THOMASVILLE — Flowers Foods is gearing up for a changing landscape in the food industry, company leaders said Thursday morning.
Flowers Foods executives laid out the challenges for the company and the strategy for meeting those at the company’s annual shareholders meeting, held at the Thomasville Municipal Auditorium.
“As we approach our 100th anniversary, the food industry is experiencing a great deal of change,” said Allen Shiver, president and CEO of Flowers Foods. “That change is opening up new opportunities for all of us and especially at Flowers Foods.”
With the company’s 100th birthday coming in 2019, Flowers Foods has launched “one of the most important projects in our recent history,” Shiver said. Project Centennial will establish two business units, fresh bakery and specialty/snacking brands, and also will realign leadership roles.
“Project Centennial is about preparing Flowers Foods to deliver shareholder value and growth in the years ahead,” Shiver said.
The company also is working to adjust to a changing consumer, Shiver added, now that companies such as Amazon and Walmart sell fresh food that is ordered online and delivered directly to homes.
“What has worked in the past no longer fits new competitive environment we are dealing with today,” Shiver said. “Consumers are shopping differently. Project Centennial will bring significant change to our company so we can compete more effectively in today’s environment and take Flowers Foods to the next level of meaningful growth.
“We did our homework,” Shiver told the assembled shareholders and guests. “We analyzed, assessed, benchmarked and examined every aspect of our business.”
Added chief financial officer Steve Kinsey: “We have seen many changes not just in baking but in consumer preferences.”
The company also will rethink how and where it bakes and take its mindset from local and regional to that of a national brand, Shiver said.
Flowers Foods’ network of independent distributors now has access to 85 percent of the U.S. population and its geographic reach stretches from California to Maine.
Sales from 2011-16 grew by more than $1 billion to $3.9 billion annually for Flowers Foods, and dividends per share have grown from 4 cents in 2004 to an annualized rate of 68 cents per share. With more than $1 billion in sales, Flowers Foods’ Nature’s Own brand is the top-selling bread in the U.S.
Revenue for fiscal year 2017 is expected to range from flat to 2 percent and a soft marketplace affected first quarter results, according to the company. The goal for sales for fiscal year 2019 and beyond is sales growth from 3 to 4 percent.
Company leaders also pointed out the growth in the organic bread market, which Flowers has entered after the purchase of Dave’s Killer Bread and Alpine Valley.
“Dave’s Killer Bread has been a real success for Flowers,” Shiver said. “It give us entree into the premium organic bread category. It has an incredibly loyal fan base of ‘bread heads.’ With DKB and Alpine Valley, Flowers is now the leading producer and marketer of fresh packaged organic bread in the U.S.”
With more people turning to organic products to products that are non-GMO (genetically modified organism), Shiver said the future is bright for Dave’s Killer Bread and Alpine Valley.
“It is so exciting if you look at what is taking place in the food business in general and in the organics sector,” Shiver said. “We are tremendously excited about Dave’s Killer Bread and about Alpine Valley. We are excited about the organic category. It’s growing at an extremely rapid rate and we have the No. 1 brand.”
The company also is aiming toward more sustainability at its facilities, exploring ways to reduce the use of energy and water, Shiver added.
“It’s a lot of change, a lot of opportunities and a lot of hard work,” he said. “This is a multi-year journey to enhance shareholder value.
“We’re excited about the opportunities,” Shiver added. “It is clear there is change ahead. But I have full confidence in the Flowers team at work right now from coast to coast.”
As the company girds for a changing marketplace and new ways of doing business, Shiver insisted one thing will remain steadfast.
“What won’t change is our unique Flowers culture,” he said.