BOULDER, COLO. — Stephen Hughes, chairman and chief executive officer of Boulder Brands Inc., has identified six strategies for the remainder of 2014 and throughout 2015, and two of the six focus squarely on baked foods: frozen bakery and dual placement with in-store bakery.
In making his case for focusing on frozen bakery, Mr. Hughes said Udi’s remains the No. 1 gluten-free baked goods brand in the freezer, and the brand continues to drive innovation.
“Just as we use the natural channel for innovation and product introductions, we will utilize the frozen bakery door for our innovation in the gluten-free baking products,” Mr. Hughes said in a Nov. 6 conference call with analysts to discuss third-quarter financial results. “This strategy allows us to optimize our mix, innovate, and lead with the gluten-free consumer, as entry into the category typically starts in the freezer.”
The second strategy revolving around baked foods has to do with dual placement with the in-store bakery department.
“This quarter we launched a flanker line of Udi’s bakery items called Udi’s Florence Street Bakery to be merchandised on racks in the ambient bakery section,” Mr. Hughes said. “This will be a second placement for the Udi’s baked goods, as we expect to maintain our frozen placement. Currently this line can be found in just a few retailers, as we are vetting the proof-of-concept, before we go to all retailers. That said, we are encouraged with the velocities of our early adopters such as Target and Safeway.”
Throughout the conference call, Mr. Hughes lauded the success of Udi’s, including the brand’s 21% sales growth during the third quarter behind distribution gains and increased product velocities. He said he anticipates even more growth for the brand behind four unique growth platforms.
“One is we are making tremendous progress in club and getting great velocities on the bread in club,” he explained. “The second is Papa Murphy’s is the first of what we think will be a number of major large restaurants that embrace either gluten-free pizza crust or gluten-free buns.
“The third is in-store baked, which the velocities we are seeing are 50% to 100% higher than the frozen products in the store. We are not a seeing significant amount of cannibalization in the store early, but a big incremental opportunity for the bakery.
“And the fourth is frozen. I mean, the reality is the grocery products are the most competitive because it’s the easiest — lowest barriers to entry, which is what Glutino is doing. There has been a lot of new competition that co-packers can do. But to do bakery, to do food service and to support these large customers, and to do club and support that kind of volume, and to do frozen, there really are not other brands out there that have the platform to do that.”Boulder Brands sustained a loss of $132,159,000 in the third quarter ended Sept. 30, which compared with a loss of $1,582,000 in the same period a year ago. Sales, meanwhile, increased 13% to $133,865,000 from $118,512,000.