Tyson Foods sells Sara Lee frozen bakery and snaps up organic chicken brand

05 Jun 2018 --- Tyson Foods has agreed to sell its Sara Lee Frozen Bakery and Van’s businesses to private equity firm Kohlberg & Company in a deal which includes the Chef Pierre, Bistro Collection and Van’s brands, and a license to use the Sara Lee brand in specific channels.

In addition, the deal also includes the sale of the company’s Tarboro, North Carolina and Traverse City, Michigan prepared foods facilities and a sales office in Canada. The 1,160 team members employed at the two facilities and sales office are expected to keep their positions with the new company.

“These are great assets with outstanding team members; however, we’re focused on expanding Tyson Foods’ leadership position in protein,” says Sally Grimes, Group President, Prepared Foods. 

“We believe these brands and facilities will do well as part of Kohlberg, which has extensive experience buying and growing businesses.”

Kohlberg is partnering with C.J. Fraleigh, who will join as Executive Chairman at closing. Fraleigh, a long-time consumer products executive with more than 30 years of experience, previously served as CEO of Sara Lee, North America.

“I’m very excited to be joining the team,” says Fraleigh. “With established and iconic brands, including Sara Lee, Chef Pierre, Bistro Collection, and Van’s, this business is well-positioned to continue its historical growth trajectory.”

“I look forward to working with the company’s employees to execute on growth opportunities we’ve identified and continue providing customers with excellent service, innovation and consistently high-quality products.”

Seth Hollander, partner of New York-based Kohlberg, says: “Kohlberg’s partnership with C.J., along with our depth of experience with food investments, creates an excellent opportunity to drive growth and value creation for all stakeholders.”

The terms of the agreement are not being disclosed. 

Tyson Foods acquires organic chicken brand 
Meanwhile, Tyson Foods also says it has become one of America’s leading producers of organic branded chicken through its acquisition of Tecumseh Poultry LLC, which also includes the air-chilled Smart Chicken brand. 

Again, the terms of the deal have not been disclosed.

Tecumseh Poultry was founded in 1998 and produces air-chilled, fresh chicken, as well as deli-style chicken and a variety of chicken sausages. 

The air-chilling process involves using cold air to cool chicken during processing, while the most common method used by the US chicken industry is water-chilling. Both methods are monitored by USDA inspectors and are considered safe.

“Consumers want choices. More and more consumers want options for fresh, organic food that fits their lifestyles,” says Eric Schwartz, Chief Marketing Officer of Poultry for Tyson Foods. “The Smart Chicken brand is a leader in this key organic category, and the category’s growth makes this acquisition a strategic fit for Tyson Foods.”

Tecumseh Poultry’s processing capabilities and its focus on quality have given the Smart Chicken brand a leading position in the fastest-growing US category of fresh chicken.

Operations include two plants located in Tecumseh and Waverly, Nebraska, as well as live operations. Tyson Foods currently plans to operate Tecumseh Poultry as a separate, wholly owned subsidiary and expects to retain its approximately 600 team members.

“We’ve spent 18 years working to perfect our ability to produce the highest-quality, fresh chicken in the US. We’re very proud of that, and it’s not going to change,” says Kevin Siebert, president of Tecumseh. 

“Tyson Foods brings to the Smart Chicken brand and the rest of our product lines the resources to make us even stronger.”

“This is a well-run company with a solid customer base that’s earned consumer loyalty. We’re excited for Tecumseh to continue to produce quality chicken while providing the business the scale and resources it needs to continue growing,” says Doug Ramsey, group president of Poultry for Tyson Foods. “Customers should continue to work with existing contacts.”

Tyson Foods also produces organic products under its NatureRaised Farms and Aidells brands.