NEW YORK — On the eve of a national roll-out of Dave’s Killer Bread, the Flowers Foods, Inc. executive in charge of the organic line said acceptance of D.K.B. across Flowers’ network of retailers has been outstanding.
Speaking to investment analysts in New York April 13, seven months to the day after the Dave’s acquisition was completed, David M. Roach, senior vice-president/organics of Flowers Bakeries, was, well almost giddy as he discussed the initiative.
“Sometimes I get too fired up about it, so just hang with me as I run through the presentation,” he told the analysts.
“In a short time we’ve been very busy preparing for the official nationwide launch of Dave’s Killer Bread on our D.S.D. (direct-store delivery) network,” he said “This is a big deal, and this is happening on April 25. So we’re just around the corner.”
Flowers announced plans to acquire D.K.B., Milwaukie, Ore., a top organic bread brand, in August 2015 and four weeks later said it would acquire Alpine Valley Bread, Mesa, Ariz., another organic bread baking company.
“I’ve been with this company for, next month it will be 24 years, and the excitement level has never been higher than what I have seen in preparing for the launch of Dave’s Killer Bread,” Mr. Roach said. “We have confidence that combining the No. 1 one organic bread brand in the country with the awesome distributor network that we have out there is going to be something special for us.”
The untapped opportunity for bread in the organic sector is considerable, Mr. Roach said.
“The number of people buying organic foods increased 18% over the past two years and is now estimated that over 50 million people are organic shoppers today,” he said.
While organic produce enjoys 33.9% household penetration and milk has 16.3% penetration, organic bread lags at only 9.6%, he said, citing data from Information Resources, Inc., a Chicago-based market research firm.
He explained, “Why such a big difference in household penetration between bread and the other stables? We believe this is simply due to the limited access to the market for fresh organic bread. This will change significantly when we put the No. 1 selling organic bread in the country, Dave’s Killer Bread, in the market on April 25 on our distributor network.”
Mr. Roach spoke at length about Flowers’ strategy for bringing D.K.B. to market. The products will be sold fresh within the company’s D.S.D. network and will be sold on the bread aisle. Displays will be placed in high traffic areas of supermarkets.
“With consumers increasingly shopping the perimeter of the store, this is where the Alpine Valley brand would be focused,” he said. “The perimeter of the store, the deli bakeries. Alpine Valley will also have access to freezer aisles. So we have two distinct distribution channels that these two brands will be going into it.”
Calling location “key,” Mr. Roach said whether consumers shop in the center of the store or the perimeter, “we want one of our brands to be in their face.”
“It is our expectation that the growth of our organic breads will be highly incremental to our business,” Mr. Roach said. “In the total U.S. our loaf bread brands are very strong in both light and soft variety. One area that we have significant opportunity to grow is in the specialty premium segment. The latest acquisition of Dave’s Killer Bread and Alpine Valley gives us the brands to compete at a high level. I repeat we should be able to compete at a high level with these brands in the specialty premium segment driving incremental sales.”
Groundwork for the launch across the country has been conducted, and it is based on this effort Mr. Roach is optimistic about how D.K.B. will perform.
“Retailer acceptance has been nothing short of remarkable,” he said. “We have retailers calling us asking when can we put it in. They want the product in a big way. Dave’s Killer Bread will have access to over 9,000 new storefronts, dramatically increasing the coverage.”
Even before this roll-out, Flowers has brought Dave’s killer bread to certain new markets — specifically California and Colorado.
“From a production standpoint we immediately began improving production capabilities at Alpine Valley, where we’ll be able to produce as Dave is growing very fast we’ll be able to produce more products there in that facility to produce and service the markets in the Southwest,” Mr. Roach said.
The company also is converting the Flowers’ Tuscaloosa baking plant to bake organic bread.
“This is going to be an awesome, state-of-the-art bakery,” Mr. Roach said. “This bakery will offer us opportunities in the eastern United States which is a big part of the roll-out April 25. This will improve our freshness, lower our transportation costs, as well as increase our margins as we move forward.”
