Baking&Snack - February 2012 - 17

IN BRIEF
During the past three decades, Maple Leaf and Canada Bread have made dozens of acquisitions as the baking industry consolidated. More recently, however, the changing global economy, a strong Canadian dollar and increased competitiveness in the food industry prompted the company to shift strategies. “We have gone from, ‘Let’s consolidate’ to ‘Let’s dramatically improve our cost position,’ because it used to be we were growing,” Mr. Lan explained. “But when you are not growing anymore, the only way to improve the bottom line is to either innovate, which we’re working really hard at, or get our costs down, which we’re also working hard at.” During the next two years, Maple Leaf will close three of its smaller Canada Bread facilities in Ontario and consolidate their operations into the Hamilton bakery. Much of the equipment in these aging bakeries is several decades old — some of it in place for more than a half-century — and it was simply more cost-effective in the long run to invest in the Hamilton operation than maintain the old ones, according to Mr. Lan. In addition to consolidating its operations, the company allocated 50,000 sq ft of space in the Hamilton facility for yet-to-be-determined production lines based on consumer trends, customer demand and new product development. Building the future infrastructure may have cost more initially, but the extra space will allow the company to respond quickly to future shifts in the market. “This was a hard decision, one of the hardest decisions in building the Hamilton plant,” Mr. Lan noted. “We asked if we should build the addition at a later date or do we put aside 50,000 sq ft now and say, ‘We’re going to put something new in here. We’re just not sure what it is yet.’ I’ll tell you why I favored the latter. When the space is there and it’s empty, it’s a reminder every day when we walk through the bakery that it’s important to innovate. “If there were just a wall with another acre of property behind it, you probably only see it twice a year when walking behind the back of the plant,” he added. “You do reduce your construction costs long-term by doing it all at once. If I didn’t think we could fill the space, I wouldn’t have done it. I believe if we put our thinking hats on, we will come up with some innovation.” — Dan Malovany Bimbo Bakeries USA, Horsham, PA, will close its Sara Lee Bakery in Rock Island, IL, by the end of 2012. The company shut down a bun-producing line in mid-January and will phase out bread production later in the year. ConAgra Foods, Inc., Omaha, NE, acquired National Pretzel Co., Lancaster, PA. Financial terms of the agreement were not released. Groupe Biscuits Leclerc, Inc., SaintAugustin-de-Desmaures, QC, bought the Ancient Grain Bar general concept from Go Pure Foods, Fresno, CA. Snak King Corp., Los Angeles, CA, absorbed C.J. Vitner Co., Chicago, IL. Terms of the transaction were not released. Sun Country Foods, Inc., Boston, MA, purchased the Kretschmer wheat germ brand and manufacturing facility from The Quaker Oats Co. Sun Country is a recently formed portfolio company of Brynwood Partners, Greenwich, CT.

Hostess Brands files for bankruptcy again
Citing that its current cost structure is not competitive due to legacy pension and medical benefit obligations and restrictive work rules, Hostess Brands, the maker of Wonder Bread and Twinkies, has recently filed for reorganization under Chapter 11 bankruptcy protection. Those factors combined with the economic downturn and a more difficult competitive landscape led to the need for reorganization, according to the Irving, TX-based company. It’s the second time Hostess Brands, previously known as Interstate Bakeries Corp., filed for Chapter 11. It previously did so in September 2004. The proceedings affect the company’s five subsidiaries, and Hostess will receive a commitment for $75 million in debtor-inpossession financing from a group of exwww.bakingandsnack.com isting first-lien lenders led by Silver Point Capital, L.P. The financing is expected to help Hostess maintain normal business while undergoing restructuring. The company said it will continue to operate its bakeries, outlet stores and distribution centers and deliver its products to customers. In its early January filing with the US Bankruptcy Court for the Southern District of New York, Hostess said its biggest unsecured creditor is the Bakery & Confectionery Union & Industry International Fund, which it owes approximately $944.2 million. The company’s second largest unsecured creditor is Central States, Southeast and Southwest Areas Pension Plan, which Hostess owes about $11.8 million. Also in the filing, Hostess listed its estimated assets at $500 million to $1 billion and its liabilities at more than $1 billion. “Hostess has some of our industry’s most powerful and resilient brands,” said Brian Driscoll, the company’s president and CEO. “With generations of loyal consumers, numerous iconic products and a talented and experienced workforce, Hostess Brands has tremendous inherent strengths to build upon.” The company also filed a motion to establish a timeline for motions under Sections 1113 and 1114 of the Bankruptcy Code to address labor agreements. The union has publically disputed many of the company’s positions. The company emerged from its first Chapter 11 bankruptcy in February 2009. Currently, Hostess Brands employs about 19,000 and operates in 49 states. February 2012 / Baking & Snack / 17


