Company News

Sara Lee looks to green bread to boost EarthGrains

* Sara Lee’s EarthGrains first brand to use Eco-Grain

* Price same as standard EarthGrains loaf

* Sara Lee hopes to expand use of Eco-Grain wheat

CHICAGO, Feb 1 (Reuters) - A green loaf of bread is usually something you do not want to find on store shelves, but Sara Lee Corp SLE.N is hoping using "green" grain will help attract consumers to its EarthGrains bread.

Sara Lee will announce on Tuesday it will be the first packaged food company to use Eco-Grain wheat in its baking.

Eco-Grain was developed by Horizon Milling, a joint venture between agribusiness giant Cargill Inc [CARG.UL] and farmer and rancher owned CHS Inc CHSCP.O. It is grown using farming practices that reduce fertilizer and it requires less land than organic farming.

The bread will also cost the same $2.49 to $4.09 for a 24-ounce loaf as EarthGrains currently costs. That should appeal to consumers interested in helping the environment, but not if it means paying significantly more for organic bread, said Kyle Marinkovich, marketing manager at Horizon Milling.

“This is an easy way that they can impact the environment,” he said.

Sara Lee is No. 2 in a fragmented U.S. bread industry -- trailing Thomas' English muffin maker George Weston Ltd WN.TO -- with 5.8 percent of the market, according to Euromonitor International. Sara Lee's North American fresh bakery products earned $2.2 billion in revenue in fiscal 2009.

Private label manufacturers increased their market share during the recession. With the myriad private-label bakers now making up 17.3 percent of the market, branded players such as Sara Lee need to work even harder to attract customers.

“That seems to be one of the categories where (consumers) don’t perceive significant difference between private label and branded offering,” Morningtar Erin Swanson said of the bread business.

Eco-Grain wheat is grown on a handful of family farms and Horizon hopes that production will increase “exponentially” as demand for the grain increases, Marinkovich said.

To start, 20 percent of the wheat used in EarthGrains wide-pan bread will be Eco-Grain wheat, with the company looking to use more Eco-Grain wheat in the bread going forward. Sara Lee also plans to use Eco-Grain wheat in its EarthGrains thin buns -- a sort of flat sandwich bun -- later this year.

Sara Lee is trying to tap into consumers concerned about the environment by launching a marketing campaign for the Eco-Grain bread with the slogan “plot to save the Earth, one field at a time.”

“We think about this as a movement, think about this as a first step and something we want to build upon,” said Tim Zimmer, vice president for Sara lee’s North American fresh bakery business. (Reporting by Brad Dorfman; editing by Michele Gershberg and Andre Grenon)