Universal Foods Restructuring, Plans to Divest Red Star Yeast

Universal Foods Corp. may sell its Red Star Yeast & Products division and last week retained Salomon Smith Barney "to assist in exploring strategic alternatives." As the company's Color and Flavor businesses have expanded, Kenneth P. Manning, CEO indicated in a statement last Friday that Red Star may no longer fit Universal's strategic direction.

And yet Red Star is still a force in baking as a leading supplier with 1999 revenues of $140 million, approximately 350 employees and manufacturing operations in Baltimore, Milwaukee and Oakland.

According to Manning, the strategic re-thinking of Red Star's future is "the next logical step toward focusing our business in those areas offering the highest rates of growth in revenue and profits. We also recognize that Red Star's prospects for worldwide leadership in yeast can be best maximized through a combination with another business where it will be part of a core global strategy."

Universal said it plans to combine its Dehydrated Products division (dehydrated onion, garlic and chili ingredients) with its Flavor division.

Finally, Universal Foods said it is using Corporate Branding Communications, LLC, New York, to develop a new corporate name and identity that will better reflect the direction of the changing structure and image of the company.

Based in Milwaukee, WI, Universal Foods employs approximately 4,200 people in 21 countries around the world. Total revenues for the fiscal year ended September 30, 1999 were $920 million.

Edited by Bob Sperber