Quaker will keep the Aunt Jemima name in syrups, corn products and pancakes.
The company said the sale was aimed at helping to refocus on its core business. William Smithburg, chairman, president and CEO, said in a statement that "though frozen foods is a good business, it is not a good business for Quaker Oats Co."
Indeed not. According to Information Resources Inc., Quaker's share of the $526.2 million frozen waffle category in food, drug and mass merchandisers fell 15.1% for the 52 weeks ended Jan. 28. Its 8.8% share trailed leader Kellogg Co., with 68.4%, and Grand Metropolitan's Pet, with 16.5%. Private label weighed in at 4.8%.
5% SHARE FOR CELESTE
Quaker's Celeste business held 5% of its $1.6 billion category, IRI reported, well behind leader Tony's pizza (24.2%), marketed by Schwan's Sales Enterprises; Kraft's Tombstone (22.3%); and Pillsbury Co.'s Totinos (14.9%).
The share losses can be attributed to Quaker's minimal ad spending on the lines. Spending on both products was so low it didn't register in Competitive Media Reporting for the first nine months of 1995. Jordan, McGrath, Case & Taylor, New York, is agency of record on the Aunt Jemima brands.
NO EASY SALE
Selling Aunt Jemima and Celeste might not be easy.
Merrill Lynch & Co. analyst William Maguire said "there aren't too many people in foods that would be interested in those businesses. They have no leading shares, sales are under $200 million and they are not profitable."
He added, "Nobody I know wants it." As remote possibilities, Mr. Maguire mentioned Unilever and Grand Met.
Quaker needs to sell the businesses to focus more on its ailing Snapple unit, acquired in 1994 for $1.7 billion. With Snapple, Quaker has faced problems in distribution, ad strategy and corporate cultures. It will soon break new Snapple ads via Kirshenbaum Bond & Partners, New York.
IRI said Snapple sales in food, drug and mass merchandisers for the 52 weeks ended Jan. 28 were $238 million, down 13%.