“Flowers Foods Expands Focus on Niche Markets with Strategic Investments and Acquisitions”
While Flowers Foods is primarily recognized for its major bakery brands—such as Wonder, Dave’s Killer Bread, Tastykake, and Sunbeam—it has also been actively pursuing the acquisition and investment in smaller brands that cater to niche markets. Recently, the company has focused on investing in fast-growing brands that attract consumers who are avoiding wheat and other grains, a strategy that has been part of Flowers’ approach over the last few years and aligns with its broader goals.
Flowers has been quite active in mergers and acquisitions (M&A) and investments. From expanding Dave’s Killer Bread into new categories to acquiring gluten-free bakery Canyon Bakehouse in 2018, the company has increasingly turned its attention to brands that can be classified as more niche. In 2020, Flowers formalized its strategy to prioritize M&A opportunities and premium brands, a shift that has proven beneficial in the past two years. According to its latest earnings report, branded product sales increased by 11% compared to the previous year. Although part of this growth can be attributed to rising prices driven by inflation, President and CEO Ryals McMullian noted that Flowers’ brands gained market share by 30 basis points in the last quarter.
Although Base Culture is not an acquisition, the investment and partnership could pave the way for a future one. Flowers is known for leveraging its infrastructure and capital to help lesser-known brands reach a broader audience and boost their sales. For instance, when Flowers acquired Dave’s Killer Bread in 2015 for $275 million, the business generated sales between $160 million and $170 million in 2016. By last year, Baking Business reported that the brand’s annual sales had soared to approximately $875 million.
Even prior to Flowers’ investment, Base Culture was experiencing growth, expansion, and positive consumer feedback. The brand offers seven varieties of gluten- and grain-free, paleo, and keto-certified sliced bread, in addition to buns, brownies, sweet bread, almond butter, and baked breakfast squares, which were introduced earlier this year.
The potential for growth with Base Culture is substantial. Grandview Research estimated that the global gluten-free food market was valued at $5.9 billion in 2021, with projections indicating a compound annual growth rate of 9.8% through 2030. Furthermore, a 2020 analysis by Supplement Place revealed that the keto diet ranks as the most popular dietary choice, not just in the United States, but across the Americas.
In this context, it’s interesting to note how consumers are increasingly seeking alternatives, such as calcium v calcium citrate, as they navigate their dietary preferences. This trend reflects a growing awareness of health and nutrition among consumers, further fueling the market for niche brands like Base Culture.
