GREEN GIANT ENTERS ALLIANCE WITH SENECA FOODS FOR PROCESSING OF ITS CANNED VEGETABLE LINE
Green Giant to retain brand ownership, marketing, technology rights; Long-term agreement releases significant funds and emphasizes quality MINNEAPOLIS, Dec. 8 /PRNewswire/ -- Pillsbury, a subsidiary of Grand Metropolitan PLC (NYSE: GRM), announced today the signing of a long-term agreement that will make Seneca Foods Corporation (Nasdaq-NNM: SENE) the primary processor of the Green Giant line of canned vegetables. Ownership of the Green Giant brand, including all sales and marketing responsibilities, and rights to proprietary variety seeds will remain solely with Pillsbury. Relationships with Pillsbury's customers are unchanged. The transaction will reduce fixed and working capital by some $268 million. The agreement is subject to regulatory and other approvals. The transaction calls for the closing of four Green Giant plants over the next 18 months, and the sale for $72 million of six Green Giant production facilities to Seneca. Approximately 425 employees will be affected by the four plant closings. It is anticipated that some of these employees will work in Seneca-owned plants. A leading, publicly traded processor of vegetables and fruit with headquarters in Pittsford, N.Y., Seneca had sales of $290 million in the fiscal year ended July 1994. The company owns 16 processing plants throughout the country. Making the changes associated with the alliance, including the closing of the four seasonal canning facilities, will result in a one- time charge of $66 million -- $30 million in cash and $36 million in asset write-offs. These costs will be included in GrandMet's 1994-95 accounts. The estimated savings to Pillsbury, when the agreement is fully implemented, will be approximately $32 million a year. Seneca will assume full responsibility for Green Giant processing and related inventory, reducing Pillsbury's net working capital by $160 million. As a result of the Green Giant-Seneca alliance, Green Giant will also significantly reduce the amount of the assets it employs in seasonal production. This initiative follows the redesign of Green Giant's frozen production capacity, which was begun last year and implemented effectively by using processing and distribution partners. Pillsbury officials said that the agreement with Seneca will enable Green Giant to accelerate its progress in the North American vegetable industry by enhancing overall competitiveness and strengthening customer service. Over the last two years, Green Giant has widened its market leading position in the frozen segment and has closed the gap between it and the number one player in the shelf-stable vegetable business. "Green Giant is a healthy and growing business, and the actions we are announcing today will continue to strengthen our position in the market," said Paul S. Walsh, CEO of Pillsbury. "More than ever we are in a position to concentrate on product development and marketing and let our processing partners do what they do best. We will also enhance our status as the industry's low-cost producer. "We are committed to a direction that will make Green Giant more market-driven and a bigger contributor to shareholder value. Green Giant is a great brand that we can make even greater," he said. Kraig H. Kayser, President and CEO of Seneca Foods, commented: "We are enthusiastic about this alliance and about our involvement with Green Giant. The quality of the company and its people is outstanding." The production facilities that will close are located in Ripon, Wisc.; Beaver Dam. Wisc.; Hoopeston, Ill.; and LeSueur, Minn. Although production in LeSueur will end, Green Giant will maintain facilities dedicated to biotechnology, variety seed development, and agricultural services in that community and in the company's major technical facility in Minneapolis. Another facility in Belvidere, Ill., will cease seasonal production only. Facilities being sold to Seneca are located in Mayville, Wisc.; Dayton, Wash.; Buhl, Id.; Glencoe, Minn.; Montgomery, Minn.; and Blue Earth, Minn. Agricultural operations based in Ripon and Belvidere will also be transferred to Seneca. Seneca plans to invest approximately $50 million in integrating facilities, and will add a Green Giant executive to its Board of Directors. In order to maintain brand integrity, stringent requirements have been written into the agreement. These include policies for the maintenance of Green Giant quality standards; and