THOMASVILLE, GA. — Flowers Foods, Inc. is testing a “right-sized” package of its Cobblestone Bread Company bread in select markets, said Allen L. Shiver, president and chief executive officer of Flowers.
The Cobblestone initiative was discussed by Mr. Shiver during a conference call Aug. 13 in connection with the company’s second-quarter financial results.
As previously reported, Flowers’ net income in the quarter ended July 18 was $51,760,000, equal to 24c per share on the common stock, up 23% from $42,064,000, or 20c per share, in the second quarter of 2014. Net sales were $888,795,000, up 1.8% from $872,791,000.
Plans for a major relaunch of the Cobblestone brand were first announced in March 2014, and the company has been spare since then in sharing specific details of the brand’s progress.
“The Cobblestone brand continues to come into its own, further developing the premium specialty bread and roll categories where Flowers has so much growth opportunity,” Mr. Shiver said of during the call.
Of the smaller packages, Mr. Shiver said the selection is aimed at the needs of consumers in smaller households or others looking to have a variety of bread choices in their pantry.
“While still early, the response so far has been encouraging,” he said.”
During the call, Mr. Shiver was asked about the profit margins that may be expected from a smaller loaf and whether Nature’s Own and other brands may be candidates for smaller loaf packaging as well. In response, Mr. Shiver offered a few more details about the product.
“We’re encouraged about Cobblestone Bread Company, the right-size loaf, 18-oz loaf and with 11 slices,” he said. “The market tests that we’ve been conducting have been very successful. The margins on this product are good margins. As we look at the roll-out, we’re optimistic it’s going to be a source of new business. We don’t have plans to move the smaller loaf into other brands at this point.”
When plans for the Cobblestone relaunch were first announced with considerable fanfare in a 2014 investor day at the New York Stock Exchange, the effort was described as “a new concept and a new brand” targeted toward a younger generation.
Even as the Flowers executives work to make Cobblestone Bread a success, other avenues toward reaching a younger generation are being pursued. On Aug. 12, the company announced plans to acquire Dave’s Killer Bread for about $275 million in cash. A leading baker of organic bread in the United States, D.K.B. sells bread varieties with names that include Blue’s Bread, Good Seed and Rockin’ Rye.