Sara Lee Sheds Majority of Coffee Assets, Buys Tea Company

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Sara Lee Sheds Majority of Coffee Assets, Buys Tea Company


DOWNERS GROVE, Ill. -- Sara Lee Corp. is swapping out coffee for tea. The company completed the sale of the majority of its North American foodservice coffee business, while also acquiring a premium tea brand.

Sara Lee sold a majority of its coffee segment to The J.M. Smucker Co., known for its Folgers, Dunkin' Donuts, Jif, Crisco, Pillsbury and eponymous retail brands. The sale also includes liquid coffee concentrate sold under the Douwe Egberts brand.

"We are pleased to complete this transaction that adds the market-leading coffee concentrate business to the Smucker portfolio," said J.M. Smucker Co. CEO Richard Smucker. "The transaction further strengthens our position as a leading North American coffee company, provides new coffee technologies, and adds significant scale to our foodservice business. We are excited to welcome the nearly 475 new employees into the Smucker family."

At the same it is shedding the majority of its North American coffee business, Sara Lee is placing a huge bet on tea. The company announced today that it is acquiring Tea Forté, a Massachusetts-based luxury tea manufacturer, for an undisclosed sum.

Once that deal is completed, Jan Bennink, Sara Lee's executive chairman of the board, said the company will spin off all of its coffee and tea assets into an unnamed second company. The spinoff is expected to take place during the first half of this year.

According to a Sara Lee news release, the coffee and tea company will retain the current team of Tea Forté to run the business independently before integrating it into Sara Lee's international coffee and tea operations.

"Tea Forté's expertise in ultra-premium teas complement our existing business with leading brands across Europe and boosts our innovation capabilities in the tea category," said Michiel Herkemij, CEO of Sara Lee International Beverage.

Following the spinoff, the existing company, still to be called Sara Lee, will focus on brands such as Ball Park, Hillshire Farms and Jimmy Dean.