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Baking&Snack - February 2012

Table of Contents for the Digital Edition of Baking&Snack - February 2012

Baking&Snack - February 2012
Table of Contents
Table of Contents
Editorial - Fresh start to 2012
Newsfront - Canada Bread sets ambitious goals in 2012
Newsfront - Hostess Brands files for bankruptcy again
In Brief
News - ASB selects four to 2012 Hall of Fame
News - Kraft to reduce workforce as part of realignment
News - GMA director to lead new food safety alliance
In Brief
News - Whole Grains Summit aims at whole world
News - FTRAC convenes with ARS in Boston
In Brief
Correction and Clarification
People
In Memoriam
Right on Track
Back on Track
Industry Insight - Managing Valued Assets
Going Lean, Cutting Waste
Breakfast Trends - Keeping Breakfast in Balance
Botanicals - Extracts with Benefits
Probiotics - Working with Probiotics
Ingredient App - Vanilla Upgraded
Regulatory Q&A - Better Safe than Sorry
Oven Technology - Ability with Agility
Pan Management - Automating Pan Handling
In Recovery Mode
From Pan to Hearth
Food Safety Q&A
ABA FTRAC Q&A
Course Preview - Getting Ahead of the Learning Curve
Events
Innovations
Ingredient News
Products & Packaging
Patents
New on the Shelf
Marketplace
Ad Index
New Product Spotlight - Superfruits to the Rescue
Baking&Snack - February 2012 - Baking&Snack - February 2012
Baking&Snack - February 2012 - 2
Baking&Snack - February 2012 - 3
Baking&Snack - February 2012 - 4
Baking&Snack - February 2012 - 5
Baking&Snack - February 2012 - 6
Baking&Snack - February 2012 - 7
Baking&Snack - February 2012 - 8
Baking&Snack - February 2012 - Table of Contents
Baking&Snack - February 2012 - 10
Baking&Snack - February 2012 - Table of Contents
Baking&Snack - February 2012 - Editorial - Fresh start to 2012
Baking&Snack - February 2012 - 13
Baking&Snack - February 2012 - 14
Baking&Snack - February 2012 - 15
Baking&Snack - February 2012 - Newsfront - Canada Bread sets ambitious goals in 2012
Baking&Snack - February 2012 - In Brief
Baking&Snack - February 2012 - News - ASB selects four to 2012 Hall of Fame
Baking&Snack - February 2012 - 19
Baking&Snack - February 2012 - In Brief
Baking&Snack - February 2012 - 21
Baking&Snack - February 2012 - Correction and Clarification
Baking&Snack - February 2012 - In Memoriam
Baking&Snack - February 2012 - Right on Track
Baking&Snack - February 2012 - 25
Baking&Snack - February 2012 - 26
Baking&Snack - February 2012 - 27
Baking&Snack - February 2012 - 28
Baking&Snack - February 2012 - 29
Baking&Snack - February 2012 - 30
Baking&Snack - February 2012 - 31
Baking&Snack - February 2012 - 32
Baking&Snack - February 2012 - 33
Baking&Snack - February 2012 - Back on Track
Baking&Snack - February 2012 - 35
Baking&Snack - February 2012 - 36
Baking&Snack - February 2012 - 37
Baking&Snack - February 2012 - 38
Baking&Snack - February 2012 - 39
Baking&Snack - February 2012 - 40
Baking&Snack - February 2012 - 41
Baking&Snack - February 2012 - 42
Baking&Snack - February 2012 - Industry Insight - Managing Valued Assets
Baking&Snack - February 2012 - Going Lean, Cutting Waste
Baking&Snack - February 2012 - 45
Baking&Snack - February 2012 - 46
Baking&Snack - February 2012 - 47
Baking&Snack - February 2012 - 48
Baking&Snack - February 2012 - 49
Baking&Snack - February 2012 - 50
Baking&Snack - February 2012 - 51
Baking&Snack - February 2012 - 52
Baking&Snack - February 2012 - 53
Baking&Snack - February 2012 - 54
Baking&Snack - February 2012 - Breakfast Trends - Keeping Breakfast in Balance
Baking&Snack - February 2012 - 56
Baking&Snack - February 2012 - 57
