Ralcorp Holdings Inc., St. Louis, has initiated a strategic restructuring of its business “to improve organizational effectiveness and reduce costs.” As part of the effort, the company will consolidate its cereal, pasta and snacks, sauces and spreads businesses into a single center-store, private-brand food company. Ralcorp says the initiative should generate annual pre-tax cost savings of approximately $26 million to $31 million in fiscal 2013. The savings will be incremental to the company’s ongoing accelerated cost-reduction programs.
The strategic restructuring is expected to be complete by fiscal 2014.
“Overall, we continue to be impacted by the Bloomfield transition as well as a challenging operating environment, with higher year-over-year commodity costs and lower volumes,” says Kevin J. Hunt, CEO and president of Ralcorp. “However, we remain confident in our business strategy and believe that we are well-positioned to compete and seek opportunities to grow despite the challenging environment. We believe the actions we are taking, both with respect to Bloomfield and the strategic restructuring, will result in a leaner, more cost-efficient operation that is more appropriately structured for sustainable, long-term growth.”