Sara Lee (NYSE:SLE) has an extensive business in North America and the company is making investments to grow earnings from here over the next few years. Sara Lee's largest base of business is in North America where the company operates in three segments, with total adjusted sales of $6.7 billion in fiscal 2010, which ended June 30. The company reported a non-GAAP adjustment of its sales in fiscal 2010 to exclude an extra week in the year.

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North American Retail
North American retail is the largest part of the company's business in North America with fiscal 2010 sales of $2.8 billion. This segment includes brands like Hillshire Farm, Jimmy Dean and Ball Park Franks.

Sara Lee has increased its operating income by 85% in this business over three years, from $183 million in fiscal 2008 to $338 million in fiscal 2010. The company's strategy is to concentrate in large and growing categories where branding is very important to customers.

Sara Lee has made or is planning to make investments to improve its profitability in North American retail. These investments include updates to the company's plant in Missouri and the adoption of new technology to automate business planning and other tasks.

Fresh Bakery
North American Fresh Bakery is the second largest part of Sara Lee's business in North America, with $2.1 billion in sales in fiscal 2010. The company owns 41 bakeries across the United States and distributes on more than 4,000 routes in its service area.

Operating income for North American Fresh Bakery has been flat for several years and was $60 million in fiscal 2010. The company is determined to improve this business going forward and increase its operating margin from the 2.9% reported in fiscal 2010. Flower Foods (NYSE:FLO) reported margins of 8.9% in its bakery business so there is significant upside for Sara Lee here if the company is successful. Sara Lee plans to focus on restructuring the company's route system and other investments to improve its operations.

North American Food Service reported $1.8 billion in sales in fiscal 2010. Sara Lee has increased operating income by 35% in North American Food Service over the previous two years, from $110 million in fiscal 2008 to $149 million in fiscal 2010. (For a personal finance look at food, check out 22 Ways To Fight Rising Food Prices.)

Investments
Sara Lee is working to improve its supply chain in the retail and foodservice businesses, as this will lead to higher returns on capital and lower costs. The company plans to spend $130 million at a facility in Kansas City, which will lead to a doubling of capacity and a 50% reduction in processing time.

Bottom Line
Another company in the food business in North America include ConAgra Foods (NYSE:CAG), which owns the Chef Boyardee and Hebrew National brands. General Mills (NYSE:GIS) is also a large competitor in North America with dozens of brands ranging from Betty Crocker to Hamburger Helper.

North America is an important part of Sara Lee and the company is making investments here over the next few years to improve efficiency, cut costs and boost profits.

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