Milling & Baking News - August 11, 2020 - 11

Business

McMullian describes strain COVID
is placing on Flowers in Southeast
THOMASVILLE, GA. - Beyond the
announced plant closings precipitated by the coronavirus pandemic,
Flowers Foods, Inc. has contended
in recent weeks with the effects of
numerous employees at multiple
plants being sickened by COVID-19,
said A. Ryals McMullian, president
and chief executive officer.
Mr. McMullian offered insights
into how Flowers has been affected by and dealt with COVID-19
as a panelist in a July 29 webinar,
"Maneuvering Food Companies
During a Pandemic." The webinar
was part of the CPG Speaks series
produced by the Consumer Brands
Association.
With baking plants in a number
of states that experienced spikes
in confirmed cases of COVID-19 in
late June and July, Flowers has had
"quite a few" employees at its many
plants who were sickened or quarantined, Mr. McMullian said.
"We've felt it in Florida," he said.
"We've felt it in Georgia. We've felt it
in Texas. It does create some operational challenges, because you have
to have enough people to run a line.
We've had situations where we've
had to close a bakery for a couple
weeks, not because there has been
widespread outbreak at the plant,
but because you take enough people
off that shift you can't run that shift.
You take enough people out of the
bakery that are out on quarantine or
have been confirmed with COVID,
you can't run the bakery. Fortunately for us, we have enough bakeries,
we can back that production into
other plants and not really skip a
beat serving that market. It's not the
most efficient way to do it. Most of
the time it's a line that shuts down
here or there for a while, but there
have been a couple instances where
we had to close a whole plant for a
couple weeks."
Discussing COVID-specific challenges Flowers Foods has faced,
Mr. McMullian said securing masks
was a challenge early in the pandemic.
"We haven't really had a problem
as far as spread inside the plant,"
Mr. McMullian said. "We've certainly had cases, and we've had more
cases since the economy started to
reopen than we did at the very beginning. We had almost none at the
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beginning. The real problem now is
not spread within the bakery, where
we do temperature screenings,
all those kinds of things; it's what
people are doing when they leave.
With the economy opening back up,
people socializing more, going back
into restaurants and all that, that's
the real reason we've seen the cases
rise a bit, since mid-June."
Mr. McMullian traced the impact of COVID-19 on the Flowers
business from the outset of the

In a discussion about how food
companies will retain the increased
household penetration they have
secured during the pandemic, Mr.
McMullian said marketing spending will be important but added that
a heightened focus on e-commerce
will be necessary as well.
"E-commerce may be one of the
most permanent changes in my
opinion," Mr. McMullian said. "I'm
not sure that behavior ever goes fully back to brick-and-mortar. I think
a lot of consumers have come back
to products and brands they may
have left for one reason or another.
Whether it's because they're eating

'It's important to us that we win the digital
shelf just like we seek to win the physical
shelf.'
- A. Ryals McMullian,
Flowers Foods, Inc.

pandemic. Because the company
operates plants on the West Coast,
Flowers was keenly watching the
situation from the first confirmed
diagnoses and the larger early outbreak in Seattle, he said. Flowers
realized the pandemic represented
a serious situation in March, when
panic buying ramped up, he said.
Even within the food industry, the
pandemic created particular challenges for bakers.
"We basically don't have any inventory, being fresh and DSD (direct-store delivery), so moving to a
limited assortment across the entire
network was really key for us," he
said. "There was no backfill to take
to stores, and we're basically baking
to order virtually every day."
Asked whether DSD has proven
to be an advantage during the pandemic, he said it has. At the same
time, he acknowledged that operating a DSD system is often costly.
"(DSD is) really service to the retailers," he said. "We're furiously
going there every day. I'm not going
to tell anybody that we weren't out
of stock at some point somewhere
along the way, but for the most part
even during the very height of it, because our independent distributors
are going to the store virtually every day, the bakeries are turning out
product every day, perhaps Flowers
and others in the industry were able
to serve the stores a little better."

out all the time, they're on the go,
it's dietary, there could be a gazillion reasons for it.
"I think there are a lot of brands,
like the brands represented here today on this call that have started to
regain that trust with the consumer.
All of us deliver a wholesome, quality product; the service is consistently to retailers good. We're reliable. I think that matters.
"How much does in-home eating continue going forward? Certainly not at the rate we saw at the
peak, but I do think at some level
that will continue. I think families
have rediscovered sitting down to
dinner together, including my own.
I think many folks have really enjoyed that.
"Our brands want to be there
for that purpose. So, it's about the
shelves being stocked. It's the same
thing for the digital shelves, too.
It's important to us that we win the
digital shelf just like we seek to win
the physical shelf.
We have increased our marketing
budget to try to keep the momentum, to keep the brands front and
center with the consumer when they
go into the store. We know consumers when they are going to the store
are spending less time there, so to
the extent we can have those offrack displays or make sure our shelf
set looks great and is fully stocked,
the better off we're going to be." MBN
Milling & Baking News

August 11, 2020 / 11

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Milling & Baking News - August 11, 2020

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