By Garland Pollard
Our BrandlandUSA reader “JM” tells us that Colonial Bread is on deathwatch, and it may be in danger of disappearing due to its ownership by Sara Lee (NYSE: SLC).
Writes our dear reader:
Colonial, one of the South’s well known bread names, is now owned by Sara Lee.
Since Ms. Lee invaded the Colonial colonies, Sara Lee Bread has been appearing alongside – and displacing – Colonial as their primary brand (uh-oh).
Guess which line is getting more and more shelf space? Customer re-education is underway. Tonight, at the local Publix (still doesn’t seem right; it is located in an old Winn-Dixie – The Beef People left Atlanta), the Sara Lee bread was marked at a price lower than the Colonial loaves. Colonial is also getting somewhat harder to find. Most of the time, the Colonial King Thin can be found, but Colonial Old Fashion is getting hard to find at Publix or our Kroger stores.
We can see how. Sad things Sara Lee has done as it has grown its bread empire:
- In 2002, Sara Lee closed a Memphis, Tenn. bakery open since 1930, according to the May 18 Commercial Appeal (See Sara Lee to Close Bakery in Memphis)
- Closed a bakery in DeKalb County, Alabama
- Closed bakeries in Albuquerque, Chattanooga and Chicago
Frankly, we are ripping sick of these great old Southern brands going bye-bye. These companies, with their so-called marketing and branding “experts,” know nothing of regional traditions. They not only cannot understand the value of regional brands, but haven’t a clue how to extract the value in them. (Sara Lee is also selling off many of its non-food brands.)
They see regional brands as a liability, and the reality of the rebirth and success of a mayonnaise like Duke’s totally misses them. These companies do tricks that make readers think they are generous, then lay off workers in places like Alabama and give away money on national TV shows like Ellen to show off how great they are. This sort of business practice, which has become deeply rooted in American business, needs to stop.
White bread is a low margin, near commodity staple that provides regular, but meager returns. While there is money to be made in bread, we fail to understand how it can provide the long-term ROI that Sara Lee desires, except by one-time layoffs and cuts.
Sara Lee has three choices. It will likely choose number three:
- License the Colonial bread name as an exclusive “in house” brand to certain grocery retailers
- Use the Colonial Bread brand as a specialty brand next to Sara Lee
- Continue to alienate potential customers
In the old days, the federal government would be on Sara Lee like a hawk, making sure that there was no bread monopoly. Local pressure and a sense of decency would not allow C-suite folks to just lay off workers, willy nilly, when bakeries are purchased. Those days are over, and its now officially O.K. for large companies to fire long-term employees for a quick increase in profits.
In the old days, companies would be shamed that a CEO would make $15 million when it was underperforming, as Crain’s reported Sept. 17. Crain’s said that Sara Lee Corp. CEO Brenda Barnes’ compensation jumped 60% to $15.2 million for fiscal 2009 despite a 20% drop in the company’s stock price. The increase was due to $8.3 million’s worth of stock awards, compared with $3.4 million the previous year. That money would pay a lot of bread workers.
Strangely, Sara Lee, I think, believes that Jimmy Dean, the founder of its sausage brand, is not around. You can find nothing about him on the Jimmy Dean sausage website, which I think is weird, especially since the logo has his boots on it. Even more sad, Dean’s house burned down recently, with much of his life’s work. I hope that was of concern to the company that is doing so well by his name.
We believe in capitalism, but it doesn’t work when shame no longer has power over a society.