Sara Lee really split to focus on business?

by chee Leng (on coffee makers)
(Singapore)

Sara Lee recently announced that they are splitting into two parts to better focus on their business.

One part of the business would be known as Sara Lee and that includes the North American retail and food services business.

The total revenue is about $4.1 billion and includes brands such as Jimmy Dean and State Fair.

The beverage, coffee and bakery business currently known as coffeeco that boast of $4.6 billion revenue is the other part.

It includes brands such as Douwe Egberts and Senseo.

For most industry watchers, we know that focusing on business is the generic term used for many forms of restructuring.

The reason for Sara Lee doing this is many, but the most probable one would be the interest to sell of its coffee business.

Douwe Egberts and Senseo is doing brisk business and with its LOR espresso capsules doing good business in France, the coffee business cannot be stronger.

Speaking of this saga, the lawsuit from Nespresso might be another reasons why they want to split -perhaps to lessen the PR damage to the overall company.

My two cents is this:

1. Coffeeco is doing well both on the retail and Food services

2. Sara Lee grows its coffee business bigger with the introduction of LOR espresso capsules (Nespresso compatible pods). This would drive up the value of its overall business

3. There are interested parties in its coffee business

4. It split into two units to facilitate the sales

Probably many of you would share my same thoughts, or if you have any others, pen it down and see who is correct 6 months down the road!