OAK BROOK, ILL. — A seasonal business, refrigerated dough was challenged during COVID as focus shifted from a multitude of offerings to a strategy of only producing the top one or two items. Now, TreeHouse Foods, Inc. believes it has done “a bit more maintenance” to bring its CapEx spending close to a 50/50 split between growth and maintenance in the category, said Patrick M. O’Donnell, chief financial officer at TreeHouse.
“As we catch up, you’ll see us pivot a little bit more to growth over time (in dough),” Mr. O’Donnell said during a Sept. 19 presentation at the TD Cowen Sipping & Snacking Summit.
“I think about the service improvements year-over-year, dough is one of those categories where we said, ‘Hey, we can now service the demand that exists,’” Mr. O’Donnell said. “Dough is a great example of that. That was a category certainly last year, and I would say maybe for a couple of years where you were capacity constrained. And so that’s a part of how we think about the back half of the year in terms of investments that we made to help secure us.”
TreeHouse’s main competition in the refrigerated dough case is General Mills, Inc.’s Pillsbury brand. And despite the strong name brand recognition of Pillsbury, TreeHouse continues to have a nice advantage with its private label products in the category, Mr. O’Donnell said.
“We’ve got good assets, and we’re able to compete effectively in that space,” he said. “And so it’s really a matter of keeping product on shelf. We’ve had some customers who were frustrated they couldn’t get all the product in the past, and now we’re trying to secure that production for them this year.”
Steven T. Oakland, chairman, president and chief executive officer, added that TreeHouse has been able to refill many of the refrigerated dough assortments that were scaled back during COVID and now expects “people’s favorite items will be back on the shelf this season.”“That will be good,” he said.