Flowers Foods, Inc. at its annual leadership meeting on May 3 unveiled plans for a new organizational structure that would divide the company into two business units and realign key leadership roles. The company said the moves are designed to “provide greater focus on the company’s strategic objectives under Project Centennial, emphasize brand growth and innovation in line with a national branded food company, drive enhanced accountability, reduce costs and strengthen long-term strategy.”
Over the next several months Flowers will transition its operations into two business units: Fresh Bakery and Specialty/Snacking. The company’s current Direct-Store-Delivery and Warehouse segments will remain in place until the new structure is in place. Flowers expects full implementation to be in place sometime during fiscal 2018.
“This change in our organizational structure is an important step for Flowers as we take decisive action to focus on the consumer and remove complexity and costs from our business,” said Allen L. Shiver, president and chief executive officer of Flowers Foods. “Strategically dividing our business into Fresh Bakery and Specialty/Snacking will reinvigorate each unit and enable them to take actions to drive growth for their respective brand portfolios and product categories. We also are realigning our leadership structure to better address the changing consumer and operating environment and drive to be a more efficient and effective organization. I am confident our new structure will allow us to achieve our strategic objectives and deliver enhanced value for shareholders.”
Focus on consumers
Flowers’ Fresh Bakery business unit will include the company’s core and growth bread brands, including Nature’s Own, Wonder, Dave’s Killer Bread and Cobblestone Bread Co. The unit’s mission, Flowers said, will be to drive brand growth and profitability through incremental innovation, consistent execution and cost-efficiency.
The new Snacking/Specialty business unit will consist of Flowers’ product lines outside of the retail bread aisle, including the company’s snack cake brands (Tastykake and Mrs. Freshley’s), specialty bread brands (including Alpine Valley), and Flowers’ food service business. The business unit’s mission will be to drive brand growth and profitability through new product innovation and build scale in growing categories, Flowers said.
The new structure also provides for centralized marketing, sales, supply chain, shared-service/administrative and corporate strategy functions, each with clearly defined roles and responsibilities. Highlights of the new structure include:
• A centralized marketing function that will support both units by driving consumer insights, building brand awareness, and developing a leading R.&D. capability
• A new sales organization to provide better interaction with the company’s independent distributor partners
• An enterprise-wide supply chain function to promote greater efficiencies among Flowers’ production and distribution networks
• Expansion of the company’s shared-service and administrative functions, which will allow for greater leverage of Flowers’ scale and continue to deliver ongoing cost containment actions
• A corporate strategy function that will advise the company’s chief executive officer and senior leadership team on long-term strategy, acquisitions and other corporate development activities.
New leadership duties
Flowers also detailed a series of changes to the company’s leadership team. The executives will remain in their current roles until the new structure is implemented. The executives’ current and future positions are:
• R. Steve Kinsey, currently executive vice-president and chief financial officer, will be chief financial and administrative officer.
• Bradley K. Alexander, currently executive vice-president and chief operating officer, will be president, Fresh Packaged Bread.
• David M. Roach, currently senior vice-president of organics, will be president, Specialty/Snacking.
• D. Keith Wheeler, currently president of Flowers Bakeries, will be chief sales officer.
• Stephen R. Avera, currently executive vice-president, secretary and general counsel, will be chief legal counsel.
• Robert L. Benton Jr., currently senior vice-president and chief manufacturing officer, will be chief supply chain officer.
• A. Ryals McMullian Jr., currently vice-president of mergers and acquisitions and deputy general counsel, will be chief strategy officer.
• Tonja W. Taylor, currently senior vice-president of human resources, will be chief human resources officer.
Flowers said it is in the process of searching for a chief marketing officer.
Project Centennial update
In June 2016, Flowers launched Project Centennial, a program designed to evaluate opportunities within the company to streamline operations, drive efficiencies and invest in strategic capabilities. Following the review, Flowers has identified four primary strategic initiatives it plans to transition to beginning in fiscal 2017 with full transition expected by fiscal 2021. The strategic initiatives are:
• Reinvigorate the core business — “Invest in the growth and innovation of our core brands, streamline our brand and product portfolio, improve trade promotion management and strengthen our partnership with distributors so they can grow their businesses.”
• Capitalize on product adjacencies — “Greater focus on growing segments of the bakery category, such as food service, in-store bakery, impulse items and healthy snacking.”
•Reduce costs to fuel growth — “Reduce complexity, and better leverage scale to lower costs.”
• Develop leading capabilities — “Invest in capabilities to become a more centralized and analytics-focused company.”