Wessanen continues to prune Tree of Life
of Life North America (TOL NA) subsidiary, earlier attempts to turn
around the beleaguered company's fortunes may be coming to
fruition: it has recently signed distribution agreements with
several new customers.
When reporting its 3Q results in November 2004, the company said it needed to raise $15 million in a bid to offset falling sales of low carb products, in addition to savings of $45 million it has aimed to make since the "Build on the Roots" restructuring program was initiated in 2003.
The latest consolidation sees TOL NA's northeast, southeast distribution operations and corporate headquarters merged into one coordinating office in St Augustine, Florida.
Wessanen's director of corporate communications, Timo de Grefte, declined to comment on how many employees have been made redundant as a result.
"We are still studying whether or not this is the end in terms of redundancies," said de Grefte. The company currently employs about 4500 people in North America.
Nor is this the only consolidation to have hit Wessanen's US workforce. In December 2004 the company combined its two facilities in California into one in Los Angeles and closed its secondary facility in Texas, meaning that it now has only two facilities in the state.
While TOL NA's distribution facilities are trimmed back however, its purchasing function has been split out into three entities: category management, vendor management and inventory management. This strategy is aimed at improving supply chain management, product assortment, gross margin and service level, said the company.
The full savings impact of both these measures will be announced with Wessanen's full year results in March.
President and CEO Alec Covington said: "Our new, more streamlined organization allows us to put our best people in leadership positions close to our customers, and extend one consistent set of best practices across the company. It also creates synergies that help us improve customer service and allows us to take all unnecessary costs out of our operations."
The new clients who are set to benefit from TOL NA's touted new efficiency include Penn Traffic Company, which operates 109 natural and specialty supermarkets in four states, and 30 Coborn's stores in Minnesota, North Dakota and South Dakota.
From 2Q 2005 they will also be able to benefit from TOL NA's new Smart Assortment marketing service, which uses data from several sources to determine optimal product assortment, by category, for individual retail store locations.
In full year 2003 Wessanen reported operating losses of €51.2 million across all its divisions - a severe turnaround from profits of €125 million in 2002. Sales fell by 14.7 percent to €2.4 billion and exceptional costs, mostly generated by TOL NA, were inflated by €57.1 million.
In Europe, the group has announced that, from the fall, its Dutch headquarters and BOAS, Beckers Holding non-production offices will be combined into one, located in Utrecht.
Last month its sold its German Gelderland Frischwarengesellschaft private label business Balvers Group for an undisclosed cash sum. It said the divestiture was part of its strategy to focus on health and premium taste brands.