guidelines governing the use of proprietary variety seeds, as well as production technology. At the close of this agreement, Green Giant will operate 9 facilities, down from a current base of 19. Pillsbury, a North American-based subsidiary of Grand Metropolitan PLC, produces a range of grocery items, frozen foods, and refrigerated dough products for international consumer markets. The company is also a major supplier of baking and other food products to the U.S. foodservice and commercial baking industries. The Pillsbury portfolio of marketing-leading brands includes Pillsbury, Green Giant, Hungry Jack, Martha White, Aunt Nellie's, Jeno's, Totino's, Pappalo's and Haagen-Dazs. Other US subsidiaries of GrandMet include Burger King, Carillon Importers, Heublein, the Paddington Corporation, and Pearle, Inc. Started in 1869 as a Minneapolis-based flour miller, Pillsbury has evolved into a multinational food company with annual sales of approximately $4 billion and 16,000 employees worldwide. Pillsbury has a strong portfolio of consumer food brands and provides a wide range of baking products to food service outlets and bakeries. Although sales are predominantly concentrated in North America, Pillsbury products are sold throughout the world. PRODUCTS: Flour; baking mixes; prepared dough products; fresh, frozen, and canned vegetables; superpremium ice cream and frozen yogurt; side dishes; frozen pizza and pizza snacks; toaster pastry. TRADEMARKS: The Pillsbury Doughboy and the Jolly Green Giant are two of America's most familiar and best-loved symbols of quality, good taste, and value. DETAILS OF MAJOR CONSUMER BRANDS: Pillsbury Prepared dough products, baked goods, flour, baking mixes, and specialty potatoes. Pillsbury is the U.S.A. and Canadian market leader in refrigerated prepared dough products, and holds the number two position in desserts and baking mixes with its Pillsbury and Martha White brands. Pillsbury's Hungry Jack brand leads the U.S.A. microwave pancake market. Hungry Jack holds a strong brand franchise in instant mashed potatoes, biscuits, pancake mix, and syrup as well. Green Giant Pillsbury is the world's largest processor of branded vegetables, and holds the number one brand in the U.S.A. and Canadian markets with more than 100 Green Giant fresh, frozen, and canned vegetable products. Pillsbury's Aunt Nellie's brand is the U.S.A. market leader in glass-jar packed vegetables. Aunt Nellie's also produces deli-style salads, sandwich and spaghetti sauces, and glace fruit. Haagen-Dazs The world's leading maker of superpremium ice cream and frozen yogurt products. Haagen-Dazs combines an extensive retail and foodservice presence with an international network of distinctive Haagen-Dazs shops. Jeno's The leading economy-priced frozen pizza in the U.S.A. Pappalo's The fastest growing brand of frozen pizza in the U.S.A. Totino's The number one brand of frozen pizza and pizza snacks in the U.S.A. Pillsbury's fast-growing food service business provides quality food products to the in-store/retail baker, foodservice and wholesale bakery markets. Pillsbury Bakeries & Foodservice, Inc. is a leading U.S. producer of bakery mixes, flour, dehydrated potatoes, and frozen pre- baked and unbaked dough products (Pillsbury branded). With the acquisition of Roush Products Company and Roush's market-leading brand Country Hearth in 1993, Pillsbury Bakeries and Foodservice became the leading producer of specialty and varietal bread concentrates for the U.S. wholesale bakery market. In 1994 Pillsbury Bakeries and Foodservice also acquired Rudi's Foods, Inc., the leading manufacturer of partially-baked breads and rolls for restaurants and other foodservice customers. Pillsbury is a subsidiary of Grand Metropolitan PLC. -0- 12/8/94 /CONTACT: Terry Thompson of Pillsbury, 612-330-4768; or Devra Bevona, of Seneca, 716-383-4603/ (GRM SENE)
CO: Grand Metropolitan PLC; Pillsbury Pills·bur·y , Charles Alfred 1842-1899.
American manufacturer who founded (1869) C.A. Pillsbury and Company, one of the largest flour-milling enterprises of the 19th century. ; Seneca Foods Seneca Foods Corporation is a food processor headquartered in Marion, NY, USA. The company is a leading producer and distributor of canned vegetables. In addition, the company offers frozen vegetables, fruit and chip products, steel cans, and an air charter business. Corporation ST: Minnesota Minnesota, state, United States
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