Janice Anderson, vice president of marketing, Flowers Foods, discusses the latest baking industry trends with editor, Dan Malovany.
It’s all part of the annual process that we do for our upcoming 2009 State of the Industry report.
During the past two months, the editors at Snack Food & Wholesale Bakery magazine have contacted dozens of experts in the industry.
Unfortunately, we once again gathered too much information that won’t make it into our print edition. Fortunately, we have www.snackandbakery.com, where we can publish the “uncut” versions of our interviews.
Check out what Anderson has to say about Thomasville, Ga.-based Flowers Foods, the bread aisle, consumer trends, new products and the overall state of the baking industry.
Snack Food & Wholesale Bakery: How are you tailoring the Nature’s Own brand and its product portfolio to meet changing consumer trends?
Janice Anderson: If you look at Nature’s Own during the years since its 1977 introduction, you’ll see a brand that has embraced changing consumer demands over the decades while remaining true to its core positioning.
When Flowers introduced Nature’s Own soft variety breads, consumers had little to choose from in the bread aisle other than traditional white bread. At the time, however, we saw that consumers were beginning to show interest in what was in their food and in new, healthier alternatives. So we developed Nature’s Own, which offered different bread varieties, all with the softness of white bread, but with no artificial preservatives, colors or flavors. Our core positioning for the brand emphasized quality, flavor and freshness. The line included some varieties that are still in the Nature’s Own lineup today, such as 100% whole wheat.
Nature’s Own is a consumer-driven brand. We pay close attention to current and emerging consumer trends and see how we can translate those trends into successful new Nature’s Own varieties.
Looking at how the Nature’s Own brand has changed over the years is like looking at a snapshot of eating trends through the decades.
In the 1980s, Flowers introduced one of the first low-calorie breads on the market-Nature’s Own Light breads. The line is still available and in late 2008, in response to consumer concerns about sodium intake, we reduced the sodium in our light breads by 25%. These breads are still only 40 calories per slice and an excellent source of fiber.
In the early 1990s, we realized there were many consumers who wanted to boost their nutritional intake, but did not want to give up their white bread. So in 1991, we rolled out Nature’s Own Whitewheat, which has the taste and texture of white bread, but the nutritional benefits of wheat. Whitewheat is an excellent source of calcium and iron and a good source of fiber. We were well ahead of the trend with Whitewheat, the “original healthy family white bread,” which is now one of our best-selling brands.
In the late 1990s, we became aware of the growing popularity of no-sugar diets. Unlike typical fad diets, however, this one tapped into the concerns of consumers with diabetes and other health conditions who needed to carefully watch their sugar intake. In 1999, Nature’s Own Sugar Free bread hit the market, one of the first commercially produced sugar-free breads available.
In the early 2000s, the entire baking industry watched Americans embrace low-carb diets. In response, we developed Nature’s Own Wheat ‘n Fiber, a lower carbohydrate bread introduced in 2004. Again, we were well ahead of the curve and were the first wholesale baker to have a commercially produced, lower-carb bread on the market. While the low-carb fad has passed, we still offer Wheat ‘n Fiber, which again is enjoyed by many people who are watching their weight or who are on restricted diets for health reasons. Also in 2004, we introduced Double Fiber Wheat, which has 50 calories and 5 g. of fiber per slice. It also contains Omega-3 and inulin, a prebiotic that promotes good digestive health, enhances immunity and improves calcium absorption.
As the industry began to beat the whole grain drum, we boosted our whole grain emphasis within the Nature’s Own line. We have offered a 100% whole wheat bread since the 1970s, but consumers were telling us that they wanted more whole grain options. Up to this point, Nature’s Own had been strictly a soft variety bread brand. That changed in 2006, when we rolled out a complete line of Nature’s Own premium specialty breads. These were whole grain breads and we boldly printed the number of whole grains per slice right on the front of the bag-an industry first. We also expanded Nature’s Own core position of “no artificial preservatives, colors or flavors.” These eight new premium breads were all natural, and we offered two varieties made with organic flour, again in response to consumer trends. Heartier in flavor and denser in texture than our soft variety breads, these premium specialty breads are doing well. Nature’s Own consumers who grew up eating our soft variety breads are now expanding to our premium breads, which still deliver the quality, flavor and freshness they demand from Nature’s Own.
