US bakery Flowers Foods blames consumer trends for poor sales

USA – US bakery Flowers Foods has blamed bread category weakness, the widespread use of GLP-1 weight-loss drugs, which have been linked to changing consumer attitudes, as well as the rise of the Make America Healthy Again movement, for lower-than-expected sales.

“Turning to weakness in the bread category, the causes are difficult to isolate, but some attribute it to a variety of factors, including an economic slowdown, GLP-1s, and healthier eating trends,” the company’s CEO Ryals McMullian said.

In the Q4 period, ended 28 December, the company’s net sales were down 1.6% year-on-year at US$1.11bn but net income was up 20.9% to US$43.1m and adjusted EBITDA was up 6.3% at US$102.4m.

Over the full-year, net sales were up 0.2% compared to 2024, at US$5.10bn, while net income was up 101% to US$248.1m and adjusted EBITDA was up 7.3% at US$538.5m.

McMullian said that Flowers had documented for several quarters a consumer shift away from traditional loaves toward more differentiated and premium ones, but pointed out that the company is successfully adapting to meet changing consumer demands.

McMullian also noted that much of the pressure in the category has been focused on sweet baked goods and traditional loaf products such as white and wheat bread.

“I am pleased to report that due to our brand investments, gains in organics, keto, buns and rolls, and gluten-free, more than offset softness in those more traditional segments,” he said.

Flowers is also attempting to shift its portfolio towards healthier products via M&A. Last month, it acquired local better-for-you biscuit and snack-bar maker Simple Mills for US$795m.

McMullian commented that this acquisition increases the firm’s exposure to better-for-you and attractive snacking segments, diversifies their category exposure and enhances their growth and margin prospects.

M&A specialists believe the bakery industry is well placed to attract acquisition interest from investors and food manufacturers this year, with the speciality sector, particularly better-for-you and other niche areas, attracting much of the attention.

For full-year 2025, Flowers expects net sales of approximately US$5.40bn to US$5.48bn, representing growth of 5.9% to 7.5%. But excluding the impact of the Simple Mills acquisition, this dips to US$5.18bn to US$5.25bn (1.5% to 3.0% growth). Adjusted EBITDA is forecast to be US$560m to US$591m (US$526m to US$554m, excluding Simple Mills).

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