Shiver suggests gradual reopening of Hostess plants
NEW YORK -- While stating that the shuttered baking plants of Hostess Brands, Inc. will play a part within the constellation of Flowers Foods, Inc. bakeries, Allen L. Shiver, president of Flowers, suggested the Hostess plants will be reopened gradually over time, as dictated by market demand.
Any such re-openings will be “careful and considered,” he said.
In broad, general terms, Mr. Shiver commented on the pending Hostess acquisition during an investor’s day presentation March 20 at the New York Stock Exchange.
He noted the company will pay $360 million for 20 baking plants, 38 depots and five bread/roll brands – Wonder, Merita, Home Pride, Nature’s Pride and Butternut.
While declining to offer specific plans about the reintroduction of Wonder and other Hostess bread brands into the marketplace, Mr. Shiver described an approach in which the acquired brands would be offered first in existing Flowers markets. Only later, as the company expands its overall business geographically, would plant re-opening be considered.
“Once the transaction is completed, we plan to reintroduce Hostess bread brands through and outside our current service area,” he said. “Our plans are to continue expanding to parts of the country where we do not currently have distribution. As we do so, we expect to introduce Hostess bread brands to those new areas.”
He noted that Flowers for many years has pursued a growth strategy of “methodical” expansion into new regions from existing Flowers bakeries.
“As we enter new regions we will build access to retail and food service customers in those new markets,” he said. “We’ll set up appropriate distribution systems. We’ll re-open bakeries as consumer demand for our products grow. As we continue to expand, this strategy will continue. We intend to expand in the new regions from our current territories, growing sales and then add or re-open production capacities for that growth.
“The Hostess bakeries fit with our growth strategy. Our growth in the new areas will be careful and considered as it always has been. We’re excited about the growth opportunities the Hostess bakeries and the Hostess brands bring to Flowers.”
Mr. Shiver’s remarks shed little light on the company’s plans about when or whether it would re-open Hostess plants it is acquiring in existing Flowers markets. The plants include Jacksonville and Orlando, Fla.; Alexandria, La.; Rocky Mount, N.C.; and Knoxville and Memphis, Tenn.