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WhiteWave Foods Names New CEO

Posted on: Friday, 26 August 2005, 00:00 CDT

Aug. 26--The Dean Foods Co. said Thursday it has hired a Gillette executive to lead its Boulder-based WhiteWave Foods subsidiary, replacing Steve Demos, who resigned in March.

Joseph E. Scalzo, who currently serves as Gillette's group president of the personal care and global value chain, will start work as WhiteWave Foods' president and chief executive officer in early October. That's when the merger between Gillette and Procter & Gamble is expected to close, said Molly Keveney, a WhiteWave spokeswoman.

The selection of Scalzo prompted some in the investment community to speculate on a potential spinoff of WhiteWave Foods, a strategy the company denies.

Scalzo was not available for comment, Keveney said, citing regulations of the pending merger.

"He spearheaded a really successful three-year turnaround of (Gillette's) $1 billion global personal care business," Keveney said. "We are basically a ($1.2 billion) startup, so there are some really great synergies there."

Scalzo's risumi includes executive positions at The Minute Maid Co. and the Coca-Cola Co. He also held positions in marketing and product supply at Procter & Gamble. At Minute Maid, Scalzo lead efforts such as the "fortified" juices that added minerals and vitamins, Keveney said.

Scalzo fills the position vacated in March by Steve Demos, who founded the tofu company White Wave Inc. in 1977. Almost 20 years later, Demos launched Silk soy milk, which has gained national presence from grocery store shelves to the television screen and become a $550 million brand.

The Dallas-based Dean Foods (NYSE: DF, $36.32) bought White Wave in 2002, Longmont-based Horizon Organic Dairy in 2003 and consolidated the two brands with its Dean National Brand Group in 2004. The consolidated organization was named WhiteWave Foods and had $1.2 billion in sales last year.

John McMillin, an analyst with Prudential Securities, wrote in a recent research note that he and his associate analysts consider Scalzo as a "heavyweight" in consumer products marketing.

"Seeing that the company has now landed an executive with such an impressive risumi makes us comfortable that WhiteWave growth will continue to be a major contributor to (Dean Foods') earnings," wrote McMillin, who does not own shares of Dean Foods.

This summer, Dean Foods spun off its TreeHouse Foods subsidiary and sold its Marie's dressings and Dean's dips brands to Ventura Foods, fueling speculation among analysts that WhiteWave Foods might be another spinoff.

"I think that certainly could be an option with their fluid milk business," said Clinton Mayer, an equity analyst at Burnham Securities Inc. Mayer owns shares of Dean Foods.

McMillin said the Scalzo appointment could fit well if the company wanted to go that route with WhiteWave Foods.

"Perhaps that could set up a spinoff of WhiteWave down the road," McMillin wrote. "(Dean Foods) may now look expensive for a milk company but a stand-alone WhiteWave might trade at more than double the valuation."

Dean Foods does not plan to spin WhiteWave into a separate company, Keveney said.

The company has "been planning to hire a dedicated president for a while and (CEO) Gregg Engles has worked so hard to build this organization and has such a vested interest in what we're doing at WhiteWave Foods," she said. "He wants us to continue to move forward."

By November or December of this year, WhiteWave Foods will move into a new headquarters at the Mountain View Corporate Center in Broomfield.

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Source: Daily Camera

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