When Sara Lee Corporation acquired Earthgrains, the number-two player in the fresh bread category, it transformed the size and scale of the Sara Lee Bakery Group. The acquisition quadrupled bakery sales and provided a premier direct-store distribution system that would help drive the extension of the Sara Lee franchise.
- With this acquisition, Sara Lee now found itself with over 100 brands in its bakery portfolio
- To generate long-term growth, the group needed to improve its strategic focus
- Assessed the portfolio of brands along three core factors: brand equity, brand momentum and brand leverage
- Determined the economics of the bread category-size, profit, growth and competitive intensity to identify where a Sara Lee Bakery Group brand presence were necessary. Category analysis and other research techniques were used to determine where the group's core brands have 'permission' to operate and extend
- Assessed the economics of each brand in the portfolio to understand their value and contribution to the firm's economics. With a series of regional surveys, analyzed regional brand equity, competitive positioning and price sensitivity. Modeled potential share shifts within the group and across competitors resulting from the expansion and elimination of certain brands
- Assessed retailer reactions to a revised and potentially smaller portfolio through research with key retailers to ensure a win-win situation for both the Sara Lee Bakery Group and major retailers
- The recommended portfolio combined core national brands with a number of strong regional to maximize revenue and profit growth. This provides a strong national presence and allows the group to leverage its regional brands and offers retailers greater flexibility for promotions and private label