History
In 1935, Charles Lubin and his brother-in-law, Arthur Gordon, bought a small chain of Chicago neighborhood bakeries called Community Bake Shops. Working together, the businessmen expanded their original three stores into a chain of seven bakeries.[5] Lubin wanted to expand the business. He named a cream cheesecake after his eight-year-old daughter, Sara Lee Lubin, and changed the name of the business to Kitchens of Sara Lee.[5]
In 1956, the Consolidated Foods Corporation bought Kitchens of Sara Lee, and it became one of the company's best-known brand names. In 1985, the name Sara Lee Corporation was adopted for the corporation as a whole. While the company traced its lineage to 1939, when Nathan Cummings acquired C. D. Kenny Company, a wholesale distributor of sugar, coffee, and tea in Baltimore, Consolidated Foods Corporation was actually the descendant of a Chicago grocery store called Sprague, Warner & Company. This enterprise, which started on State Street in Chicago, was founded during the Civil War by Albert A. Sprague and Ezra J. Warner. By 1909, Sprague, Warner & Company was one of the leading wholesale grocery companies in the United States, famous for house brands such as Richelieu, Ferndell, and Batavia. In 1942, this company was acquired by the Canadian-born Cummings. The new Chicago-based company, at first called Sprague Warner–Kenny Corp., ranked as the largest grocery wholesaler in the United States. Annual sales grew from about $20 million in 1942 to $120 million by 1946. After changing its name in 1945 to Consolidated Grocers, Cummings's company became the Consolidated Foods Corporation in 1953.[6]
In 1986, Sara Lee bought the manufacturing and mail order operations of Wolferman's, a maker of English muffins, that dated back to 1888.[7]
In February 1988, Sara Lee agreed to the purchase of the 84-year-old Adams-Millis Corporation of High Point, North Carolina, the largest private label sock and stocking manufacturer in the United States, with 3000 employees and 1987 sales of nearly $200 million.[8]
On June 25, 2001, Sara Lee Corp pleaded guilty to a misdemeanor and agreed to pay $4.4 million for selling tainted meat that was blamed for at least 15 deaths and six miscarriages in 1998; the agreement stressed that Sara Lee's Bil Mar Foods division did not knowingly distribute the tainted meat.[9] On August 7, 2001, Sara Lee Corp cleared the last remaining regulatory hurdle in its purchase of Earthgrains Co, receiving approval from the European Commission (S).[10]
Brenda C. Barnes joined Sara Lee Corporation in July 2004 as the president and chief operating officer. Then in February 2005, Barnes was named president and chief executive officer, and the corporation announced it would move its headquarters from Cincinnati, Ohio, to Downers Grove, Illinois, which housed the company's North American operating businesses and the majority of Sara Lee's corporate staff.
Also in February 2005, the company began executing a multi-year plan to transform Sara Lee into a company focused on its food, beverage, and household and body care businesses around the world. To support that focus, Sara Lee announced plans to dispose of approximately 40 percent of the company's revenues, including its apparel, European packaged meats, US retail coffee and direct selling businesses. On December 22, 2005, Sara Lee Corporation was to delist from Euronext Amsterdam and Euronext Paris stock exchanges, as well as the Swiss Exchange. The company said it was taking the voluntary step due to low trading volumes on those exchanges.[11]
2005 also saw the debut of Sara Lee Soft & Smooth made with whole grain white bread. In October, Barnes succeeded C. Steven McMillan as chairman. The year ended with the sale of the direct selling business to Tupperware.
In 2006, Sara Lee announced a new company wide campaign: "the joy of eating". The campaign was part of a restructuring at Sara Lee.
2006 featured the divestiture of Sara Lee's European meats and European branded apparel businesses. In addition, the corporation spun off to its shareholders the branded apparel, Americas/Asia, business, into a separate, publicly traded company called Hanesbrands Inc.
Including the spin-off, Sara Lee raised more than $3.7 billion in proceeds as part of the company's transformation plan. In addition to the monetary benefits, the company became tightly focused on its core businesses: food, beverage, and household and body care. In 2008, Sara Lee sold off its Direct Store Delivery foodservice coffee business to Farmer Brothers for a reported $45 million.[12]
By 2009, Sara Lee was pursuing the sale of its household and body care business in their continuing effort to focus on core business.[13] In April, Sara Lee launched a state-of-the-art research and development center named The Kitchens of Sara Lee, a 120000 sqft campus at the company's headquarters in Downers Grove.[14]
On September 25, 2009, Sara Lee announced it accepted a binding offer by Unilever for €1.275 billion to sell its global body care and European detergents business.[15] The transaction was approved by EU regulators in November of the following year.[16]
On November 9, 2010, Sara Lee said that by selling its North American Fresh Bakery unit to Grupo Bimbo, it could grow in other areas. The $959 million deal gave Sara Lee the right to continue using the Sara Lee name on frozen desserts and meat products. Grupo Bimbo was to use the Sara Lee name for fresh-baked products around the world except for Western Europe, Australia and New Zealand. The deal also gave Grupo Bimbo 41 baking plants, and the regional brands Grandma Sycamore's, Heiner's and Rainbo.[17]
On January 28, 2011, Sara Lee announced the company would be split into two units. The company said its North American operations (including Jimmy Dean, Ball Park and Hillshire Farm) would take the Hillshire Brands corporate name, while the international beverage and bakery businesses (including Douwe Egberts, Senseo, Pickwick, Maison du Café, L'OR, Café Pilão, and Marcilla) would constitute a separate unit named D.E Master Blenders 1753. Some analysts said splitting the business into two units would make a takeover more likely. Stockholders would have equal shares in both companies. In the same month, Sara Lee received noted media attention regarding their strategy to "refocus on the core" to revamp the company. In a Forbes magazine column, Adam Hartung stated Sara Lee could not "cost-cut, refocus or re-align a business to success with no new products and no growth plan".[18] Also, Marcel Smits, interim CEO since Barnes suffered a stroke, became the new CEO, and Jan Bennink director and chairman.[19] The split was completed on July 4, 2012.
The successor company, Hillshire Brands, re-located its headquarters from Downers Grove to Chicago in 2012.[20] In 2014, Hillshire, along with the Sara Lee operations, was acquired by Tyson Foods.[21]
In 2015, the United States Equal Employment Opportunity Commission ruled after an investigation that African-American workers at the Sara Lee Corporation plant in Paris, Texas (which had closed in 2011)[22] had been deliberately exposed disproportionately to asbestos, black mold, and other toxins, and also had been targets of racial slurs and racist graffiti.[23]
On June 1, 2018, Tyson announced that it would sell the Sara Lee, Van's, Chef Pierre and Bistro Collection brands to Kohlberg & Company.[24] The sale was completed on August 1, forming Sara Lee Frozen Bakery, which will be based in Oakbrook Terrace, Illinois.[25]
