'Changing dynamics' leitmotif of baking in 2015

by Josh Sosland
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The discussion of fourth-quarter financial results by the nation’s largest baking company was prefaced with an expression becoming all too familiar to industry observers: “While changing marketplace dynamics impacted performance…” Grupo Bimbo S.A.B. de C.V. went on to cite an increasingly competitive marketplace as background for challenges experienced by the company during the quarter.

Changing marketplace dynamics caught attention in other major baking industry announcements of recent days. Flowers Foods, Inc., in acquiring the trademark rights to sell the Roman Meal bread brand in the United States, effected a transaction underscoring the sweeping change that has transpired in the whole grain segment of the bread market during the past several years. Similarly, leadership and strategic changes announced for the baking and snack division of Campbell Soup Co. suggest a dramatically different future ahead for the business that includes Pepperidge Farm, Inc.

In stating results, Bimbo detailed a number of positives in its financials, including widening profit margins as measured by ongoing costs. The company affirmed it has benefited from restructuring in connection with its acquisitions of recent years and in response to the marketplace changes it has witnessed. Those positives underscore the underlying attractiveness and even elements of stability in the midst of this period of “changing marketplace dynamics.”
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