SARA LEE BUYS COFFEE FROM NESTLE.

Byline: Suzie St. John Staff Writer

Nestle USA Inc. committed to the company's new Nescafe coffee line Monday by announcing the sale of its Hills Bros., MJB and Chase & Sanborn coffee brands to Sara Lee in a deal that includes the sale of Nestle's coffee plant in Suffolk, Va.

Terms of the sale were not disclosed, but the purchased assets have combined annual sales of about $280 million, according to Sara Lee.

``Upon careful review of our coffee brands in the U.S. market, we determined that it is best to focus our efforts and resources toward the long-term growth of our new premium line of Nescafe, in both retail and food service channels, as well as Taster's Choice, one of the leading brands of instant coffee in America,'' Joe Weller, chief executive officer of Glendale-based Nestle USA, said in a statement.

The new Nescafe line was launched earlier this fall across the West Coast, including Los Angeles, San Francisco, San Diego, Sacramento, Denver, Phoenix, Salt Lake City and Boise, Idaho.

``The line was designed to deliver a new coffee experience,'' said Terri Haywood, communications manager for Nestle's beverage division.

The product line offers 20 different coffee beverages in a variety of flavors and textures, including gourmet whole bean and ground coffee, gourmet instant coffee, Nescafe Frothe specialty coffees and frozen coffees.

Haywood said the line is targeting younger coffee drinkers ranging in age from 25 to 34.

``The last statistics we have about coffee trends shows an increase in younger coffee drinkers,'' Haywood said. ``We have an ad campaign out with commercials being directed by (actor and sitcom director) Michael Lembeck. They are nontraditional, looking more like a sitcom.''

In addition to being sold in retail locations, Haywood said Nescafe is being sold at college campuses, restaurants, hotels, movie theaters and self- and full-service coffee bars nationwide.

``We're very committed to seeing the success of this brand in the United States,'' Haywood said.

Sara Lee has long been a competitor of Nestle in Europe, where it sells coffee and tea under the Douwe Egberts, Marcila, Merrild and Pickwick brands. Monday's acquisition adds three well-known brands to Sara Lee's Chock Full o' Nuts, which the company bought in October to enter the domestic market.

``Sara Lee is in a leading retail position all over the world, so it's logical that we would want to expand in the U.S.,'' said Jeffrey Smith, director of media relations for the Chicago-based Sara Lee Corp.

Smith said Sara Lee is offering to hire the 210 employees at the Suffolk plant in the same capacity or in comparable jobs.

``The employees were notified of the sale (Monday) and senior management was on site to meet with the employees,'' Smith said. ``We plan to continue operating the plant in its current location. It allows us to be able to better balance production between retail and food service.''

He said there are no immediate plans to change the three purchased brands.

``It's a little early to detail a broad marketing plan but packaging and roasting quality are things we'll be evaluating,'' Smith said.