Baking&Snack - February 2012 - 58
Baking&Snack - February 2012 - 59
Baking&Snack - February 2012 - 60
Baking&Snack - February 2012 - 61
Baking&Snack - February 2012 - 62
Baking&Snack - February 2012 - 63
Baking&Snack - February 2012 - 64
Baking&Snack - February 2012 - Botanicals - Extracts with Benefits
Baking&Snack - February 2012 - 66
Baking&Snack - February 2012 - 67
Baking&Snack - February 2012 - 68
Baking&Snack - February 2012 - 69
Baking&Snack - February 2012 - 70
Baking&Snack - February 2012 - Probiotics - Working with Probiotics
Baking&Snack - February 2012 - 72
Baking&Snack - February 2012 - 73
Baking&Snack - February 2012 - 74
Baking&Snack - February 2012 - 75
Baking&Snack - February 2012 - 76
Baking&Snack - February 2012 - 77
Baking&Snack - February 2012 - 78
Baking&Snack - February 2012 - 79
Baking&Snack - February 2012 - Ingredient App - Vanilla Upgraded
Baking&Snack - February 2012 - 81
Baking&Snack - February 2012 - 82
Baking&Snack - February 2012 - Regulatory Q&A - Better Safe than Sorry
Baking&Snack - February 2012 - 84
Baking&Snack - February 2012 - 85
Baking&Snack - February 2012 - 86
Baking&Snack - February 2012 - Oven Technology - Ability with Agility
Baking&Snack - February 2012 - 88
Baking&Snack - February 2012 - 89
Baking&Snack - February 2012 - 90
Baking&Snack - February 2012 - 91
Baking&Snack - February 2012 - 92
Baking&Snack - February 2012 - 93
Baking&Snack - February 2012 - 94
Baking&Snack - February 2012 - 95
Baking&Snack - February 2012 - 96
Baking&Snack - February 2012 - Pan Management - Automating Pan Handling
Baking&Snack - February 2012 - 98
Baking&Snack - February 2012 - 99
Baking&Snack - February 2012 - 100
Baking&Snack - February 2012 - 101
Baking&Snack - February 2012 - 102
Baking&Snack - February 2012 - 103
Baking&Snack - February 2012 - In Recovery Mode
Baking&Snack - February 2012 - 105
Baking&Snack - February 2012 - 106
Baking&Snack - February 2012 - 107
Baking&Snack - February 2012 - 108
Baking&Snack - February 2012 - 109
Baking&Snack - February 2012 - From Pan to Hearth
Baking&Snack - February 2012 - 111
Baking&Snack - February 2012 - 112
Baking&Snack - February 2012 - Food Safety Q&A
Baking&Snack - February 2012 - 114
Baking&Snack - February 2012 - 115
Baking&Snack - February 2012 - 116
Baking&Snack - February 2012 - ABA FTRAC Q&A
Baking&Snack - February 2012 - 118
Baking&Snack - February 2012 - 119
Baking&Snack - February 2012 - 120
Baking&Snack - February 2012 - Course Preview - Getting Ahead of the Learning Curve
Baking&Snack - February 2012 - 122
Baking&Snack - February 2012 - Events
Baking&Snack - February 2012 - Innovations
Baking&Snack - February 2012 - Ingredient News
Baking&Snack - February 2012 - 126
Baking&Snack - February 2012 - Products & Packaging
Baking&Snack - February 2012 - 128
Baking&Snack - February 2012 - 129
Baking&Snack - February 2012 - 130
Baking&Snack - February 2012 - 131
Baking&Snack - February 2012 - Patents
Baking&Snack - February 2012 - 133
Baking&Snack - February 2012 - 134
Baking&Snack - February 2012 - New on the Shelf
Baking&Snack - February 2012 - 136
Baking&Snack - February 2012 - 137
Baking&Snack - February 2012 - 138
Baking&Snack - February 2012 - Marketplace
Baking&Snack - February 2012 - 140
Baking&Snack - February 2012 - 141
Baking&Snack - February 2012 - 142
Baking&Snack - February 2012 - 143
Baking&Snack - February 2012 - 144
Baking&Snack - February 2012 - Ad Index
Baking&Snack - February 2012 - New Product Spotlight - Superfruits to the Rescue
Baking&Snack - February 2012 - 147
Baking&Snack - February 2012 - 148
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