Baking & Snack - July 2010 - 18

NEWSFRONT
NEWS | TECHNOLOGY

Fresh Start Bakeries acquired by Aryzta AG
Aryzta AG, Zurich, Switzerland, acquired
Fresh Start Bakeries and Great Kitchens for
a combined $1.08 billion in two separate
transactions that are expected to double
the Swiss-based company's outputs.
"From a business perspective, we will operate with a greater geographic footprint
and with much better channel access to
consumers," said Owen Killian, c.e.o., Aryzta.
"These acquisitions double our manufactured volumes with an additional 30 production locations in nine countries."
Aryzta paid $900 million for Fresh Start
Bakeries, Brea, CA. The company is a global
supplier of specialty bakery products with
a leading position in the quick-service restaurant segment. It operates 29 specialty
production facilities across the US, Canada,
Germany, Poland, Sweden, Spain, Brazil,
Australia and New Zealand. The company
also has three joint ventures located in
North America, Chile and Guatemala.
Fresh Start was established in the early
1960s by Harold Freund, president of
Freund Baking Co. in Glendale, CA. The original plant supplied McDonald's restaurants
in southern California, and a second plant
was built in 1969 to supply McDonald's in
northern California.
The business expanded through the
1970s, and in 1982, Craig Olson was
named president, and the company took
the name Fresh Start Bakeries, Inc. In addition to baking plants in California and
Hawaii (added in 1974), Fresh Start built
a hamburger bun baking plant in Kansas City, KS, in 1984. The company began
opening plants outside the US in 1988,
with facilities in Germany and Brazil.
More baking capacity was added with
a joint venture in the 1990s, building two
plants in Tennessee, one in Dickson and
the second in Nashville. In 2003, Fresh Start
partnered with Galasso's Bakery in the construction of an 110,000 sq-ft California plant
with five production lines baking more than
200 different products daily, mostly French
bread, sourdough bread, sliced bread, rolls,
buns and specialty bread products.
A significant departure from the company's bun-centric roots was the 2006 acquisition of Pennant Foods, based in Northlake,
IL. The company supplies bakery products
to restaurant chains, in-store bakeries in
supermarkets and other retailers, as well
as to food service companies. Its products

BAKING & SNACK / July 2010

include muffin batters, cookie dough, icing,
puff pastry and croissants.
In 2009, Pennant acquired the frozen
dough manufacturing business of General Mills, Inc., with facilities located in
Bakersfield, CA; Hazleton, PA; Vinita, OK;
and Montreal, QB.
Fresh Start's most recent baking acquisition was in 2007, with the purchase
of Sweet Life, a cookie and sweet goods
bakery in Santa Ana, CA.
Great Kitchens, Inc., Romeoville, IL, was acquired by Aryzta for $180 million. The company is the largest manufacturer of Take &
Bake pizzas and supplies pizza and appetizers with a focus on the deli segment in the
North American retail grocery channel.
Fresh Start Bakeries and Great Kitchens
have combined annual revenue of $1.03
billion, with EBITDA of approximately $133
million. The transactions are expected to be
accretive to earnings in excess of 45¢ per
share over 12 months.
"(The transactions) result in the group
maintaining a more balanced exposure to
the core markets of North America and Europe, while extending its geographical footprint in the rapidly expanding rest of world
segment," Aryzta said. "Meanwhile, greater
diversification in terms of customer mix
enhances the defensive characteristics of
the group's business model."
In addition to Fresh Start and Great Kitchens, Arzyta's main US brands are Otis Spunkmeyer and La Brea Bakery. The company
also sells freshly baked bread and pastries
under the Delice de France and Cuisine de
France brands in Europe.
In a third-quarter trading update issued
along with the acquisition announcement,
Aryzta said like-for-like sales in its Food
North America unit fell 5.4% to €135.6 million ($161.7 million) in the quarter ended
April 30. Overall, total sales at Aryzta fell
6.1% to €822.9 million ($981.8 million).
"Food North America experienced the
impact of continued weak economic conditions across most channels compared with
the prior year," Aryzta said. "However, a continued focus by customers on value propositions is driving consumer footfall and creating an environment to stimulate revenue
growth. The implementation of SAP ERP
in Otis Spunkmeyer is progressing to plan,
and this initiative has now been extended
to La Brea Bakery."

FDA, NIH launch
reporting portal
The US Food and Drug Administration
(FDA) and the National Institutes of
Health launched a new Safety Reporting
Portal Website designed to provide greater and easier access to online reporting.
When fully developed, the site will provide a mechanism for the reporting of
pre- and post-market safety data to the
federal government.
"The portal will be a key detection tool in improving the country's
nationwide surveillance system and
will strengthen our ability to protect
the nation's health," said Margaret
A. Hamburg, FDA commissioner.
"We will now be able to analyze human and animal safety-related events
more quickly and identify those measures needed to protect the public."
The site's reportable food registry
will provide a more user-friendly electronic portal for submitting food reports required by law. The portal collects reports from the food industry
and public health officials regarding
problems with articles of food, including animal feed, that present a reasonable probability of causing serious adverse health consequences or death to
humans or animals. FDA sees this is a
first step toward a common electronic
reporting system that will offer 1-stop
shopping, allowing an individual to
file a single report to multiple agencies
that may have an interest in the event.
In the meantime, the new portal redirects individuals who want to submit reports about other products regulated by FDA, the US Department
of Agriculture, the Environmental
Protection Agency or the Consumer
Product Safety Commission to the
appropriate contact.

Baking & Snack - July 2010

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