In its Q4 2022 Earnings Report last week, TreeHouse Foods President/CEO and Director Steve Oakland revealed a year-over-year growth rate of approximately 24%.
Sales hit $996.2 million, largely due to price increases. Volume was down 2.2% compared to a year ago.
Retail demand for private label products has been up for the last 54 consecutive weeks, CEO Steve Oakland said on the earnings call. Oakland and Vice President and Comptroller Patrick O’Donnell both said supply chain challenges constrained the company’s sales.
Oakland added that the food processing company might look to M&A to enhance its capacity for future growth.
O’Donnell said that in the last quarter, TreeHouse saw lingering supply chain and service constraints in about half of its categories. The company indicated expenses increased $35 million compared to the prior year due to supply chain issues.
But acquisitions in tandem with improving the existing supply also could help. In response to a question, Oakland said more manufacturing capacity is what the company is looking at when it comes to M&A.
Due to inflation not letting up, private label is likely to be a go-to for consumers. TreeHouse said it plans more pricing increases this year with net sales growth of 6% to 8% driven by pricing.
Oakland said that it's a great time for private label and that the company is prioritizing. The small amount of business TreeHouse lost was its national branded co-pack business. He added that the company is trying to repurpose that capacity as fast as it can to private label.
When asked about capacity, Oakland said that the company needs to be able to sell more and that the demand is there. “So, if the assets are there, we'll use M&A to do it. And there's a couple of places I think you may see us do that.”
In October 2022, the food processing company sold a significant portion of its Meal Preparation business to Investindustrial. The divested business was renamed Winland Foods Inc.