Dive Brief:
Flowers Foods, the maker of Nature’s Own, Dave’s Killer Bread, Wonder and Tastykake, announced organizational structure changes the company said would increase its focus on brand growth, product innovation and improving its cake business operations. As part of the move, Flowers said in a statement it will be eliminating 250 jobs, or about 2.6% of its 9,700 workforce.
Flowers’ restructuring will include combining its fresh packaged bread business unit and specialty/snacking operation. The company said it expects to post earnings per share of 30 cents to 33 cents a share, compared with the FactSet consensus of 23 cents cited by MarketWatch.
“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,”  Ryals McMullian, Flowers Foods’ president and CEO, said in a statement. 

Dive Insight:
Flowers is no stranger to restructuring. The packaged bakery foods maker announced a restructuring plan and cost-reduction strategies in 2017 that resulted in a net headcount drop of approximately 450 people, including a 15% reduction in management positions.
Still, the reorganization announced today for Flowers comes as the company announced promising profit and sales forecasts for its second quarter, so it’s highly unlikely the change hints at broader problems taking place at the company. In announcing the changes, Flowers’ chief said it would allow the Georgia-based food producer to do a better job focusing on its brands and “bring a more structured approach to innovation” that would attract more consumers to its offerings.
The bread category has been affected by many of the same trends impacting other parts of the food industry. Consumers are flocking toward more nutritious, whole grain, ethnic and organic products. While Flowers is represented in these categories through brands such as Alpine Valley in organic and Canyon Bakehouse gluten free and Mi Casa tortillas, it’s most well known for Wonder Bread, Butternut Bread, Nature’s Own and Dave’s Killer Bread. It also has a small selection of portable sweets like Tastykake and Mrs. Freshley’s that cater to the indulgent, on-the-go consumer.
The new reorganization will make it easier and faster for Flowers to incorporate more trends into a growing number of its brands. As consumer tastes and eating habits change, and more small upstarts enter the space, it’s incumbent on companies such as Flowers to remain as nimble as they can when it comes to innovating. The industry also faces growing competition from private label that forces brand names to continue to push rather than solely depend on their household staples.
Flowers, with $4.1 billion in annual sales in 2019, joins other large food manufacturers who are consistently looking for ways to improve their operating structure. The food and beverage industry has been especially hard hit by job cuts as companies constantly adjust their staffing needs in response to product demand, desire to streamline operations or efforts to reduce spending. Kellogg has been at the forefront of this trend with its Project K cost-cutting program. Nestlé, TreeHouse Foods, Coca-Cola and Kind are just a few other companies that have cut jobs in recent years.


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