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Farmer Bros. Buys Sara Lee Coffee Delivery Business

Sara Lee Corp. is selling its U.S. Direct Store Delivery Foodservice coffee business to Farmer Bros. Co.. The $45 million sale involves only the business that delivers coffee directly to sites. Sara Lee will retain the portion delivered through third parties.

As part of the transaction, the Superior Coffee, Cain's, Ireland, Justin Lloyd, McGarvey, Metropolitan, Prebica, Suntipt (U.S. only), Wechsler, Cafe Royal and Royal Kona brands will be sold to Farmer Bros., which will license these brands back to Sara Lee for a transition period. In addition, Farmer Bros. will acquire more than 20,000 customers and Sara Lee's Foodservice DSD coffee business sales and distribution staff and infrastructure. That includes more than 60 branch facilities, a fleet of delivery vehicles and a coffee manufacturing plant in Houston. About 640 Sara Lee employees will effectively be transferred to Farmer Bros. Finally, for the next three years Farmer Bros. and Sara Lee have entered into reciprocal co-pack arrangements for the supply of certain coffee and tea products.

"We are pleased to announce the sale of our foodservice DSD coffee business, which is consistent with our commitment to simplifying our business to focus on areas where we have a clear, sustainable point of difference and can leverage our scale," says Sara Lee North America COO CJ Fraleigh. "We remain committed to growing our foodservice beverage business, with its leading liquid and roast and ground coffee positions, through our strong national sales force and distributor network."

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