Milling & Baking News - September 10, 2019 - 10

Business

Foodstirs seeks to extend
disruption into fresh bakery
it's slacked out in the fresh bakery section where it has a 21-day shelf life.
From a product proposition standpoint, that allowed us to create recipes
that didn't require shelf-life-extension
preservatives. We are able to use most
of the same ingredients that we use in
the baking mixes."
Founded in 2015, Foodstirs offers
a range of baking kits and mixes for

FOODSTIRS

SANTA MONICA, CALIF. - Specialty baking mix brand Foodstirs is
expanding into fresh bakery with the
launch of its first ready-to-eat offerings. The new product line features organic, grab-and-go miniature donuts,
muffins and brownie bites that contain
50% less sugar than conventional options on the market.
"We call it 'sugar optimized,'" said
Greg Fleishman, co-founder and
president of Santa Monica-based
Foodstirs. "When we were developing our sweetener system, we
wanted to make sure we were
delivering a sweet flavor and a
mouthfeel that was replicating
pure cane sugar."
A combination of organic cane
sugar, tapioca syrup, agave inulin and stevia leaf extract is used
to sweeten the products. Each
donut, muffin or bite contains two or
three grams of sugar.
Available online and in select retailers, items include powdered donuts,
double chocolate donuts, blueberry
muffins, chocolate chip muffins, chocolate brownie bites and snickerdoodle
blondie bites.
"One thing we decided early on was
this is going to be a fresh product," Mr.
Fleishman said. "It ships frozen, and

cakes, cookies, protein bars, brownies, pancakes and more. The company
uses sustainably and ethically sourced
ingredients such as fair-trade chocolate, biodynamic cane sugar, single-origin and identity-preserved flour and
colors from natural sources. The products are sold in more than 10,000 retail
outlets. The business has doubled year
over year, Mr. Fleishman said.
The baking and dessert mixes market

Fitch assigns 'BBB' rating to
$500 million in Bimbo notes
NEW YORK - Fitch Ratings has
assigned a "BBB" rating to Mexico
City-based Grupo Bimbo S.A.B. de
C.V.'s proposed $500 million senior unsecured notes issuance due
in 2049. Proceeds from the issuance
are expected to be used by Bimbo to
buy back a portion of its $800 million
unsecured notes that mature in 2020,
Fitch noted.
In issuing its rating, Fitch pointed to
several key drivers, including Bimbo's
strong business position as a leader
in the baked foods industry, good
geographic diversification, projected
moderate revenue growth, stable profitability and leverage strengthening.
"Bimbo has good geographic diversification with around 66% of its total
revenues and 44% of its total EBITDA
generated from operations outside
Mexico," Fitch said. "Its acquisitions
in the U.S., Canada and Europe have
10 / September 10, 2019

Milling & Baking News

in the United States is valued at nearly
$4 billion and has experienced declines in recent years, according to
market research firm Mintel. Smaller
households and interest in more convenient options from standalone and
in-store bakeries have contributed to
category weakness.
"The whole point of our company
is to fill these gaps in the marketplace
and to fulfill the needs of our consumers," said Galit Laibow, co-founder
and chief executive officer of Foodstirs. (A third co-founder is television
and movie star Sarah Michelle
Gellar). "People wanted portability, the same quality, taste and acceptability we provide in a baking mix, but they wanted something more convenient."
Emerging brands are disrupting product categories across the
grocery store, he added.
"It's similar to Halo Top, when
you think about it," he said. "All
these people wanted to indulge
in a lovely frozen creamy dessert but
didn't want to be taking down 800
calories in one sitting. That mindset
gets carried through other parts of
the store. You've seen it happen in the
candy aisle, and now we're doing it in
fresh bakery.
"We're in 2019, and everybody is
expecting these upgrades will happen
with the foods they've been craving
from when they were children." MBN

provided access to hard currency revenue and EBITDA generation. This
has helped the company to counterbalance the exposure between mature
and emerging economies. In 2018,
Bimbo concluded the acquisition of
Mankattan Group in China and acquired some relatively small bread
producers in Chile, Colombia and
Peru that complement its operations
in the region."
Fitch said it expects Bimbo's consolidated revenues to grow approximately 3% and 4% in 2019 and 2020,
respectively, boosted by organic
growth of key brands, pricing initiatives in U.S. operations and the effect of acquisitions in Asia and Latin
America. Headwinds identified include weak private label volumes in
the United States, a slowdown in economic growth in Mexico, a tough macroeconomic environment in Argentina

and challenging operations in Brazil.
EBITDA margin at Bimbo is expected to stay relatively stable at around
11% in 2019 and 2020, Fitch said. The
ratings agency said the company
should be able to offset pressures from
main raw materials, energy, freight
costs in the United States and continued restructuring charges through
projected revenue growth, internal efficiencies and lower expenses.
Fitch did note that it expects Bimbo
to maintain neutral to slightly negative free cash flow (F.C.F.) in 2019.
"Fitch estimates the company will
generate in 2019 around 15.8 billion
pesos of cash flow from operations
(C.F.F.O.) to cover capex of 13.8 billion
pesos and dividends of 2.1 billion pesos," Fitch said. "Despite a projected
growth of close to 7% in EBITDA in
2019, Bimbo's C.F.F.O. is expected to
be pressured by higher requirements
of net working capital. Positive F.C.F.
should resume in 2020." (On Sept. 5
Bimbo announced it had priced $600
million of the 4% notes.) MBN
bakingbusiness.com / world-grain.com

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Milling & Baking News - September 10, 2019

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