THOMASVILLE, GA. — Flowers Foods Inc. aims to counteract weaker-than-expected category trends in fresh packaged bread and snack cakes by further diversifying its portfolio as consumers seek more health attributes and value.

During the first quarter ended April 19, Flowers said retail sales dropped 2.3% in dollars and 2.5% in units for fresh packaged bread and fell 6.1% in dollars and 5.1% in units for commercial cake. The company noted that softness in traditional loaf and cake sales more than offset gains in other segments.

“We are responding to these pressures by continuing to invest in our brands, evolving our portfolio to enhance current performance and position Flowers to thrive over the long term,” A. Ryals McMullian, chairman and chief executive officer, said in reporting Flowers’ fiscal 2025 first-quarter results.

Overall, branded retail sales in the quarter were down 0.4% in dollars and declined 1.9% in volume. Still, dollar share rose by 80 basis points to 16.7% for bread and by 50 basis points to 5.9% for cake from the previous quarter and was essentially the same for both categories as a year earlier.

“To offset weakness in traditional loaf products, we are adapting quickly to further differentiate our other brands and meet consumers’ desire for products aligned to their interest in health and wellness,” McMullian said. “For example, the Nature’s Own Keto product line is one of the fastest-growing brands in that segment of the category. In the first quarter, we captured the No. 1 share in keto for the first time. To further our growth in this area, we recently introduced keto hot dog buns and a keto multigrain loaf, with a pipeline of additional products following closely behind.”

Other recent launches include Nature’s Own whole wheat, Hawaiian and sourdough small loaves — adding to ancient grain and homestyle white small loaves introduced last year — and a sourdough-style loaf for the gluten-free Canyon Bakehouse brand.

“Consumer interest in sourdough bread has been particularly strong, and we have introduced Nature’s Own and Canyon versions of this popular product to meet that demand,” McMullian said. “As with keto, although we are not the first to market in sourdough, we are confident that our product quality and unique brand attributes will appeal to consumers and fuel additional growth.”

At the same time, Flowers has broadened its offering of smaller package sizes for shoppers seeking more affordable bread options, reduced portions and less waste. That includes this year’s addition of the 12-oz Wonder Mini Classic White loaf.

“To target consumers looking to maximize the value of their purchases, we are growing our line of small loaves, expanding the two Nature’s Own small loaves launched regionally last year to nationwide distribution and adding three new varieties to the lineup,” McMullian said. “Additionally, we recently launched the Wonder mini loaf, featuring the brand’s classic white bread.”

The Wonder brand also figures in a major expansion of Flowers’ sweet baked snacks business, which includes Tastykake and Mrs. Freshley’s. Launched in March, the Wonder sweet snacks line includes donut sticks, confetti cakes, cinnamon twists and rolls, chocolate cupcakes, frosted and powdered mini donuts, glazed and iced honey buns, bite-size crunch donuts and peanut butter wafers.

“In our sweet baked goods business, the Wonder line of cake products is already benefiting our performance, contributing to a 10-basis point unit share gain in the cake category despite being introduced later in the quarter,” McMullian said. “We are on track to exceed our distribution goal for the year, and we are optimistic about the product line’s potential.”

Flowers Said the Wonder baked snacks line contributed to a unit share uptick in the cake category for Q1 despite being launched later in the quarter.

| Source: Flowers Foods

Meanwhile, Flowers continues to see strong traction for its organic Dave’s Killer Bread brand, including DKB’s recent foray into the snack arena, McMullian said. New products include two DKB varieties of rolls (21 Whole Grains and Seeds and Sandwich Rolls Done Right) and DKB Snack Bites, with six varieties offering sweet and savory flavors.

“Our recently launched DKB Snack Bites are off to a great start, and we are on track to exceed our store distribution target this year,” McMullian said. “Encouragingly, a significant portion of buyers are new to the better-for-you snack category, implying that the bites are growing category sales incrementally. And we are building off that strength with the addition of single-serving and new flavor options coming soon.”

The Snack Bites followed the rollouts of DKB Organic Snack Bars in April 2023 and DKB Amped-Up Organic Protein Bars in August 2024.

“Our DKB snack and protein bars continue to grow distribution and velocities,” McMullian said. “To continue that momentum, we are focused on expanding our lineup with new flavors and increasing our use of displays to drive trial and awareness. Similar to the incrementality of DKB Snack Bites, more than 20% of DKB bar buyers are new to the category.”

Thomasville, Ga.-based Flowers closed its $795 million acquisition of Simple Mills during the first quarter. McMullian said the deal reflects a strategic priority for the company: higher-margin, branded retail products, including those catering to consumers’ wellness preferences. Simple Mills’ products include crackers, cookies, bars and baking mixes.

 “As a leading natural snack company, Simple Mills is perfectly positioned to appeal to consumers looking for high-quality, delicious and better-for-you snacks,” he said. “And Simple Mills intends to meet that growing demand, bringing innovation to extend its product portfolio and expanding distribution. That work is translating into strong results. For example, in the first quarter, Simple Mills was the fastest-growing natural cracker brand and fourth fastest-growing total cracker brand in tracked channels.

“The integration is progressing well, as we find efficient, mutually productive ways to collaborate and connect. Our teams are working closely to leverage each other’s strengths, and we are already making progress in areas such as procurement and enhanced retailer engagement. Our capital allocation priority is to quickly return to a more-normalized leverage ratio, enabling us to explore further opportunities with a ‘growthier,’ better-for-you nutritional profile.”

On the distribution front, Flowers had identified convenience stores — a growing retail channel — as a key expansion channel across its portfolio.

“We are also focused on seeking out new white space for growth,” McMullian said. “Convenience stores, where our penetration rate is low, represent one of the most promising areas of opportunity. Our expanded snacking portfolio, with DKB snacks, Wonder cake and now Simple Mills, better positions us to make inroads in this large and attractive channel. In recognition of the potential opportunity, we are investing in new capabilities, supplementing our team to accelerate our progress.”