About Steven Oakland
Steven Oakland, President, CEO, and Chairman of TreeHouse Foods, appeared on CNBC's Mad Money in September 2016 and September 2017 to discuss the company's performance and strategy. In 2016, he addressed the acquisition of ConAgra's private label business for $2.7 billion, describing it as a "transformative event" that would double the company's size. He stated that TreeHouse focused solely on customer brands and custom products, and that the acquisition would yield economies of scale, address overengineering in packaging, and simplify operations—citing a reduction from 56 container types to four. He noted that the company was a "favored strategic buyer" in a competitive auction and that retailers had led the emergence of strong private label brands to differentiate themselves from competitors like Walmart and Amazon.
In 2017, Oakland reported a quarterly earnings beat and strong full-year guidance, attributing momentum to a renewed focus after the ConAgra carve-out. He stated that private label penetration in the U.S. was 18%, half that of some Western European countries, indicating a "long runway" for growth. He said 20% of TreeHouse's legacy private label offerings were "better for you, natural or organic," growing at a 30% clip. Oakland argued that millennial consumers are "relatively brand agnostic" and have higher preferences for private label than their parents, driving demand for healthy, convenient products. He emphasized that TreeHouse had shifted its industrial base to anticipate market trends and work closely with retailers to develop brand architecture for younger consumers.
Source: AI-verified profile updated from Steven Oakland's recent appearances.
Browse all interviews →
Transcript (13 segments)
J
Jim Cramer0:06
We've got a lot of big-name earnings reports this morning, including those hideous numbers from Twitter, so you might have missed the fabulous quarter from TreeHouse Foods, the king of the private label packaged food business. TreeHouse has a long track record of making smart acquisitions, but their streak seemed to run out last quarter when they had a rare miss, and the stock fell from 86 to 63 in seven sessions. This morning though, TreeHouse reported a terrific 5-cent earnings beat off of a buck-09 basis, with higher than expected revenues up more than 105% year-over-year thanks to some of those acquisitions, and it came with strong full-year guidance. In response, the stock shot up $9.36, more than 12% today, although it's still down nearly 20 points from its highs last July when it traded at 104, which is why I think this stock may have more room to run. But do not take it from me, let's check in with Sam Reed, the Chairman and CEO of TreeHouse Foods, to find out more about the quarter and his company's prospects. Mr. Reed, welcome back to Mad Money.
S
Steven Oakland0:58
Jim, it's great to be back with you, and especially on the occasion of establishing such strong momentum coming out of 2016 that we're highly confident will carry all the way through 2017 and beyond.
J
Jim Cramer1:14
I want to talk about that, Sam, because I know some of the analysts were kind of in disbelief that you could have a kind of a light quarter. You had some problems with a full flagstone, they were all just kind of like, I visited Anna, it was horrible for that little company. But it just seems like not only did you pull out of it, but you're back on, you're ahead of where you were or where anyone thought you could be in three months. How does that happen, Sam?
S
Steven Oakland1:38
We were overly focused on this corporate carve out from ConAgra. Once we realized that that was taking people away from their day jobs, we got that group back and in a fury they went about their business. In both the go-to-market, by the way, our core legacy business was up 3% in the fourth quarter, and the private brands from ConAgra went from a great deficit to actually posting a gain. We're very pleased with both aspects of the business.
J
Jim Cramer2:15
Let's talk about that because I know you paid a lot of money for these, this Ralcorp branded, you know, the private label business, but it was still much less than ConAgra paid. It did seem to have some speed bumps when you got in there, discovered it just wasn't as well run as you would have liked. That was the problem?
S
Steven Oakland2:32
Well, ConAgra had attempted to combine their branded businesses with the private label, and I think Jim, you and I both know from our experiences that that is not a combination that works well. We've dedicated ourselves only to customer brands, and having that sole focus is absolutely critical to succeeding here. And by the way, I'd like to point out that there are still great brands in food; they used to be owned by manufacturers, and now they're owned by our retail customers.
J
Jim Cramer3:11
Well, let's talk about that because there was an astounding figure that you put in all your data, which is private label penetration in the United States is at 18%. That's half of some Western European countries. That to me says that your stock has a very long runway ahead of it.
S
Steven Oakland3:30
That is correct. And there are markets in the United States that are in the high 30s, demonstrating that in metropolitan areas there is great upward potential. I was particularly pleased that in our legacy business, now 20% of our private label offerings are better-for-you, natural, or organic. These are premium products that sell at a 10 percentage point gain over the average. And we have 20% of our business growing at a 30% clip now. So private label has become the place where people looking for health and wellness can go and find products that offer them value, Jim, but without any compromise at all with regard to food quality, food safety, or convenience.
J
Jim Cramer4:26
In the time since I've known you, you've made so much money for people. I just want to address something that you said on the call, which is this is how much you've had to change. From a consumer perspective, we know through internal research that millennials are the coming economic power, and their motivation for buying these products, while value is still part of it, it's a very different consumer. You're talking about the idea that you can't be in the pantry anymore, you gotta be in a lot of other places. Can you still make money if you're not in the pantry?
S
Steven Oakland4:51
We do, we very definitely can. It requires a closer cooperation with the retailers that own their brands. While we used to be charged with lowest landed cost of the national brand equivalent, now we're asked to develop brand architecture to meet the demands of not the baby boomer generation, but in fact the millennial generation, whose interest in value is incorporated with better-for-you, healthy products and a totally different lifestyle in which convenience is everything and in-home preparation of meals is quite different. That's why we have changed our industrial base to really focus on where the market is going and try to anticipate that.
J
Jim Cramer5:42
Well, Sam, I know you're back, and I think this stock is going to have a big run because when you get it right, you get it right big. Sam Reed, Chairman and CEO of TreeHouse, it's great to see you, sir, and congratulations for the turn. It was not going over there because you've made so much money for people. Terrific job.
S
Steven Oakland5:55
Thank you, thank you, Jim.
J
Jim Cramer5:59
Absolutely. TreeHouse Foods, this thing has so far to run, and Sam Reed is a fabulous moneymaker. I've known it for years. Everybody's back into it. Oh yeah, Jim Cramer here from Mad Money. Thanks for watching. See me on YouTube, click here to subscribe and get the jump on my exclusives with CEOs, plus market news, investing advice, and a whole lot more.
