A fresh beginning
March 22, 2013
by Eric Schroeder
Like several segments of the grain-based foods industry, the fresh buns and rolls category is in a state of flux as Irving, Texas-based Hostess Brands, Inc. enters the final stages of the sell-off of most of its brands and assets.
In late February, Flowers Foods, Inc., Thomasville, Ga., emerged as the highest and best bid for the largest bread brands and related assets of Hostess. Included in the victorious bid were Hostess brands, including Wonder, Nature’s Pride, Merita, Home Pride, and Butternut. Both Wonder, with dollar sales of more than $61 million, and Merita, with sales approaching $24 million, are among the top 20 hamburger and hot dog bun brands, according to data from Chicago-based market research SymphonyIRI Group for the 52-week period ended Feb. 24.
Meanwhile, Hostess awaited word last week on whether Portland, Ore.-based United States Bakery, also known as Franz Family Bakeries, would emerge as the winner for several of its bread brands in the Pacific Northwest, including the Sweetheart brand, which was sold in the Idaho, Montana and North Dakota bread areas for more than 64 years and is known for its hot dog and hamburger buns. The acquisition would boost United States Bakery’s presence in the hot dog and hamburger bun category, which currently stands at about $30 million in sales.
According to SymphonyIRI, hamburger and hot dog bun sales for Hostess totaled $80,876,380 in the 52 weeks ended Feb. 24 on unit sales of 40,432,860. Dollar sales of Merita hamburger and hot dog buns were $23,977,800 on unit sales of 11,497,520. Meanwhile, dollar sales of all other fresh rolls/buns/croissants at Hostess totaled $27,501,910 in the period.
Big boost to Flowers
The addition of the Hostess brands should boost Flowers’ share of the hamburger and hot dog bun category to more than 12% from about 8%. Currently, Flowers is the No. 2 player in the category (behind Bimbo Bakeries USA) with dollar sales of $153,450,100, according to SymphonyIRI. In the wake of Hostess’ departure from the market Flowers’ dollar sales rose 7% from the same period a year ago, the research firm noted.
The biggest spike came from growth within the company’s Nature’s Own brand, where dollar sales increased 29% to $36,237,890 on a 27% gain in unit sales to 15,033,660. Flowers’ Sunbeam hot dog and hamburger buns rose 5% in the period to $43,427,760 on a 6% increase in unit sales.
Bimbo also benefits
Bimbo Bakeries, Horsham, Pa., also has benefited from the dwindling presence of Hostess in the marketplace. In the 52 weeks ended Feb. 24, dollar sales for the company’s hamburger and hot dog buns totaled $472,924,400, up nearly 4% from the same period a year ago, while unit sales increased 5% to 195,018,700. The company has seen particularly strong sales from the Ball Park brand that was brought into the fold when the company acquired the North American fresh bakery business of Sara Lee Corp. late in 2011.
In the 52 weeks ended Feb. 24, dollar sales of Ball Park hamburger and hot dog buns were $96,187,290, up 71% from the same period a year ago on a 78% gain in unit sales to 42,769,340. Bimbo did not see similar success in Sara Lee Soft & Smooth, down 25% to $64,058,950, or Sara Lee, down 21% to $32,798,430.
Bimbo also ranks as the top player in the all other fresh rolls/buns/croissants category tracked by SymphonyIRI. In the 52 weeks ended Feb. 24, dollar sales at Bimbo Bakeries in the segment were down 7% to $419,399,500, contributing to an overall decline of 1% for the total category.
Bimbo Bakeries later this year will begin construction on a new $75 million bakery in Macungie Township, Pa., that will produce bread and buns for the Northeast. The bakery is expected to begin operation in early 2014.
Helping offset some of the decline in the all other category were strong results at King’s Hawaiian Holding Corp., Torrance, Calif. The company’s products generated sales of $225,663,200 in the 52 weeks ended Feb. 24, up 13% from the same period a year ago, according to SymphonyIRI. Unit sales for the period were up 8% to 94,737,790.
Buns getting whole grain boost at McDonald’s
ROSEMONT, ILL. — The decision of McDonald’s USA to use bakery-style buns with whole grains and English muffins with whole grains, as well as offering oatmeal, amounts to selling 836 million servings with whole grains per year, said Jerry Volkman, director of product innovation and development for McDonald’s USA. He spoke Feb. 28 at the Institute of Food Technologists’ Wellness 13 in Rosemont.
The bakery-style buns used in premium chicken sandwiches have 16 grams of whole grains. McDonald’s USA sells 218 million servings per year of the sandwiches.
The English muffins used in Egg McMuffins have 8 grams of whole grains, Mr. Volkman said. McDonald’s USA sells 400 million servings per year of Egg McMuffins. The company considered having 16 grams of whole grains in each English muffin but decided against it, Mr. Volkman said. He said McDonald’s never wants to change a core product so radically that it upsets people who have bought the product for 30 or 40 years.
The product development approach at McDonald’s USA starts with taste, Mr. Volkman said. Product developers also seek to enhance perceived quality, such as through the use of clean/simple ingredient labels and local sourcing. Nutrition, such as whole grains, also fits into product development.