OAK BROOK, ILL. — While crackers, pretzels and broth are three major categories where private label is strong and the opportunity to earn great margins long term is ripe, cookies is not a category to be slept on, said Steven T. Oakland, chairman, president and chief executive officer of TreeHouse Foods, Inc.
“We’re in the cookie business,” Mr. Oakland told analysts during a Sept. 19 presentation at the TD Cowen Sipping & Snacking Summit. “We make amazing cookies. We think we can make more of them, and we need the capacity to do it.”
TreeHouse Foods operates two core cookie facilities in South Beloit, Ill., and Tonawanda, NY, as well has a third plant in Princeton, Ky., that makes fruit bars and wafers, according to the 2023 Directory & Buyers Guide published by Sosland Publishing Co. But Mr. Oakland said TreeHouse is capacity constrained on cookies.
“We make a great product, and we sell every one we can make,” he said. ”So, there’s opportunities for us to build capacity and sell more.”
Using an example of his own experience struggling to find a certain private label sandwich cookie on shelves in July and August, conference moderator and TD Cowen analyst Robert Moskow asked Mr. Oakland for insight into sourcing issues when retail partners change suppliers.
“Changing private label from one vendor to another in a larger category is not easy, right?” Mr. Oakland said. “They require sensory. It requires all those things. But it also requires a lot of coordination in the supply chain. And so that’s why if you’ve got good service and you’ve got great quality, those relationships can be sticky, right? … But in that particular category, there was a lot of disruption, and there were some ingredient issues that happened.“Our cookie — we actually invested a lot of maintenance capital in our (system). We talked about some extra maintenance capital we put into our system across it. We did that in our cookie business to really solidify that supply chain for the back half of this year. We feel that that’s one place where we will ship significantly more. We’ll be in a lot better shape this year than we were a year ago. Last year, we had ingredient and packaging disruption in that particular segment.”