IBIE, special edition & show preview -- 2013 - (Page 16)

STATE OF THE INDUSTRY that accounted for 60% of the branded bread market have left the business. Looking at the top six baking companies at the time, the combined branded bread sales of the exiting business were $2.8 billion, or 65% of sales. Taking the lead With its acquisition of the Sara Lee and Weston baking businesses, Grupo Bimbo gained an unprecedented degree of leadership in US wholesale baking. Its dollar sales in 2012 totaled $2.5 billion, or 37% of branded sales, as measured by IRI. The figure included supermarkets, drugstores, mass market retailers and certain club and dollar stores. Over the same period, Bimbo’s sales eclipsed private label sales of $2 billion, marking the first time since the advent of scanner data that any single company’s branded sales outshone the private label market. As recently as 2009, private label sales of $1.8 billion were well over double those of the largest baker of the time — George Weston, then at $752 million. Bimbo’s sales in 2012 also more than doubled the $1.1 billion of Flowers Foods’ sales over the same period. That spread above the nation’s second-largest baker should narrow, though, as Flowers grows its business in California (acquired as part of a consent agreement between Bimbo and the Justice Department in the Sara Lee acquisition) and as Flowers begins operating Hostess Brands’ plants. Being the largest did not make business easy for Bimbo in 2012. Bimbo’s dollar sales of fresh bread fell 3.5% from the year before, and unit volume sales slipped 2.9%. Other leading bakers enjoyed gains with the exception of Hostess. Flowers’ dollar sales climbed 4.5%; Pepperidge Farm, Norwalk, CT, rose 4.8%; Lewis Brothers Bakeries, Evansville, IN, grew 6.5%; La Brea 16 / SPECIAL EDITION / IBIE 2013 Bakeries, Los Angeles, bumped 0.2%; and United States Bakery, Portland, OR, increased up 12%. In many cases, sales gains were partly or largely attributed to Hostess’ demise. The overall bread market saw a 1.5% drop in dollar sales and a 2.5% drop in unit sales. Private label, too, lost ground — down 3% in dollar sales and 2.9% in unit sales. For Bimbo, declining sales also were reflected in weaker income in 2012. The company’s US operating profits in 2012 were 1,118 million pesos, down 68% from 3,500 million pesos the year before. While under considerable pressure and reflecting weaker margins (1.4% vs. 6.5% in 2011 and compared with 11.2% the company earned in Mexico in 2012), the business was still far larger and more profitable than was the case in 2008 before the Weston acquisition. In that year, Bimbo operating profits totaled 128 million pesos in the US and sales were 18,049 million pesos (vs. 78,927 million pesos in 2012). For Flowers Foods, the largest US-based publically traded baker, the last three years have been highly successful by a number of measures yet also more challenging. In mid-May, the company’s shares were trading on the New York Stock Exchange at $32.56 per share, just beneath its 52-week high of $33.25. The May price was up 75%, adjusted for dividend payments, from where the stock was trading in 2010 at the last Expo, and the price was up 161% from the closing price in the fall of 2007. The performance far eclipsed the Standard & Poor’s 500 index, which was nearly flat over the same period. Still, profit growth at Flowers has stalled. Net income of $136 million in 2012 was not far above the $134 million earned three years earlier. MBN A changing of the guard Amid all the other changes facing the nation’s largest baking companies, the top three each completed a transition at the top executive level, as did Canada’s biggest baker. In April, Fred Penny succeeded Gary Prince as president of Bimbo Bakeries USA, Horsham, PA. Mr. Prince remained with Grupo Bimbo SAB de CV, Mexico City, as a corporate senior vice-president, reporting to Bimbo CEO Daniel Servitje. At Flowers Foods, Thomasville, GA, Allen L. Shiver, the company’s president, succeeded George E. Deese as CEO, effective May 22. Mr. Deese was elected executive chairman, effective the same day. The third major change atop a baking company was effected earlier. In July 2012, Irene Chang Britt became president of Pepperidge Farm, Norwalk, CT, a business unit of the Campbell Soup Co. She succeeded the longtime Pepperidge executive Pat Callaghan, who retired. While she has considerable experience at Campbell, most recently as senior vice-president and chief strategy officer for the company since 2010, Ms. Britt came to Pepperidge new to the baking industry. North of the border, Jairo Senise took over as president of Weston Foods, Inc., Toronto, ON, in March 2012 with the retirement of Ralph Robinson. Mr. Senise, a native of Brazil, was previously president and CEO of Gruma Corp., parent company of Mission Foods.

Table of Contents for the Digital Edition of IBIE, special edition & show preview -- 2013

IBIE, special edition & show preview -- 2013
Table of Contents
IBIE Perspective - Amid challenges, opportunities persist
State of the Industry - Dizzying changes among baking’s leaders
A changing of the guard
Making Baking History - Progress on Parade
Capital Spending Survey - Making the safe bet
Survey reaches wide sample
IBIE Tech - Going Mobile
ABA Perspectives - Big changes since IBIE 2010
ABA: On the Front Lines
Keep on track with FTRAC
Let's Keep on Truckin'
An Ounce of Prevention
BEMA Initiatives - Collaborative Solutions
Critical Issue: FSMA - Predict & Prevent
Court orders FDA to step up its efforts
Food Safety: ANSI/ASB/Z50.2
Equipment Advances - Clean and Simple
Formulating R&D - Brave New World
Intel about ingredient trends
Critical Issue: Commodity Prices - Long and Winding Road
Ingredients: Creating Simple Labels - Simple Options
Critical Issue: Sodium Reduction - How Low Can You Go?
Ingredients: Ancient Grains - What's Old is New Again
New Product Trends: Baked Foods - Change Afoot
New Product Trends: Snacks - Reinventing Snack Time
Special Section: Bake
The Next Cupcake?
Ingredient Transparency
Food trucks on the move
New Tech Tools
IBIE 2013: A World of Possibilities
Ready to Launch
Pizza Popularity
Revel in Vegas
2013 Exhibitor List
Ad Index

IBIE, special edition & show preview -- 2013