FLOWERS FOODS, INC. COMPLETES ACQUISITION OF SIMPLE MILLS

Rhea-AI Summary

Flowers Foods (NYSE: FLO) has completed the acquisition of Simple Mills, a leading natural brand specializing in better-for-you crackers, cookies, snack bars, and baking mixes. The acquisition aims to strengthen Flowers Foods' presence in premium snacking segments and diversify its category exposure.

Simple Mills, founded in 2012, has established itself as the leading brand in natural channel crackers, cookies, and baking mixes, with distribution in over 30,000 stores nationwide. The company focuses on producing nutritious products using high-quality ingredients.

Flowers Foods, headquartered in Thomasville, Ga., reported net sales of $5.1 billion in 2024 and is one of the largest packaged bakery foods producers in the United States. The company's portfolio includes prominent brands such as Nature's Own, Dave's Killer Bread, Wonder, Canyon Bakehouse, and Tastykake.

Positive

• Expands presence in premium better-for-you snacking segments
• Adds distribution network of over 30,000 stores nationwide
• Enhances growth and margin prospects
• Diversifies product category exposure

Negative

• None.

Insights

Financial Analyst

This strategic acquisition marks a pivotal transformation for Flowers Foods, positioning the company to capture a larger share of the premium better-for-you snacking market. Simple Mills' established presence in the natural channel, particularly as the leading natural cracker brand in MULO (Multi-Outlet) retail, provides Flowers Foods with immediate category leadership in high-growth segments.

The deal offers three key strategic advantages:

• Portfolio Diversification: Expands beyond traditional bakery into premium snacking categories with higher margins
• Distribution Synergies: Leverages Flowers Foods' extensive distribution network to accelerate Simple Mills' growth beyond its current 30,000-store footprint
• Innovation Pipeline: Enhances R&D capabilities in better-for-you products, addressing evolving consumer preferences

The acquisition aligns with the broader industry consolidation trend, where major food manufacturers are acquiring innovative natural brands to modernize their portfolios. With Flowers Foods' $5.1 billion in net sales, the company has the financial and operational resources to accelerate Simple Mills' growth while maintaining its premium positioning and clean-label credentials.

The integration presents both opportunities and challenges. While Flowers Foods can leverage its distribution infrastructure and retail relationships, maintaining Simple Mills' brand authenticity and premium positioning will be crucial. The success of this acquisition will largely depend on Flowers Foods' ability to preserve Simple Mills' innovative culture while scaling operations efficiently.

THOMASVILLE, Ga., Feb. 21, 2025 /PRNewswire/ -- Flowers Foods, Inc. (NYSE: FLO) today announced that it has completed the acquisition of Simple Mills, a market-leading natural brand offering premium better-for-you crackers, cookies, snack bars, and baking mixes.

"The addition of Simple Mills to our brand portfolio increases our presence in better-for-you and attractive snacking segments, diversifies our category exposure, and enhances our growth and margin prospects," said Ryals McMullian, chairman and CEO of Flowers Foods. "We look forward to supporting the Simple Mills team as they embark on a new phase of growth by broadening distribution, accelerating innovation, and amplifying brand awareness, while advancing their mission."

About Flowers Foods

Headquartered in Thomasville, Ga., Flowers Foods, Inc. (NYSE: FLO) is one of the largest producers of packaged bakery foods in the United States with 2024 net sales of $5.1 billion. Flowers operates bakeries across the country that produce a wide range of bakery products. Among the company's top brands are Nature's Own, Dave's Killer Bread, Wonder, Canyon Bakehouse, and Tastykake. Learn more at www.flowersfoods.com.

About Simple Mills

Founded in 2012, Simple Mills is a leading provider of better-for-you crackers, cookies, snack bars, and baking mixes made with simple and nutritious high-quality ingredients that deliver extraordinary taste. The Company has disrupted center-aisle grocery categories to become the leading cracker, cookie, and baking mix brand in the natural channel, and the leading natural cracker brand in MULO with distribution in over 30,000 stores nationwide. Its mission is to revolutionize the way food is made to nourish people and planet. For more information, visit www.simplemills.com.

