Consumers are not trading down to “lesser” brands despite commodity costs leading to price increases, according to Sara Lee’s top executive in North America.

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Speaking at the Consumer Analyst Group of New York conference yesterday (19 February), CJ Fraleigh, Sara Lee’s COO in North America, said the US food giant’s “strong brands” protected the business from any fall in consumer demand as prices rise. 


“Our strong brands are a true asset, especially in this challenging commodities environment,” Fraleigh said. “We are aggressively monitoring the effect of pricing on consumer behaviour and thus far have not seen consumers trading down to lesser brands.”


Chairman and CEO Brenda Barnes said the company has reviewed plans to expand operating margins, drive top-line growth across the business and grow in emerging markets.


“We have taken appropriate pricing actions and have made significant investments in marketing and innovation in the first half of the year,” she said. “These ongoing commitments to our brands, as well as our achievements in continuous improvement, are expected to benefit top- and bottom-line growth. Fundamentally, we are well positioned to deliver our plan with a very strong second half.”  

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Two weeks ago, Sara Lee reported a dip in first-half profits as higher commodity costs offset a rise in sales.


The company, maker of brands including Sara Lee bread and Hillshire Farm meats, booked underlying operating income of US$440m, a fall of 0.7%, for the six months to 29 December. Underlying net sales rose 4.3% to $6.6bn.