Most recently, we saw an opportunity to extend Nature’s Own into a new section of the bread aisle and reach consumers through a specific eating occasion-breakfast. In 2008, we introduced a full line of breakfast options-Original and Honey Wheat English Muffins, Cinnamon Raisin Swirl and Cranberry Raisin Swirl Breakfast Breads, and Original, Cinnamon Raisin and Honey Wheat Bagels. In keeping with our core positioning, these varieties offered specific health benefits. All are good sources of vitamins A, D and E and calcium. Some also contain whole grain.
Our breakfast line has done very well and we are expanding it at the end of April with six new items: 100-calorie multigrain English muffins, 100% whole wheat English muffins with 24 g. of whole grains per muffin, cinnamon swirl breakfast bread with 9 g. of whole grains per 2 slices, 100% whole wheat bagels with 60 g. of whole grains per bagel, blueberry bagels and an “everything” bagel topped with onion flakes, poppy seeds and sesame seeds. We’re excited about bringing these new varieties to the market. All of them are good sources of vitamins A, D, E and calcium and four of them offer whole grain nutrition.
While I’ve focused here on Nature’s Own breads, I should note that we continue to develop new Nature’s Own and Whitewheat sandwich and hot dog buns that also fit the trends I’ve noted.
SF&WB: How have consumer purchasing patterns in the bread aisle been affected by the current recession?
Anderson: People eat bread in good times and bad and I think all of us in the baking industry are thankful for that.
Our data sources show that bread sales in 2008 remained strong compared to 2007, with soft variety bread being particularly resilient. Private label’s share has had a slight uptick, but not to the level it was back in 2004.
While these are challenging times, our brands are holding their own and we continue to see moderate to good sales increases across all of our bread segments-soft variety, specialty premium and white.
Our goal is to offer consumers value for their food dollar. We believe bread is still a good value in today’s economy. For example, a loaf of Nature’s Own 100% Whole Wheat bread with about 20 slices sells for $2.79 here in Thomasville. This one loaf can make 10 sandwiches for about 30 cents per serving, while providing nutritional fiber and whole grain nutrients.
SF&WB: Conventional wisdom says the baking industry is recession proof. Do you agree or disagree with this statement and why?
Anderson: I don't think any industry is totally recession proof. However, we all know that regardless of the state of the economy, we all have to eat.
Bread is a household staple. A little more than one-fourth of all U.S. grocery-shopping trips include bread, making it the second highest purchased category just behind milk. If you look at all U.S. pantry stocking trips to grocery stores, that number jumps to more than a half, with bread ranking number one, according to [Chicago-based Information Resources Inc.] panel data for 52 weeks ending Nov. 2, 2008.
We don’t expect bread’s popularity to change. Bread crosses all eating occasions and can be the main component of quick, affordable meals. In fact, we are beginning to see renewed interest in sandwiches prepared at home for lunches and dinners. We’re responding by providing consumers with more recipes on our Nature’s Own and Whitewheat Web sites and through our eRecipe Club newsletter.
SF&WB: Where have you expanded retail distribution of your product from a geographic perspective? Moreover, how have your acquisitions in Phoenix and Florida affected sales of the Nature’s Own brand? Cobblestone Mill? Whitewheat?
Anderson: Since 2004, Flowers has expanded its direct-store delivery territory into 13 states (Delaware, Maryland, Ohio, Indiana, Illinois, Missouri, Oklahoma, Kansas, Colorado, Utah, Arizona, Nevada and Southern California) and the District of Columbia. In most of these states, we serve only limited market areas so we have room to grow.