FLO-CORP FLO-IR

Forward-Looking Statements

Statements contained in this press release and certain other written or oral statements made from time to time by Flowers Foods, Inc. (the "company", "Flowers Foods", "Flowers", "us", "we", or "our") and its representatives that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to current expectations regarding our business and our future financial condition and results of operations and are often identified by the use of words and phrases such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "should," "will," "would," "is likely to," "is expected to" or "will continue," or the negative of these terms or other comparable terminology. These forward-looking statements are based upon assumptions we believe are reasonable. Forward-looking statements are based on current information and are subject to risks and uncertainties that could cause our actual results to differ materially from those projected. Certain factors that may cause actual results, performance, liquidity, and achievements to differ materially from those projected are discussed in our Annual Report on Form 10-K for the year ended December 28, 2024 (the "Form 10-K") and may include, but are not limited to, (a) unexpected changes in any of the following: (1) general economic and business conditions; (2) the competitive setting in which we operate, including advertising or promotional strategies by us or our competitors, as well as changes in consumer demand; (3) interest rates and other terms available to us on our borrowings; (4) supply chain conditions and any related impact on energy and raw materials costs and availability and hedging counter-party risks; (5) relationships with or increased costs related to our employees and third-party service providers; (6) laws and regulations (including environmental and health-related issues and the impacts of tariffs); and (7) accounting standards or tax rates in the markets in which we operate,  (b) the loss or financial instability of any significant customer(s), including as a result of product recalls or safety concerns related to our products, (c) changes in consumer behavior, trends and preferences, including health and whole grain trends, and the movement toward less expensive store branded products, (d) the level of success we achieve in developing and introducing new products and entering new markets, (e) our ability to implement new technology and customer requirements as required, (f) our ability to operate existing, and any new, manufacturing lines according to schedule, (g) our ability to implement and achieve our corporate responsibility goals in accordance with regulatory requirements and expectations of stakeholders, suppliers, and customers; (h) our ability to execute our business strategies which may involve, among other things, (1) the ability to realize the intended benefits of completed, planned or contemplated acquisitions, dispositions or joint ventures, such as the acquisition of Simple Mills, (2) the deployment of new systems (e.g., our enterprise resource planning ("ERP") system), distribution channels and technology, and (3) an enhanced organizational structure (e.g., our sales and supply chain reorganization), (i) consolidation within the baking industry and related industries, (j) changes in pricing, customer and consumer reaction to pricing actions (including decreased volumes), and the pricing environment among competitors within the industry, (k) our ability to adjust pricing to offset, or partially offset, inflationary pressure on the cost of our products, including ingredient and packaging costs; (l) disruptions in our direct-store-delivery distribution model, including litigation or an adverse ruling by a court or regulatory or governmental body that could affect the independent contractor classifications of the independent distributor partners, and changes to our direct-store-delivery distribution model in California, (m) increasing legal complexity and legal proceedings that we are or may become subject to, (n) labor shortages and turnover or increases in employee and employee-related costs, (o) the credit, business, and legal risks associated with independent distributor partners and customers, which operate in the highly competitive retail food and foodservice industries, (p) any business disruptions due to political instability, pandemics, armed hostilities, incidents of terrorism, natural disasters, labor strikes or work stoppages, technological breakdowns, product contamination, product recalls or safety concerns related to our products, or the responses to or repercussions from any of these or similar events or conditions and our ability to insure against such events, (q) the failure of our information technology systems to perform adequately, including any interruptions, intrusions, cyber-attacks or security breaches of such systems or risks associated with the implementation of the upgrade of our ERP system; and (r) the potential impact of climate change on the company, including physical and transition risks, availability or restriction of resources, higher regulatory and compliance costs, reputational risks, and availability of capital on attractive terms. The foregoing list of important factors does not include all such factors, nor does it necessarily present them in order of importance. In addition, you should consult other disclosures made by the company (such as in our other filings with the Securities and Exchange Commission ("SEC") or in company press releases) for other factors that may cause actual results to differ materially from those projected by the company. Refer to Part I, Item 1A., Risk Factors, of the Form 10-K and our subsequent filings with the SEC for additional information regarding factors that could affect the company's results of operations, financial condition and liquidity. We caution you not to place undue reliance on forward-looking statements, as they speak only as of the date made and are inherently uncertain. The company undertakes no obligation to publicly revise or update such statements, except as required by law. You are advised, however, to consult any further public disclosures by the company (such as in our filings with the SEC or in company press releases) on related subjects.

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SOURCE Flowers Foods, Inc.

FAQ

What is the strategic importance of Flowers Foods' acquisition of Simple Mills?

The acquisition strengthens FLO's presence in better-for-you snacking segments, diversifies its category exposure, and enhances growth and margin prospects while adding Simple Mills' distribution network of over 30,000 stores.

What are Simple Mills' main product categories acquired by FLO?

Simple Mills produces premium better-for-you crackers, cookies, snack bars, and baking mixes, with leading positions in natural channel categories.

What was Flowers Foods' (FLO) revenue in 2024?

Flowers Foods reported net sales of $5.1 billion in 2024.

How many stores carry Simple Mills products prior to the FLO acquisition?

Simple Mills products were distributed in over 30,000 stores nationwide before the acquisition.

What are the main brands in Flowers Foods' (FLO) portfolio?

Flowers Foods' top brands include Nature's Own, Dave's Killer Bread, Wonder, Canyon Bakehouse, and Tastykake.