the Meal Preparation division had revenue of approximately $2.6 billion.
The focus of the division will be on productivity, efficiency and cash flow. Operational progress will be driven by continuous improvement and value engineering. The reorganization allows TreeHouse to apply resources that better align with customers’ goals for driving value within the center of the retail grocery store.
Mark Fleming, currently President, Baked Goods, will serve as President, Meal Preparation. Given the division’s focus on operating efficiency, Mr. Fleming will report to Shay Braun, Chief Operations Officer. Mr. Braun will continue to maintain his current supply chain responsibilities.
Additional organizational changes
Triona Schmelter, currently President, Meal Solutions, will take on the newly created role of Chief Transformation Officer. She will focus her efforts on how the Company leverages shared resources across the organization, including its approach to distribution and logistics, sourcing and shared business services. In this new role, Ms. Schmelter will work with the functional leaders to build capabilities for the future and capture savings to drive growth.
Transition expenses related to the reorganization will be handled within the Company’s TreeHouse 2020 restructuring program. As a result, cash restructuring expenses, as well as selling, general and administrative savings have already been contemplated within the Company’s 2020 guidance issued February 13.