Milling & Baking News - August 20, 2013 - (Page 1)

THE NEWS WEEKLY OF GRAIN-BASED FOODS AUGUST 20 , 2013 / I.B.I.E. Update Sales gains across all channels spur earnings growth at Flowers An expo-losion of opportunity Story on Page 30 LATE NEWS C.P.I. for baked foods, cereals down 0.1% WASHINGTON — The Consumer Price Index for baked foods and cereal products decreased 0.1% in July, according to the Bureau of Labor Statistics of the U.S. Department of Labor. The index for all food at home, meanwhile, was higher, rising 0.1% after climbing 0.1% in June. Of the 18 items followed by Milling & Baking News, 10 posted month-over-month declines, 6 finished higher and 2 were unchanged. The July index for Cereals and Bakery Products before seasonal adjustment was 271.3% of the 1982-84 average, up 1.1% from a year ago. For all food at home, the July index was 233.6, up 0.1% from July 2012. The Continued on Page 8 THOMASVILLE, GA. — Sales growth in the soft variety, white bread, buns and rolls, and snack cake categories helped drive second-quarter earnings at Flowers Foods, Inc. Net income in the quarter ended July 13 was $46,460,000, equal to 22c per share on the common stock, up sharply from $28,380,000, or 14c per share, in the second quarter of 2012. Adjusted for an acquisition-related cost, earnings were up 68% to $50,126,000. During the second quarter the company incurred acquisition-related costs of $3,666,000, which compared with $1,439,000 of acquisition-related costs in the same quarter a year ago. Quarterly sales were $898,153,000, up 32% from $681,561,000 a year ago. Gross margin as a percentage of sales in the quarter was 47.5%, up 120 basis points from 46.3% in the second quarter of 2012. Flowers said the increase was due “primarily to higher sales volumes and decreased ingredient and workforce-related costs as a per cent of sales, partially offset by increased outside purchases as a per cent of sales.” Breaking down the 32% sales increase, Flowers said the acquisitions of Lepage Bakeries and Sara Lee/California accounted for 10.9 points, while higher volumes contributed 21.8 points. An unfavorable net price/mix of 0.9 points partially offset the gains. “Increases in the soft variety, white Continued on Page 18 Grain Market Roundtable  Wheat prices should weaken into the fall months, unless… KANSAS CITY — Wheat futures prices may, and probably will, decline in the next several weeks, given the prospects for a record corn crop, according to veteran crop analysts. But they cautioned there was underlying support for the wheat market derived from strong world demand and record consumption as well as upside price risk in the event of a weather threat to the fall crops. Flour buyers will have to track fall developments closely. The U.S. Department of Agriculture on Aug. 12 issued revisions to its 2013-14 forecasts for U.S. and world wheat supply and demand. The U.S.D.A. tightened its forecast for the U.S. wheat carryover on June 1, 2014, by 25 million bus compared with the July outlook because of stronger-than-expected export demand, but the more important adjustments were registered in the world wheat supply-and-demand outlook. The U.S.D.A. forecast world wheat production in the current year at a record 705.38 million tonnes, up 7.58 million tonnes from the July forecast and up 50.11 million tonnes, or 8%, from 655.27 Continued on Page 23

Table of Contents for the Digital Edition of Milling & Baking News - August 20, 2013

Milling & Baking News - August 20, 2013
Sales gains across all channels spur earnings growth at Flowers
Grain Market Roundtable - Wheat prices should weaken into the fall months, unless…
Late News - C.P.I. for baked foods, cereals down 0.1%
Table of Contents
News/Comment - Underemployment a concern for baking and beyond
Editorial - Financing complexities come to fore
Late News
Business - Drake snack cakes set for September roll-out by McKee
Eighty per cent of Barbara’s product line now Non-G.M.O. Project verified
Frito-Lay files patent for crisp bread for snack food products
Kellogg addressing challenges in cereal
Financial Results - Despite strong cookie sales, Mondelez earnings under pressure
Industry Activities - Sugar growers focusing on oversupply and farm bill challenges
Cargill earnings rise sharply in fiscal year 2013 despite drought
Flowers believes in Hostess brands’ staying power despite lengthy supply interruption
Post sees added protein across portfolio as key growth opportunity
Data - Food price inflation outpaced C.P.I. between 2006 and 2012
Education and Research - Julie Miller Jones, Len Marquart join Quaker Oats Center of Excellence advisory board
U.S.D.A. sees record corn crop despite lower-than-expected yield
I.B.I.E. Update - An expo-losion of opportunity
I.B.I.E.: One-stop shopping
Regulatory Affairs - Casting an eye toward White House environmental policy
Book Review - World history, told through the lens of cereal grains
Merchandising - Pillsbury gives dough a gluten-free makeover
Barilla to debut gluten-free pasta this fall
Ingredient Market Trends - U.S.D.A. forecasts soybean crop to be the third largest on record
Ingredient Week
Supplier Innovations
Marketplace Business Network
Ad Index

Milling & Baking News - August 20, 2013