Milling & Baking News Corporate Profiles - 2019 - 12

INDUSTRY REVIEW: GRAIN-BASED FOODS

its baking plant in Coldwater, Mich., and Schwebel Baking Co. in March said it
was closing its plant in Solon, Ohio.
Even companies that have avoided a focus on traditional sliced bread have
experienced challenges in recent years. Aryzta L.L.C., which enjoyed rapid
growth for many years in the 2000s, has experienced great challenges. Unit
sales over the past 52 weeks were down
4.6%. Difficulties faced by the North American business of Aryzta were blamed in October for a steep share price drop of the parent
company, which is headquartered in Zurich.
Commenting on the weak revenue trends,
Aryzta chief executive officer Kevin E. Toland
said the effort to stabilize revenues in North
America was "challenging, and the recovery
will take time and be bumpy."
Weakness in sales of grain-based foods has
been attributed, in part, to the increasing popularity of gluten-free dieting. Reflecting a desire to participate in this trend, Flowers Foods
in late 2018 acquired Canyon Bakehouse, a
leading producer of gluten-free bread.
Also a major change at Flowers during
the past year was a "changing of the guard"
at the company's helm. At mid-year, A. Ryals GRAIN FOODS FOUNDATION
McMullian Jr. was elected president and c.e.o. of Flowers, succeeding Allen L.
Shiver, who retired following a career dating back 41 years.
Even before the drop in flour-based product sales over the past year, millers
and bakers had begun to explore whether there is more to do as an industry
to stimulate demand for flour-based foods. Spearheaded by the Grain Foods
Foundation, the industry has been considering investing in a checkoff program

to be overseen by the U.S. Department of Agriculture. From dairy and meat
to produce, most other dietary staples have such a program to help educate
consumers with the objective of allowing individual products and product categories to boost demand.
Specifically under consideration by the grain-based foods industry is a
checkoff program that promotes "bread basket" products, including bread, rolls, bagels,
English muffins, etc. Such a program would
be far larger than those currently executed
by the G.F.F. and the Wheat Foods Council.
While it has gathered full-throated support
from leading baked foods and milling companies, a number of bakers with businesses
focused principally on the food service sector
have expressed skepticism or even opposition.
Checkoff programs from other industries have
endured for years, even decades because of
their success in generating positive return on
investments. Still, the compulsory nature of
such programs and the presence of government involvement in activities with businesses
that often resist such involvement have meant
that checkoff programs, even longstanding
ones, rarely escape controversy.
Reflecting the mix of opinions about the program, the G.F.F. has reduced the
size of the proposed program to $15 million per year from $23 million tentatively suggested early in 2019. Costs for the program would be borne 85% by
bakers and 15% by flour millers. Costs would be assessed at a rate of 16c per
cwt of wheat flour used to bake breadbasket products.
Christine Cochran, executive director of the G.F.F., said millers and bakers should

LEADING FRESH

hamburger/hot dog buns vendors rolls/bun/croissants vendors
1
2
3
4
5
6
7
8
9

Grupo Bimbo
Flowers Foods Bakeries L.L.C.
Martin's Famous Pastry Shoppe, Inc.
Campbell Soup Co.
Aunt Millie's Bakeries, Inc.
Lewis Bakeries, Inc.
United States Bakery
H&S Bakery
King's Hawaiian Bakery West, Inc.
Private label
Total

Dollar sales
$413,128,842
$251,458,794
$198,709,522
$147,050,051
$49,946,580
$41,700,224
$40,929,155
$32,570,213
$30,004,442
$765,235,548
$2,093,664,082

% change
from
year ago
-6.3%
0.7%
0.6%
13.8%
-4.3%
10.3%
12.0%
-2.1%
4.7%
-2.4%
-1.4%

1
2
3
4
5
6
7
8
9

King's Hawaiian Bakery West, Inc.
Grupo Bimbo
Campbell Soup Co.
Flowers Foods Bakeries L.L.C.
Carrs Food International, Ltd.
Calise & Sons Bakery, Inc.
United States Bakery
Aunt Millie's Bakeries, Inc.
Lewis Bakeries, Inc.
Private label
Total

Dollar sales
$518,820,757
$337,068,529
$105,366,835
$76,799,963
$29,946,392
$27,054,899
$26,547,158
$23,560,184
$17,773,956
$510,152,382
$1,969,011,946

% change
from
year ago
7.0%
1.6%
2.0%
-3.7%
89.0%
-6.4%
2.9%
-7.9%
2.8%
-3.0%
2.6%

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.

12 \ November 2019

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