Milling & Baking News Corporate Profiles - November 2013 - (Page 92)

Company Overview Flowers Foods, Inc. Facing rapid industry change, Flowers adapts with major acquisitions A tortoise no longer. For decades, Flowers Foods, Inc. prided itself on slow but steady expansion growing organically and through small acquisitions. The company recently noted it has completed more than 100 acquisitions since it first went public in 1968. Most of these were small family baking companies operating only a single plant. The past 12 months at Flowers have been quite different. Moving into the breach when Grupo Bimbo was forced to divest a number of baking plants and when Hostess Brands Inc. liquidated from bankruptcy, Flowers dramatically expanded its market presence, solidifying its position as the second largest wholesale baking company in the United States. On July 22, Flowers said it completed its acquisition of 20 baking plants and other "bread assets" from Hostess Brands for $355 million. "These assets fit very well with our strategy to grow our fresh baked foods through market expansion and acquisitions," said Allen L. Shiver, president and chief executive officer. "Consumers across much of the country can expect to see these well-known and loved bread brands returning to store shelves over time." The Flowers' bid for most of the Hostess bread assets was accepted early in the year with bankruptcy court approval in March. On July 8, the company received regulatory approval pursuant to the Hart-Scott-Rodino Act. Five months earlier, in January, Flowers completed an acquisition of licenses to the Sara Lee and Earthgrains brands in California from Bimbo Bakeries USA, a subsidiary of Grupo Bimbo S.A.B. de C.V. The transactions rapidly accelerated an ambitious geographic expansion plan established in 2011 to reach 75% of the U.S. population by 2016. At the time, Flowers products reached 53% of the population, up from 38% in 2003. With the acquisitions completed since 2011, Flowers estimated its directstore-delivery products will be available to 77% of the U.S. population in 2013. Given the "national brand" nature of some of its purchases from Hostess, the expanded reach will be valuable. Chief executive officer - The newly acquired Wonder, Merita, Home Pride and Butternut bread returned to grocery store shelves across the country beginning Sept. 23. The brands had been off the market since Hostess declared bankruptcy in November 2012. "We're thrilled to be baking these wonderful breads and know that millions of consumers will be smiling when they find their favorite back in their grocery store," said Keith Aldredge, vicepresident of marketing for Flowers. Flowers said the former Hostess bread brands are being baked at Flowers baking plants around the country and are available throughout the company's direct-store delivery (D.S.D.) market. Flowers' D.S.D. market currently reaches more than 77% of the U.S. population in the East, South, Southwest and California. Citing the company's own research, Mr. Shiver said in August that the Wonder brand has a 96% aided brand awareness in core markets. "From a customer standpoint, food retailers are well aware of the power of the Wonder brand, which drove good margins for them and also once had Top brands - Nature's Own Wonder Annual sales - Allen L. Shiver 92 \ November 2013 $3.5 billion Milling & Baking News * Food Business News * Baking & Snack * Meat & Poultry Corporate Profiles

Table of Contents for the Digital Edition of Milling & Baking News Corporate Profiles - November 2013

Milling & Baking News Corporate Profiles - November 2013