Milling & Baking News - August 14, 2018 - 4

Contents

August 14, 2018 Vol. 97, No. 12

INGREDIENT MARKET INSIGHTS

NEWS Comment

Story on Page 1

Good riddance to
lousy quarter
for baking

Changing crop prospects
trigger wide swings in
wheat futures
Milling Technology

9

C.H. Guenther & Son acquires
Cookietree to expand in baking

10

Pinnacle benefits from
'renovated' gluten-free business

11

Ramon Laguarta named chief
executive officer of PepsiCo

12

Numerous forces weigh on
Flowers results, full-year outlook

17

RXBAR acquisition helps lift
quarterly results at Kellogg

Cookietree Bakeries produces thaw-and-serve
cookies, bake-and-serve cookie dough, brownies
and scones to restaurants, club stores and retailers.

Savage, Bartlett
complete merger
of business
DEPARTMENTS

7
9
11
12
19
26
30
34
37
38
39
49
54

Editorial
Business
People
Financial Results
Industry Activities
Milling Technology
Weather Outlook
Data
Merchandising
Education and Research
Ingredient Week Trends
Supplier Innovations
Archive

▼

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Page 26

A bread launched early in the year lifts the
Udi's brand within the Boulder business unit.
Pinnacle Foods' second-quarter net income
more than doubles.

The president of PepsiCo will take over for
Indra Nooyi, who led the company for 12 years,
during which revenue grew more than 80%.

The company cuts its earnings guidance after
dealing with shipments of inferior yeast, higher
ingredient costs and decreases in manufacturing
efficiencies.

Second-quarter net income rises 112% as the
company benefits from strong sales and brand
investment. The RXBAR brand drives sales
growth.

COMPANIES IN THIS ISSUE

Agspring ......................................................... 8, 28
Arbor Private Investment Co. ................................. 1
Bartlett and Co.................................................... 26
Bob's Red Mill Natural Foods ............................... 11
Brolite ................................................................. 49
Bunge Ltd. .......................................................... 11
Cargill ................................................................... 9
C.H. Guenther & Son ............................................. 9
Consolidated Grain and Barge Co. ....................... 28
Cookietree Bakeries............................................... 9
Corbion nv .......................................................... 15

4 / August 14, 2018

Milling & Baking News

Flowers Foods, Inc. .............................................. 12
General Mills, Inc................................................... 9
George Weston Ltd.............................................. 16
Hostess Brands, Inc................................................ 1
J&J Snack Foods Corp. ......................................... 15
JSG Commodities ................................................ 19
Kellogg Co. ................................................... 17, 37
Mars Wrigley Confectionery ................................. 20
Nutriati, Inc. ........................................................ 49
Olympus Partners .................................................. 1
Panera Bread Co.................................................. 10
Peak Rock Capital ................................................. 8

With financial reporting winding down for
the second quarter of 2018, it's fair to say
the period is one that won't be missed by
baking executives. Both Hostess Brands,
Inc. and Flowers Foods, Inc. released
financial results last week that fell shy
of expectations and triggered share price
declines. In both instances, executives said
unexpected developments made the quarter
significantly worse than anticipated. At
Flowers, problems associated with faulty
ingredients from a yeast supplier cost the
company millions of dollars. Hostess faced
greatly reduced promotional support from
and sales to a prominent retail customer.
Both companies struggled with higher costs
and tight labor markets.
Hostess and Flowers were not alone
among publicly traded baking companies
in their tribulations. Bimbo Bakeries USA
sustained an operating loss in the second
quarter, Aryzta L.L.C. has been struggling
for an extended period, and more recently,
Pepperidge Farm, Inc. initiated a major
product recall due to tainted ingredients.
Conditions are expected to remain
difficult. "We believe the inflationary
pressures of the C.P.G. (consumer packaged
goods) industry are systemic and here to stay
for the balance of 2018 and into 2019," said
Andrew P. Callahan, Hostess president and
chief executive officer. On the other hand,
both Hostess and Flowers cited positives in
the underlying baking market and/or how
their individual companies are positioned
for success. Capitalizing on those strengths
will be crucial in the face of continued major
challenges. MBN

PepsiCo, Inc..................................................... 9, 11
Perdue AgriBusiness .............................................. 9
Pinnacle Foods, Inc. ............................................. 10
PLT Health Solutions ............................................ 49
Post Holdings, Inc. ............................................... 18
Rise Baking Co. ..................................................... 1
Roquette ............................................................ 49
Royal DSM .......................................................... 49
Savage Enterprises .............................................. 26
Starbucks Coffee Co. ........................................... 10
Tyson Foods, Inc. ................................................... 8
Weston Foods ..................................................... 16

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Milling & Baking News - August 14, 2018

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