The other day I wrote about lack of focus at a corporate level, more specifically as it related to Sears. (click here to read)
Sears has announced plans to launch a video download service to compete with the likes of NetFlix, etc. My observation, and others too, is that this is far removed from their core business, and IMO, a major distraction for the company's management team.
In even more recent news, and from the perspective of companies re-focusing their efforts on core business practices, the Wall Street Journal wrote about Foodservice behemoth Sara Lee potentially shopping two of their divisions in an attempt to sharpen their focus.
Sara Lee's meat division and their foodservice beverage (coffee) division are apparently being evaluated for spin-off. Tyson appears to be interested in the meat division; and Nestle, which recently acquired Vitality Beverage Foodservice, may consider acquiring the beverage division.
I must admit, I have a personal interest in what happens to Sara Lee's beverage division. They, and Nestle, through the Vitality acquisition, happen to be competitors. In fact, Sara Lee dealt us a pretty significant blow late last year when Houston based SYSCO Foodservice Distributor announced that Sara Lee would be the single supplier for iced tea under the company's private label.
Until October 2010, several regional beverage companies manufactured and packed iced tea concentrates for the distributor. The decision to go solely with Sara Lee might have been a smart one as far as the distributor is concerned, but it significantly impacted the sales revenue for several beverage companies.
Now, it appears, the Sara Lee beverage division may not be under the Sara Lee corporate umbrella much longer. The parent company, following the resignation of their CEO for health reasons, is revitalizing its focus.
I am confident the decision to shop the beverage division was not made because the division is losing money. In fact, it's been said that division is one of the most profitable divisions at Sara Lee, valued somewhere in the $7Billion neighborhood.
Then why sell?
Running a beverage company takes the right personnel, both in sales and equipment; it takes a financial and time commitment to equipment because 90% of foodservice beverages are dispenser driven and dispensers need regular maintenance and service; and, it takes an understanding of the beverage distribution model, which is different from even your standard foodservice distribution model.
Nestle would do well to acquire the Sara Lee beverage division. It would immediately put them back in the drivers seat with SYSCO, picking up millions in potential annual sales. Plus, it would give them yet another recognizable foodservice brand in their portfolio.
It would of course make my life more difficult and my job more challenging, but what's life without a little more difficulty and challenges, right? Besides, from a visual perspective, Nestle would become the Goliath to our David.
Before someone misinterprets my comment, I am not saying our little company will (figuratively or otherwise) take out a multinational foodservice giant and one of the most recognizable brand names in the world...no, I'm not suggesting that at all.
All I'm suggesting is a Nestle/Vitality/SaraLee beverage company would be HUGE. As typical with most huge companies, there are limitations to how fast they can react and make decisions. (I compare it to an aircraft carrier trying to turn around while at flank speed...you measure the distance it takes to turn around in miles, not feet.). As a smaller company, with a finite number of shareholders, we are more "nimble" and can make decisions more rapidly. Our "focus" is more pinpoint, and hopefully more effective than a multinational foodservice giant.
No matter what happens with the Sara Lee beverage division, I can promise you my company will remain focused on our core business ... Foodservice Beverages ... and on our core principles: quality, customers, and value.
Now...can you tell me the release year of the Foreigner record that my blog title is based on? And how many times did it go platinum? (Without looking it up on Wikipedia) :)
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