TreeHouse Foods' Sales Rise With Consumers' Growing Desire for Value

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September 28, 2010

Private label manufacturer TreeHouse Foods believes its future success hinges on the consumer’s continued desire for value through the right combination of price and quality.

"Private label is here to stay" said CFO Dennis Riordan during a recent presentation to investors at a conference in Boston.

TreeHouse Foods has recorded a 21 percent compound annual growth rate in net sales since its inception in 2005, according to a FlexNews report.

Although CPG companies have accelerated promotional activity lately, Riordan said the price gaps at retail between national brands and store brands have remained relatively consistent.

Retailers also make more profit per unit on their own store brands, Riordan said, which is why customers such as Walmart, Supervalu, Meijer, Safeway and Kroger are focusing so heavily on private label food.

TreeHouse will continue to grow by making the right acquisitions at the right time, Riordan noted. In March, the company acquired Sturm Foods and has publicly stated its intention to continue growing through acquisition.

Riordan noted that the U.S. private label market is highly fragmented and rife for consolidation.

Large private label manufacturers including TreeHouse, Cott Corporation, Ralcorp, Dean Foods, Perrigo, ConAgra and Smithfield only account for 18 percent of the of the national market, with the balance of the market controlled by smaller players, Riordan said.

Read These Related Articles:

• TreeHouse CEO: U.S. Store Brands Growth to Outpace Grocery Sector
• TreeHouse Foods Acquires S.T. Specialty Foods
• Low Retailer Confidence Undermines Store Brand Growth
• Store Brand Growth Tougher in a More Competitive Environment
• Ralcorp Acquires American Italian Pasta Company

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