Cake a standalone unit in Flowers Foods realignment

THOMASVILLE, GA. — Flowers Foods, Inc. on July 20 announced a series of changes to the company’s organizational structure. The changes, which became effective July 17, are aimed at heightening the company’s focus on brand growth and separate the Flowers cake operations from its other branded product businesses, the company said.

Flowers also announced the elimination of 250 positions across different departments and job levels “to better balance the resources required to support the company’s business,” the company said. Additionally, Flowers preliminarily announced that earnings in its second quarter climbed double digits from the same period in 2019.

Headlining the organizational structure changes is the consolidation of the company’s Fresh Packaged Bread business unit and its Specialty/Snacking business unit. H. Mark Courtney, who had been president of the Fresh Packaged Bread business unit, has been named chief brand officer and will lead the consolidated unit.

In his new role, Mr. Courtney will be responsible for managing all Flowers brands, revenue management, shopper marketing (in-store and online promotional) and brand partnership programs. Mr. Courtney has headed the bread business since May 2019.

Flowers innovation has been established as a stand-alone function at the company and will be headed by Debo Mukherjee, chief marketing officer. Mr. Mukherjee has been chief marketing officer at Flowers since joining the company in 2017.

David M. Roach, who most recently was president of Snacking/Specialty business unit, has been named president of Cake Operations. Mr. Roach will focus exclusively “on improving that area of the business,” Flowers said. The Flowers cake business has struggled to find its footing in the seven years since the Hostess Brands cake business reemerged from bankruptcy and as a major competitor. Mr. Roach has been with Flowers since 1992.

With the changes, the Flowers foodservice business will be separated from the Snacking/Specialty business unit and will fall under the company’s sales function, which is led by D. Keith Wheeler, chief sales officer.

A. Ryals McMullian, president and chief executive officer, said the changes followed a thorough organizational review over the past six months and will be combined with a new portfolio strategy aimed at “unleashing the full potential of our brands and innovation efforts.”

“We believe that these changes are more consistent with our strategic priority to focus on our brands and that they will bring a more structured approach to innovation,” he said. “This will enable us to build on the strengths of our brands and bring our customers and consumers more new and exciting products.

“Our new structure now unites all brand teams under Mark’s leadership and enables greater collaboration and better resource allocation among our brand portfolio. Debo will guide the development of an innovation capability to bring new and exciting offerings to our consumers that go beyond line extensions. This innovation function will also partner more closely with our corporate development group to seek out acquisition and investment opportunities that fit within our overall portfolio strategy. Importantly, while we have already addressed some operational inefficiencies within our cake bakeries, we expect that David’s full attention to this area should drive quicker progress and capture significant opportunities to improve the profitability of that business.”

The new structure represents an update from a 2017 organizational restructuring that had created two business units — Fresh Bakery and Specialty/Snacking. Before that, Flowers had operated with a Direct-Store-Delivery and a Warehouse segment.

A little more than two weeks before announcing second-quarter financial results, Flowers preliminarily said second-quarter earnings, adjusted for special items, will be 30¢ to 33¢ per share on the common stock, which compares with 25¢ per share in the second quarter of 2019. The company said sales growth in the quarter versus last year was in the range of 4.5% to 5%. Flowers cautioned that the company has not yet completed its financial closing process and that final results could differ materially from the preliminary figures.

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