Milling & Baking News Corporate Profiles - 2019 - 74

COMPANY OVERVIEW

Flowers Foods, Inc.
Years of change capped by leadership transition
ince launching Project Centennial in
2017, Flowers Foods, Inc. has been taking what the company characterizes as
a "multi-year" journey to redesign the Thomasville, Ga.-based baking company. The effort
reached a major milestone in 2019 with a leadership transition in a market environment the
company has continued to find difficult.
In May, A. Ryals McMullian Jr. was named
president and chief executive officer, succeeding Allen L. Shiver, who has retired. Mr. McMullian most recently was chief operating officer
at Flowers. He has been with the company for
16 years, first as associate general counsel. He
later was promoted to vice-president of mergers and acquisitions and chief strategy officer.
As c.o.o., he was responsible for executing the
company's strategies to drive growth and expand margins through cost savings and operating efficiencies under Project Centennial. He
also has had oversight of the company's two
business units (Fresh Packaged Bread and
Snacking/Specialty), supply chain and sales. In
addition, he maintained oversight of corporate
strategy and ventures and communications.
With Mr. Shiver's retirement and Mr. McMullian's elevation to c.e.o., Bradley K. Alexander was promoted to c.o.o. He most

recently was president of Flowers' Fresh
Packaged Bread Business Unit and in his
new role is responsible for oversight of the
company's Fresh Packaged Bread and Snacking/Specialty Business Units, supply chain
and sales.
Reflecting on what has transpired at Flowers since 2017, Mr. McMullian in May described
a "clear shift of the collective mindset" within
the company. He said the company has shifted
"from one that was really more operationally and technically focused to one that's now
deeply strategic, forward-looking and accountable for executing with excellence."
Mr. Shiver added, "Since launching Project
Centennial in 2017, our company has restructured into a more brand- and consumer-focused
organization, and we continue to take actions
to improve efficiencies and enhance profitability. With our transformation well underway
and solid momentum in our business, it's the

right time for this leadership transition."
While pleased with the execution of Project
Centennial and how the company is positioned
in the marketplace, the environment for baking
companies has not grown more favorable. Amid
a tight labor market and other rising costs, the
company in August lowered its earnings guidance for the balance of the year. Flowers shares
fell 11% in early trading Aug. 8 on the New
York Stock Exchange, dipping as low as $21.64
per share. As of mid-October, Flowers shares
were trading at about $22.
The company's profitability challenges are
frustrating, Mr. McMullian said, particularly after the heavy lifting done to make the business
more efficient. Still, the company will continue
to invest in its brands, he said.
"Many of you will remember originally the
plan was to reinvest a portion of our Centennial savings back into the business and then
let the remainder fall to the bottom line," he
said. "However, greater-than-anticipated cost
increases have offset some of those remaining savings, and so we've not yet been able to
fully realize our earnings potential. So in short,
one could argue that we're a little heavy on
cost due to those investments. Now the easy
course of action would be to cut costs in those

Chief executive officer -
A. Ryals McMullian Jr.

Flowers Foods, Inc. net income

Flowers Foods, Inc. net sales

Flowers Foods share price

per share
$25

$164

2016

74 \ November 2019

$150

2017

$157

2018

in millions

$23
$21

$3,927

$3,921

$3,952
$19

2016

2017

2018

$17
Oct.
2018

Dec.

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Milling & Baking News Corporate Profiles - 2019

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