Flowers Foods: Announces Organizational Realignment

Thomasville / GA. (ff) Flowers Foods Inc., producer of Nature’s Own, Wonder, Tastykake, Dave’s Killer Bread, and other bakery foods, announced organizational structure changes designed to increase focus on brand growth, product innovation, and improving cake business operations. The changes, effective July 17, 2020, include the following actions:

• The consolidation of the company’s Fresh Packaged Bread business unit and Specialty/Snacking business unit into a single function responsible for all brands. Mark Courtney, previously president of the Fresh Packaged Bread BU, has been named chief brand officer and leads this function. In this newly created role, Courtney is responsible for managing all Flowers brands, as well as its revenue management, shopper marketing (in-store and online promotional) and brand partnership programs.
• The establishment of a stand-alone innovation function under the direction of Debo Mukherjee, chief marketing officer.
• The appointment of David Roach, most recently president of the Snacking/Specialty BU, to the newly created position of president of Cake Operations, where he will focus exclusively on improving that area of the business.
• The repositioning of the company’s foodservice business from the Snacking/Specialty BU to the Sales function, which will continue to be led by Keith Wheeler, chief sales officer.

In commenting on the announcement, Ryals McMullian, Flowers Foods’ president and chief executive officer, said, «These changes, alongside a revised portfolio strategy, are designed to unleash the full potential of our brands and innovation efforts and are the result of a thorough organizational review we conducted over the past two quarters as part of our portfolio optimization initiative. We believe that these changes are more consistent with our strategic priority to focus on our brands and that they will bring a more structured approach to innovation. This will enable us to build on the strengths of our brands and bring our customers and consumers more new and exciting products.»

McMullian continued, «Our new structure now unites all brand teams under Mark’s leadership and enables greater collaboration and better resource allocation among our brand portfolio. Debo will guide the development of an innovation capability to bring new and exciting offerings to our consumers that go beyond line extensions. This new innovation function will also partner more closely with our corporate development group to seek out acquisition and investment opportunities that fit within our overall portfolio strategy. Importantly, while we have already addressed some operational inefficiencies within our cake bakeries, we expect that David’s full attention to this area should drive quicker progress and capture significant opportunities to improve the profitability of that business.»

Other Restructuring Actions

McMullian noted that the company has eliminated approximately 250 positions across different departments and job levels to better balance the resources required to support the company’s business. Flowers currently employs approximately 9,700 employees.

«This organizational alignment is the result of a company-wide evaluation of our overhead structure,» he said. «While we regret losing these team members, this move directly supports our strategic priorities to reduce the complexity of our business, improve our margins, and ensure we have the right resources in place to sustain long-term growth. I want to express my sincere appreciation to those affected by these actions for their contributions.»

Preliminary Second Quarter Results

Flowers provided preliminary information regarding its performance in the second quarter, which ended July 11, 2020. Net sales are currently expected to increase approximately 4.5 percent to 5.0 percent over the prior year second quarter and GAAP earnings per share expected to be in the range of USD 0.25 to USD 0.28. Earnings per share, adjusted for matters affecting comparability, are expected to be in the range of USD 0.30 to USD 0.33.

The company has not completed its quarter-end closing process and, accordingly, these preliminary results reflect estimates based on currently available information and may differ materially from actual operating results. The company will disclose its final results for the second quarter after market close on August 06, 2020.