‘We’ve been shackled’: Inside the plans to serve Sara Lee cake to a new generation

When Brooke and Klark Quinn found out that Sara Lee had slid into administration, they – like thousands of other Australians – rushed to the supermarket to pick up one of the long-standing brand’s frozen desserts.

They liked the apple crumble so much — and the fact it kept the kids at the dinner table for another 20 minutes — that they decided to consider buying the business.

“That was when we thought, okay, maybe we might have a sneaky look, throw our hat in the ring, thinking that obviously there would be a lot of interest,” said Brooke Quinn.

She was right. Four months after the company was handed to administrators, the Quinns – who saved struggling chocolate maker Darrell Lea in 2012 – beat about 70 other interested parties for the cake business. This week, they officially took the keys to the Central Coast production facility as the new owners of Sara Lee.

Sara Lee’s new owners are determined to modernise the dessert brand’s product offerings.
Sara Lee’s new owners are determined to modernise the dessert brand’s product offerings.Credit: Getty Images

”It’s been business as usual,” Klark Quinn said, adding the conclusion of the administration process had removed uncertainty about the future. “From our side, we’ve been champing at the bit to try and get going.”

‘A very different scenario’

While the husband-and-wife duo are credited with reviving Darrell Lea, the new gig is by no means a copy-and-paste job. For one thing, few changes need to be made to Sara Lee’s products, which are well-established and beloved, or its production facility, which is operating with capacity to spare.

They also do not expect to need to make the severe job cuts that were deemed necessary at Darrell Lea. On the contrary, Klark Quinn is quick to pay tribute to the passion, long service and loyalty of Sara Lee’s 200 employees, many of whom have worked there for decades, and all of whom have retained their jobs.

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“[We’re] not changing product quality. All of our favourites are still going to be in the supermarket … It’s actually growing the offering into more formats in more channels.”

Sara Lee co-owner Brooke Quinn

So how will they fix the business? While the Quinns have made headlines (Klark is a former race car driver and three-time Australian GT champion), the person with a plan and the operational experience to bring Sara Lee into the future is the business’s chief executive, Mark Mackaness.

Appointed to the top job in August 2021 after New Zealand private equity firm South Island Office purchased the Sara Lee brand from McCain, Mackaness has been sitting on a “strategic road map” for 2½ years. He played a key role in the administration process and was behind the ultimate decision to select Klark and Brooke Quinn from the shortlist of potential buyers. He chose the Quinns for their willingness to move quickly.

“We have been shackled … across the last two years,” said Mackaness. “We had an ownership structure who borrowed a significant amount of debt to buy the business, so instead of investing in innovation, we were paying interest to banks in an interest rate-rising market.”

Over the next three years, the trio hope to modernise Sara Lee’s offerings by creating new products, experimenting with different formats such as single serves, and launching into new categories by going beyond dessert and into different occasions such as breakfast food. Ice-cream innovation has also been earmarked as another area of growth.

Sara Lee’s new owners intend to get creative with its ice-cream products.
Sara Lee’s new owners intend to get creative with its ice-cream products.

“[We’re] not changing product quality. All of our favourites are still going to be in the supermarket … It’s actually growing the offering into more formats in more channels,” said Brooke Quinn.

The plan is also to push harder into the food service sector, which currently makes up about 20 per cent of the business — a figure Mackaness believes should be much bigger.

Capturing a bigger slice of this industry has been in the sights of ASX giants this year, with Metcash purchasing food distribution business Superior Food Group for more than $412 million.

Klark Quinn is eager to see the brand recover sooner rather than later. The former race car driver is focused on injecting some entrepreneurial energy into the 53-year-old business by prioritising “speed to market and agility” and strengthening relationships with key retailers and suppliers.

“Where the team have thought, ‘in 12 months, we’ll be able to innovate product XYZ’, I’d like to think that we can get something on the shelf far sooner than that,” he said.

“Just adding that 10 per cent to an already good strategy just makes it that much better.”

A key challenge for the new leaders of Sara Lee will be strengthening its proposition as an employer. Being based in NSW’s Central Coast is not conducive to attracting top talent, and the four-month administration process resulted in several head office staff departing the business.

The Quinns say they are committed to Sara Lee for the long term and want to see more Australians associate the brand with creating good memories.

“If we can trigger that emotional response, I think there’s something really sweet there,” said Klark Quinn.

“As parents, we’re always constantly looking for things to connect the family together.”

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Source: Thanks smh.com