Flowers c.e.o. identifies opportunities in 2010
February 11, 2010
by Eric Schroeder
NAPLES, FLA. — Price and promotion, sales growth and commodities are among the most important factors expected to weigh on financials at Flowers Foods, Inc. during 2010, company executives said this week at the Deutsche Bank Securities Small and Mid Cap Conference in Naples.
George Deese, chairman and chief executive officer at Flowers, identified price and promotion as the No. 1 concern throughout the food business in 2010, and said Flowers was no exception.
“Our position is that this year we will become less dependent on promotions as we maintain our position of strength in the marketplace,” he said. “Our ability to do so is enhanced because we have strong brands, innovative products, consistent quality and superior execution at store level.”
In terms of sales growth, Mr. Deese said Flowers’ strategy in 2010 is “to maintain the strength of our core sales base, introduce new products and expand our geographic reach for D.S.D. (direct-store delivery) to deliver growth that outpaces the industry.”
Looking specifically at new products, Mr. Deese said Flowers’ new product pipeline has generated an average of 3.5% in new sales in each of the past five years, with the increase even larger in 2009. The company recently introduced Nature’s Own Sandwich Rounds and Nature’s Own Thin Sliced Bagels. Mr. Deese said another new product should hit store shelves in Florida within the next week.
Discussing the company’s position on commodities, Mr. Deese said he’s “real happy” Flowers’ strategy on commodities has worked over time, and said the company is “staying true to form” in 2010.
“Our strategy is to be competitive and to manage our risk,” Mr. Deese said. “We manage our risk by buying commodities and other ingredients at the best price and at the right time to allow us to deliver results in line with our goals and provide a good value to our consumers and our customers. In doing so, we will deliver consistent earnings growth, which will enhance share value over time.”
Overall, Mr. Deese was upbeat about the company’s prospects for the upcoming fiscal year.
“We exited 2009 in a better position than we entered it,” he said. “Our bakeries are more efficient, our brands and product mix stronger and our geographic reach broader. Our team is focused on opportunities to continue growing through new product innovation, acquisitions, expansion markets and further penetration of our core territories to deliver earnings growth for our shareholders over the long term.”