CoolBrands serving up breakfast treats

Last year, a proposal to nearly triple the number of stock options set off a shareholder revolt that forced CoolBrands management to reduce its request. Just last month, a Report on Business investigation ranked it at the bottom of all firms on the benchmark S&P/TSX index for its board structure and practices. Some analysts have said concerns about the firm's board, which has only one independent director, will keep large institutional buyers on the sidelines.

The Globe and Mail
October 3, 2003

CoolBrands serving up breakfast treats
Frozen bars touted as a 'meal solution'
Elizabeth Church

Frozen treat maker CoolBrands International Inc. wants to elbow aside morning staples such as cereal and toast with a new frozen yogurt breakfast bar it is promoting as a "meal solution."

"Breakfast just changed for good," CoolBrands co-chief executive officer David Stein told a conference in Florida yesterday that was organized by RBC Dominion Securities Inc.

Mr. Stein said the new frozen bars, to be marketed under the Yoplait brand, will be launched in the Washington market in December, supported by an extensive advertising campaign.

The frozen yogurt treats will be sold as bars coated with cereal or sandwiched between two cereal wafers. Because they will contain as much calcium as a glass of milk as well as fortified cereal, Mr. Stein predicted they will appeal to moms.

The product is a departure for the Markham, Ont., firm best known for its Eskimo Pies and Yogen Fruz brands, but Mr. Stein said the new product will have an advantage over other frozen breakfast products such as waffles because it can be eaten straight from the package and requires no preparation.

Besides, he told the conference, market research by the company has discovered that some U.S. consumers are already eating the firm's frozen treats for breakfast.

"We are taking consumers where they already want and need to go," he said.

Mr. Stein said the product is aimed at the 40 to 50 per cent of Americans who leave their homes without eating in the morning and is inspired by the popularity of cereal bars. But he said once consumers put the bars in their freezer he expects they will eat them at all times of the day, not just in the morning.

CoolBrands has attracted considerable attention recently after it clinched a deal this spring that allowed it to pick up assets that Nestlé SA had to shed to get approval from U.S. regulators to buy rival Dreyer's Grand Ice Cream Inc.

The fast-growing firm also has gained the spotlight for its corporate governance practices. Last year, a proposal to nearly triple the number of stock options set off a shareholder revolt that forced CoolBrands management to reduce its request. Just last month, a Report on Business investigation ranked it at the bottom of all firms on the benchmark S&P/TSX index for its board structure and practices. Some analysts have said concerns about the firm's board, which has only one independent director, will keep large institutional buyers on the sidelines.

Yesterday, Mr. Stein emphasized the firm's growth plans, not only with its new breakfast bars, but also under a new licensing deal with Atkins Nutritionals Inc., which will allow it to sell low-carbohydrate ice creams with the blessing of the creators of the popular diet.


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