Corporate Profiles - 2023 - 12

GRAIN-BASED FOODS
sandwich buns and rolls, that sort of thing. The trend toward premiumization
is definitely still there. Clearly, consumers are still looking
for bargains, but that trend is headed in the right direction from our
standpoint as we look to build our branded business. "
The weak unit volume trends did not encompass the entire bread
category. Certain specialty bread segments performed well, including
crusty/meal bread up 2.2% ($353 million in dollar sales), sweet bread
up 6% ($54 million), panini/ciabatta/focaccia bread up 20% ($34 million)
and Hispanic bread up 2.7% ($1.3 million).
Still, unit volume weakness was a fact in bread and across many
baked foods categories. Unit volume sales of buns for the year ended
July 16 were down 2.1%, dinner rolls were down 3%, sandwich buns
were down 10%, and specialty rolls were up 35%. Bagel unit volume
was up 2.2%, English muffins were down 8%, pita was down 12%,
wraps were down 12%, and croissants were down 8%.
M&A ACTIVITY HEATS UP
Within the fresh baking category merger and acquisition activity was
far lighter in the bread segment than in the red hot snack cake segment,
which featured an agreement by J.M. Smucker Co. to acquire Hostess
Brands, Inc. for approximately $5.6 billion. The impending sale of Hostess,
which was acquired 10 years earlier for about $400 million by a
group led by Metropoulos & Co., would be the largest transaction ever
for a fresh baked foods company, more than double the next largest
transaction.
For comparison, recent acquisitions in the bread category include
FGF Brands Inc. buying Weston Foods Inc. for $1.2 billion; Grupo
Bimbo acquiring East Balt Bakeries for $650 million in 2017; and
Flowers Foods, Inc. purchasing Dave's Killer Bread in 2015 for $275
million.
Earlier major transactions include Bimbo's purchase of Sara Lee
Bakery in 2010 for $1 billion, Bimbo's purchase of other major Weston
brands in 2008 for $2.4 billion, Sara Lee's 2001 acquisition of Earth
Grains for $1.9 billion and Interstate Bakeries' purchase of Continental
Baking Co. from Ralston Purina for $550 million. The latter deal included
the snack cake business Smucker is acquiring, 28 years later, for
more than $5 billion.
While more modest than the Hostess or any of the above referenced
transactions, the past year has not been without small- to
medium-sized acquisitions in the bread category. Bimbo was the
most active buyer. In July, Bimbo Bakeries USA, a subsidiary of
Grupo Bimbo, acquired National Choice Bakery in South St. Paul,
Minn. Financial terms of the transaction were not disclosed. Founded
in 1990 as Twin City Bagel Inc. with a focus on providing the local
trade with fresh bagels on a daily basis, National Choice Bakery
manufactures European-style bagels (water boiled, hearth baked)
for the retail and foodservice industries. The company makes fresh,
refrigerated, frozen and thaw-and-sell bagels in a variety of sizes.
12 \ October 2023
LEADING FRESH CENTER STORE
hamburger/hot dog buns vendors
Dollar sales
1 Grupo Bimbo SAB de CV
2 Flowers Foods Bakeries LLC
3 Campbell Soup Co.
4 Martin's Famous Pastry Shoppe, Inc.
5 Lewis Bakeries, Inc.
6 United States Bakery
7 King's Hawaiian Bakery West
8 Aunt Millie's Bakeries, Inc.
9 Pan-O-Gold Baking Co.
Private label
Total
$834,257,906
$422,607,565
$314,206,538
$103,341,654
$95,376,096
$82,712,862
$76,270,496
$76,038,220
$43,375,859
$869,149,254
$3,092,441,361
LEADING FRESH CENTER STORE FULL-SIZE
donuts vendors
% change
from
1 Grupo Bimbo SAB de CV
2 Hostess Brands LLC
3 JAB Holding
4 McKee Foods Corp.
5 Flowers Foods Bakeries LLC
6 Clyde's Delicious Doughnuts
7 Carolina Foods, Inc.
8 United States Bakery
9 Maple Donuts, Inc.
Private label
Total
Dollar sales
$401,806,459
$291,761,315
$175,627,754
$161,618,122
$77,034,327
$26,778,190
$22,656,388
$21,101,264
$12,716,900
$36,108,565
$1,256,491,845
year ago
11.7%
14.0%
7.1%
15.1%
0.6%
18.3%
32.5%
5.8%
21.0%
9.1%
10.9%
Data for 52 weeks ended July 16, 2023
Total US - Multi-outlet with C-Store (Supermarkets, Drugstores and Mass Market Retailers,
Gas/C-Stores, Military Commissaries and Select Club & Dollar Retail Chains)
Source: Circana OmniMarket Integrated Fresh
Three months before that, Grupo Bimbo announced it had acquired
Natural Bakery Ltd. in Winnipeg, Man. The transaction was disclosed
April 27 by Daniel Servitje, chairman and chief executive officer, during
Bimbo's first-quarter earnings call. Natural Bakery was established in
1957 by members of the Mikalauskas family, new immigrants to Canada
from Lithuania. In addition to its Canadian rye, the company's products
include Bavarian rye, Baltic rye, Hanover rye, Old World rye and
pumpernickel, together with products including 6-grain bread, crusty
white, french and paska bread. The company's products are sold across
much of western Canada.
Also in the specialty bakery category, Flowers Foods in February said
it had completed the acquisition of baking manufacturer Papa Pita Bakery.
Papa Pita is based in West Jordan, Utah, where its primary brands
are Papa Pita, Bubba's Bagels, Great Grains and Maya's Tortillas. Papa
Pita co-manufactures products for other brands. Papa Pita had been a
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Corporate Profiles
% change
from
year ago
15.2%
8.6%
6.4%
6.6%
23.5%
19.5%
32.5%
7.5%
15.7%
18.9%
13.8%
INDUSTRY REVIEW: grain-based foods
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Corporate Profiles - 2023

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