THOMASVILLE, Ga., April 11, 2012 /PRNewswire/ -- Flowers Foods (NYSE: FLO) today announced plans to expand the production facility of its subsidiary in Oxford, Pa., and add a new bread production line that will help the company provide fresh bread to its growing market in Pennsylvania. The company's decision to invest approximately $31 million in the project over the next two years is based on the expectation that the project will receive economic support and assistance from the commonwealth of Pennsylvania. When completed in 2013, the new bread production line will add approximately 77 jobs at the Oxford bakery. Flowers also will add a bun production line to the bakery in the future to meet market demand at an additional cost of approximately $18 million.
George E. Deese, Flowers Foods' chairman and CEO, said the company's plan is in keeping with Flowers' growth strategy to reach 75 percent of the U.S. population with its fresh baked foods and to grow sales 5 percent to 10 percent annually. He noted that the Oxford expansion project has received support from state and local officials. "When we acquired Tasty Baking Company in 2011, we recognized the growth opportunity for the iconic Tastykake brand and for offering our Nature's Own breads in Tasty's markets. We know the Oxford bakery has room to expand, and adding bread production there will enhance our ability to serve the market. While this expansion will add bread capacity in our Tasty Oxford bakery, Tastykake snack cake production will continue at our Philadelphia Navy Yard and Oxford bakeries."
The company anticipates that the expansion will fall within a Keystone Opportunity Zone and that it will receive additional economic support from the commonwealth. The company is working with the Governor's Action Team, State Senator Dominic Pileggi, State Representative John Lawrence, the Commissioners of Chester County, the Oxford Borough Council, and the Oxford Area School District Board of Directors. Senator Pileggi was the author of legislation that recently expanded the number of Keystone Opportunity Zones available within the commonwealth.
Deese said the project will add 90,000 square feet to the Oxford bakery to house a high-speed bread line that will produce soft variety and specialty breads under Nature's Own and other company brands. Construction is expected to begin this summer. The bread line, which is anticipated to be running by summer 2013, will provide employment opportunity for approximately 77 people, bringing employment at the Oxford bakery to approximately 222 when the bread line is completed.
Flowers acquired the Oxford bakery, along with the Tasty bakery in Philadelphia, last May. The Oxford bakery is currently 172,000 square feet, has five production lines for donuts, honey buns, and cakes sold under the popular Tastykake brand, and employs 145 people.
Regarding Nature's Own, Allen L. Shiver, president of Flowers Foods, said that demand for the country's best-selling soft variety bread brand continues to grow in the mid-Atlantic market and parts of Pennsylvania. "Currently, Nature's Own whole grain and wheat breads are available to more than 50 percent of the U.S. population. Nature's Own breads have been available outside of Philadelphia for a few years now, and we've been pleased with the response we've received from consumers. In two weeks, we will begin introducing Nature's Own into Philadelphia supermarkets. This market expansion means another 1 percent of the population will have access Nature's Own." The breads are being shipped fresh daily to Philadelphia from other Flowers bakeries until the Oxford bread line is operating.
When Flowers acquired Tasty Baking last year, the company said Tasty's access to new markets for Nature's Own was an attractive aspect of the deal along with the Tastykake brand. Since the acquisition, Flowers has expanded Tastykake's geographic reach to Flowers' direct-store-delivery markets in the South and Southwest. With those additional markets, Tastykake snacks are now available to more than half of the U.S. population. Shiver said both Nature's Own and Tastykake brands have significant growth potential in their respective new markets as greater consumer awareness and brand acceptance are achieved.
About Flowers Foods
Headquartered in Thomasville, Ga., Flowers Foods is the second largest producer and marketer of packaged bakery foods for retail and foodservice customers in the United States with annualized sales of approximately $3 billion. Flowers operates 41 bakeries that produce a wide range of bakery products sold through an extensive direct-store-delivery network that encompasses the Southeast, Mid-Atlantic, and Southwest as well as select markets in the Northeast, California and Nevada, and nationwide through other delivery systems. Among the company's top brands are Nature's Own, Whitewheat, Tastykake, and Mrs. Freshley's. For more information, visit www.flowersfoods.com.
About Tasty Baking Oxford
Tasty Baking Oxford, located at 700 Lincoln Street, produces honey buns, donuts, and cakes that are sold under the Tastykake brand. The bakery has five production lines that produce approximately 600,000 pounds of cakes a week. The bakery was built in 1988 by a previous owner. It has been producing Tastykake snacks since 1997. The bakery is a subsidiary of Flowers Foods.
About Nature's Own
Flowers introduced Nature's Own, with no artificial preservatives, colors, or flavors, in 1977. Since then, Nature's Own has become America's No. 1 soft variety bread brand and has grown into a full line of soft variety and specialty premium breads and buns and breakfast items. Well-known for quality and innovation, Nature's Own was among the first brands on the market with a low-calorie bread (1980s), sugar-free bread (1999), lower carbohydrate bread (2004), and double fiber bread with omega-3 (2004). More recently, Nature's Own introduced a line of specialty premium breads with whole grains (2006), a line of Special Morning breakfast breads, bagels, and English muffins (2008), and Nature's Own Sandwich Rounds and Thin Sliced Bagels (2010). For more information on Nature's Own, visit www.naturesownbread.com.
Statements contained in this press release that are not historical facts are forward-looking statements. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from those projected. Other factors that may cause actual results to differ from the forward-looking statements contained in this release and that may affect the company's prospects in general include, but are not limited to, (a) competitive conditions in the baked foods industry, including promotional and price competition, (b) changes in consumer demand for our products, (c) the success of productivity improvements and new product introductions, (d) a significant reduction in business with any of our major customers including a reduction from adverse developments in any of our customer's business, (e) fluctuations in commodity pricing, (f) our ability to fully integrate recent acquisitions into our business, and (g) our ability to achieve cash flow from capital expenditures and acquisitions and the availability of new acquisitions that build shareholder value. In addition, our results may also be affected by general factors such as economic and business conditions (including the baked foods markets), interest and inflation rates and such other factors as are described in the company's filings with the Securities and Exchange Commission.