Innovation through acquisition
Perhaps the largest “gap filler” in 2015 was a baking company that didn’t actually introduce new products during the year. Trying to establish a broad presence in the rapidly growing market for organic baked foods, Flowers Foods, Inc., Thomasville, Ga., made two major acquisitions in the category — Dave’s Killer Bread (D.K.B.) and Alpine Valley Bread.
At the time of the acquisitions, Allen L. Shiver, president and chief executive officer of Flowers Foods, painted a promising picture for the outlook of organic bread.
“Over 80% of American families include some organic foods in their shopping carts,” he said. “And the interest in organic breads in particular is broad, appealing to a wide variety of households from millennials to boomers.”
Organic bread remains at an early stage in its growth cycle, he said.
“One factor that supports the robust growth outlook for organic breads is that household penetration of organic breads is low when compared to other food staples such as produce and milk,” he said. “We believe one of the limiting factors has been distribution. For the most part, organic breads have not been made available through an extensive and service-oriented distribution system. We will leverage Flowers’ distribution strengths in D.S.D. and warehouse to reach more retailers and additional consumers in new geographies.”
D.K.B. has steadily broadened its product lineup over the years, and its most recent introduction, dubbed White Bread Done Right, fits into the pattern of a specialty niche.
At the time, early in 2015, the product was promoted as the organic sliced white bread with the most whole grains, at 20 grams per sandwich. Flowers is working to expand distribution of White Bread Done Right through more of the company’s direct-store delivery network.
Similarly, Flowers has focused more on the marketplace positioning of Nature’s Own, its leading bread brand, than on new product introductions.
The company has initiated a new advertising campaign with the key message of “Good and Simple.”
“Acknowledging that most Americans live complicated lives where time and technology challenges make it harder for families to connect, the new campaign reminds people that good bread and good sandwiches are simple things that can help us connect,” the company said.
The campaign is running in select markets and includes print, billboards, on-line video, social media and in-store advertising.
Sliced bread for c-stores
Also filling a distinctive niche in the bread category is Hostess Brands L.L.C. The company’s entry product for the sliced bread category was developed with convenience stores and drugstores, rather than supermarkets, in mind. Hostess bread was formulated to allow a 60-day shelf life, which the company believes will be ideal in channels where direct-store delivery is economically impractical.