Farmer Bros. buys Sara Lee’s coffee business

DOWNERS GROVE, Ill. Farmer Brothers Company is acquiring Sara Lee Corp.’s U.S. Direct Store Delivery Foodservice coffee business for $45 million. The deal, which is expected to close in the beginning of 2009, will provide the coffee, tea and spice foodservice manufacturer with more than 20,000 more customers, Sara Lee’s Foodservice DSD coffee business sales and distribution staff, 60 “branch” facilities, a major Houston manufacturing plant and an Oklahoma City distribution and spice facility.

Purchased brands include Superior Coffee, Cain’s, Ireland, Justin Lloyd, McGarvey, Metropolitan, Prebica, Suntipt [U.S. only], Wechsler, Cafe Royal and Royal Kona. The two companies have agreed on a reciprocal co-pack plan for the supply of certain coffee and tea products.

“We are pleased to announce the sale of our Foodservice DSD coffee business, which is consistent with our commitment to simplifying our business to focus on areas where we have a clear, sustainable point of difference and can leverage our scale,” said C.J. Fraleigh, chief operating officer of Sara Lee Corporation in North America. “We remain committed to growing our Foodservice beverage business, with its leading liquid and roast and ground coffee positions, through our strong national sales force and distributor network.”