So far as Consolidated Food Corp. is concerned, "Nobody doesn't like Sara Lee."
So yesterday, with a two-page advertisement in the Wall Street Journal and other newspapers, Consolidated announced it had officially changed its name to Sara Lee -- taking the identity of one of its most prominent product lines.
"Of all the Consolidated Foods brands today, Sara Lee was the first," the advertisement said. "Now our first brand name is our brand new first name."
Even though sales of Sara Lee products -- principally frozen baked goods such as cheese cake -- account for about only 8 percent of the company's $7 billion annual sales, the Chicago-based corporation chose Sara Lee over some of its other famous brands -- including L'eggs hosiery products, Hanes Hosiery, Jimmy Dean meats, Electrolux vacuum cleaners, Popsicles and Kiwi shoe polish -- because a survey revealed it had the most name recognition of all Consolidated's products.
"Sara Lee is universally known and is an appealing name that reflects the high quality and consumer marketing orientation of the corporation," Chairman John H. Bryan Jr. said when he announced the proposed name change last January.
Sara Lee decided to make the change about a year ago based on frustration over its relatively low stock price in relation to its earning performance. "Our stock price/earning ratio was far below our peer group average despite the fact that our financial returns were above the peer group average," said chief financial administrative officer Michael Murphy. "Our stock was held by fewer institutions than any our peers," he added. A study revealed that one reason for this discrepancy was that few institutional investors really knew the company, Murphy said. "They didn't know our products or what we did. Obviously, we had an inappropriate and misleading name."
So the company began searching for a brand new name, considering more than 600 possibilities, including variations on Consolidated, such as Concor, Consol, Conworth and Con Products.
"But even that name brought with it no recognition or awareness, and no one knew what it meant," said Steven Savage, Sara Lee's public relations manager. What is more, he noted, "We would have had to invest millions in an identity program" that might not have resulted in any more recognition than Consolidated.
After realizing that many other comparable consumer product companies -- such as Campbell, Quaker Oats and Heinz -- used brand names for their corporate names even though the brand names accounted for only a small percentage of company sales, the company decided to choose a product name for its own name.
The move was overwhelmingly approved by Sara Lee's shareholders last week -- although a few longstanding shareholders wanted the company to retain Consolidated as its name.
"In the short run, I'm very skeptical" that the name change will result in an improvement in the stock price, Murphy said. But he said he hopes it will make a difference in the long run.