Milling & Baking News Corporate Profiles - 2019 - 10

INDUSTRY REVIEW: GRAIN-BASED FOODS

Grain-based foods
Industry searches for ways to slow pace of category losses
hat the grain-based foods industry is losing market share to other food
categories isn't new in 2019.The pace at which the losses are transpiring
and the urgency with which the industry is exploring ways to boost business definitely is a major concern. The weak trends have fueled varied numerous industry changes over the past year.
Volume of many major grain-based foods categories has been declining
in recent years, but data from Information Resources, Inc. for the 52 weeks
ended Aug. 11 indicate an acceleration. The industry's flagship product -
fresh bread - experienced a 4.8% unit volume decline over the past year, to
3,523,484,271 units. Dollar sales for the year were down, too - by 0.8%,
to $8,923,613,663.
Other grain-based categories on the defensive over the past 12 months
included hamburger and hot dog buns, unit sales down 2.4%; other rolls, down
1.8%; pita bread, down 7%; crackers, down 1.7%; crackers with fillings, down
0.6%; saltine crackers, down 1.9%; graham crackers, down 3.1%; breadsticks, down 8.3%; ready-to-eat cereal, down 3.1%; popcorn, down 0.8%;
hot cereal, down 4%; pretzels, down 3.9%; granola bars, down 5%; and
pasta, down 0.7%.
A few grain-based categories, many of which are more indulgent, enjoyed
sales gains, including bakery snacks, up 0.8%; frozen pizza, up 1.5%; cookies,
up 0.5%; and salty snacks, up 3%.
Drilling deeper into the figures for fresh bread, most major companies
experienced declines in unit sales of branded bread, but private label sustained the greatest losses. At 1,083,012,714 units, sales of private label
bread were down 9.8% for the year. Even with another year of share loss,
private label accounted for 31% of bread sales volume but dropped to just
under 20% of dollar sales. The Horsham, Pa.-based U.S. business of Grupo
Bimbo S.A.B. de C.V. remained the largest bread baker in the United States
over the past year but continued to lose market share, with a 6.1% decline

in unit sales. Flowers Foods, Inc., Thomasville, Ga., experienced nearly flat
unit sales (up 0.8%), but gained considerable share in a falling market.
Campbell Soup Co., Norwalk, Conn., enjoyed a sales jump of 2.5% during
the year.
The declining sales volume has exacerbated an excess in baking industry
production capacity, and numerous plants were closed over the past year. For
example, in November 2018, Flowers Foods announced plans to shutter a baking plant in Brattleboro, Vt., and in October 2019, the company said it was
planning to cease production at a plant in Opelika, Ala. Bimbo in September
2019 announced plans to close a plant in West Hazelton, Pa. Smaller companies have consolidated production as well. Early in 2019 Aunt Millie's closed

LEADING FRESH

LEADING

bread vendors
1
2
3
4
5
6
7
8
9

Grupo Bimbo
Flowers Foods Bakeries L.L.C.
Campbell Soup Co.
Lewis Bakeries, Inc.
Aunt Millie's Bakeries, Inc.
United States Bakery
Aryzta L.L.C.
H&S Bakery
Pan-O-Gold Baking Co.
Private label
Total

BIMBO BAKERIES USA/ARNOLD FACEBOOK

bakery snacks vendors
% change
from
Dollar sales
year ago
$2,372,830,732
-2.3%
$2,058,643,367
5.1%
$623,766,064
2.6%
$190,263,007
5.0%
$166,323,552
-7.5%
$150,918,942
5.3%
$114,258,028
-4.6%
$102,336,554
11.9%
$101,626,132
4.1%
$1,758,682,092
-7.2%
$8,923,613,663
-0.8%

1
2
3
4
5
6
7
8
9

McKee Foods Corp.
Hostess Brands, Inc.
Grupo Bimbo
Flowers Foods L.L.C.
Give and Go Prepared Foods Corp.
General Mills, Inc.
Table Talk Pies, Inc.
Starbucks Coffee Co.
JTM Foods, Inc.
Private label
Total

Dollar sales
$698,248,594
$433,915,699
$210,599,689
$188,809,258
$100,694,509
$56,203,222
$38,091,761
$34,403,896
$33,774,943
$616,802,517
$2,607,670,137

% change
from
year ago
2.3%
3.5%
12.3%
2.0%
-1.5%
-22.4%
66.3%
2.3%
-3.4%
-5.0%
1.2%

Data for 52 weeks ended Aug. 11, 2019
Total U.S. - Multi-outlet with C-Store (Supermarkets, Drugstores and Mass Market Retailers, Gas/C-Stores, Military Commissaries and Select Club & Dollar Retail Chains)
Source: Information Resources, Inc.

10 \ November 2019

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