Ryals McMullian formally took over for Shiver, who announced his retirement in February after 41 years with the company. McMullian joined Flowers in 2003, moving to COO last July.
Bradley K Alexander – who previously headed the company’s Fresh Packaged Bread unit, has returned as COO – a position he held from 2014 to 2017. Alexander has worked at Flowers since 1981 in various positions, including sales, operations and marketing.
He helped create the fresh packaged bread business in 2017 as part of Flowers’ overarching restructuring – known internally as ‘Project Centennial.’ In that role, he “built a best-in-class team, integrated that team into our new organizational structure and developed an atmosphere of creativity, accountability and execution,” said McMullian.
Mark Courtney, who landed at Flowers in 1983 and most recently held the role of senior VP of retail accounts, now leads the fresh breads portfolio – including Nature’s Own, Dave’s Killer Bread, Wonder and as of late 2018 Canyon Bakehouse.
Pivoting to brands and consumers
Sales jumped nearly 5% in the first quarter to $1.26bn – a record, according to McMullian. Excluding Canyon, net sales were still up 3%.
“New marketing capabilities and a more brand-focused organization have generated a robust innovation pipeline, and we’re excited about the recent introduction of new bread and snack-cake items,” said McMullian in the most recent earnings call.
Earlier this year, Flowers rolled out a new brioche loaf under the Nature’s Own brand, a ‘touch of honey’ hamburger bun from Wonder and sweet snacks inspired by ice cream from Tasty Cake.
“Our realigned organization has driven our team to be hyper-focused on building powerful brands, connecting meaningfully with our consumers and improving profitability,” he added.
“We’re also gaining insights from enhanced analytical capabilities that help to provide heightened transparency in our business but also inform better strategic decision-making."
McMullian sees a bright future ahead for Flowers, but he attributes its stable roots to Shiver’s M&A decisions.
“The transformation underway here at Flowers is a major undertaking, but it’s also absolutely necessary if we’re going to compete effectively in a complex, 21st century marketplace," said McMullian.
“I want to thank [Shiver] for having the courage to set us on the course we find ourselves on today. It took a lot of conviction to embark on what ultimately became Project Centennial, and to upend longstanding notions of what success looks like in our company and in our industry. He has created a really solid foundation for us to build on, and for that we owe him a debt of gratitude.”
Making (organic) moves
In his final earnings call on May 15, outgoing CEO Shiver said, “Over the past four decades, I have seen this company grow from a regional bakery to a national powerhouse, with leading brands and a strong foundation for future growth and value creation.”
Established in 1919, Flowers owns 47 manufacturing facilities in 18 US states, employing more than 9,000 people. Its $4bn in annual sales makes it the second-largest producer of packaged baked goods in the US.
That steady standing in the market required a bit of reinvention.
In 2015, Flowers bought Dave’s Killer Bread – which pioneered the seeded bread category – for $275m; the organic, non-GMO baker operates as an independent subsidiary, but has been integral to its parent company’s upward trajectory.
“The category segments posting the strongest growth in dollars and units are organic and gluten-free specialty loaf breads,” Shiver said in a call with analysts.
“With Dave’s Killer Bread and now Canyon Bakehouse, Flowers has top brands in both of these attractive segments.”
The 100-year-old company scooped up Canyon, which makes frozen gluten-free breads, buns and bagels, for $205m in November 2018. Sales of that portfolio are expected to land between $70m and $80m this year.
Last October, Flowers also secured the rights to produce and distribute Sun-Maid Raisin bread across the US. Together, Sun-Maid and Canyon have accounted for one-third of Flowers’ recent growth, according to Shiver.
Additionally, he added, “With Nature’s Own and Wonder, we have a strong and growing position in the traditional loaf segment, which is the category’s largest in both dollars and units.”