During this same timeframe, we also expanded our reach in those states where we already had a presence, such as Texas, South Carolina and Kentucky.
We have a three-prong growth strategy that involves growing our core markets, expanding geographically and making acquisitions.
Our acquisition of Holsum Bakery in August 2008 has definitely had a positive impact on Nature’s Own and Whitewheat sales. Last October, we introduced select Nature’s Own breads and buns and Whitewheat breads and buns to consumers in Holsum’s territory (Arizona, Southern California, the Las Vegas area and select markets in Utah and Colorado) through Holsum’s independent distributor network. Consumer reception has been very positive. We supported the new market introductions with TV advertising, in-store activities, an online microsite, as well as local market activities. We have not yet implemented our rollout plan for Cobblestone Mill in Holsum’s market.
Our acquisition of ButterKrust Bakery in Lakeland, Fla., also in August 2008, has had no impact on our key brands. ButterKrust provided Flowers with much needed production capacity in the Florida market. Nature’s Own, Whitewheat and Cobblestone Mill already have solid penetration in this market.
SF&WB: What synergies have you seen from your acquisitions of Holsum Phoenix and ButterKrust in Florida? Have you incorporated any of their product lines into your core distribution system?
Anderson: Both Holsum and ButterKrust brought much to Flowers-outstanding production facilities and team members and great opportunities.
Holsum, with two bakeries in Phoenix and Tolleson, gave us needed production capacity in the West and access to new markets. ButterKrust further strengthens our market position in Florida and gives us needed production capacity close to key markets, which helps reduce transportation costs.
We believe consumers are very loyal to their bread brands. When we acquire or merge with another bakery, our strategy is to keep local and regional brands. With Holsum and ButterKrust, we added Holsum, Aunt Hattie’s, Roman Meal and Country Hearth. These branded products continue to be available in Holsum and ButterKrust’s respective territories.
SF&WB: How is the performance of your breakfast lines? What are the key trends in the bagel, English muffin and breakfast bread segments and how is consumer behavior different than in other parts of the day?
Anderson: Any nutritionist will tell you, breakfast is the most important meal of the day and more consumers are getting this message. Yet this was a segment of the bread category where we did not have a significant presence. Our move into the breakfast segment in 2008 with the Nature’s Own brand has gone well. We are very pleased with how these items have performed and consumer loyalty for the Nature’s Own brand has carried over to our breakfast items.
We have been so pleased with the performance of our breakfast items that we [expanded] the line in April.
SF&WB: What new products/marketing efforts have you put toward Cobblestone Mill?
Anderson: We’ve positioned Cobblestone Mill as a special occasion brand of premium specialty baked foods. The brand emphasis is on rolls and buns, though we do continue to offer such specialty breads as rye and sourdough.
With renewed interest in at-home eating, Cobblestone Mill is uniquely positioned to give consumers the opportunity to turn an everyday sandwich or meal into something special with restaurant-quality rolls.
A good example of this is Cobblestone Mill ciabatta rolls, which we introduced in 2008 after seeing the continued interest in ciabatta sandwiches in the foodservice sector. These are rustic rolls with a soft, open texture and chewy crust. Making a sandwich with a ciabatta roll gives consumers the chance to have a restaurant-type meal at home.
SF&WB: Finally, the theme for this year’s State of the Industry is superheroes. That said, what are the biggest forces of good and evil impacting the industry, and why? What does it take to be a superhero in your category, and why?
Anderson: To be a “superhero” in the bread category, you must stand for “taste, quality and value.” You must fight for those ideals every day in the marketplace-even when times get tough. People want their “superhero” to be dependable and trustworthy.
Throughout our company, we work hard to ensure that every loaf of bread, every bun, every snack cake a consumer purchases delivers the same taste, quality and value as their last purchase. I think that’s why we continue to earn our consumers’ loyalty.
Editor’s Note: Check out our 2009 State of the Industry report, which will be mailed to subscribers later in June.