Dave’s Killer Bars? Flowers Foods’ Snacking Strategy Takes New Shapes

Flowers Foods is no stranger to reinvention – over the bakery conglomerate’s century-long history it has entered and exited categories ranging from cookies and potato chips to frozen food and at one point, was tied up in a JV with investment firm Invus Group over a deal for Keebler Cookies. Now nearly two decades since spinning the bakery company off into its current form, which brought a shift in focus to the fresh bread set, Flowers sees a future in snacking.

Earlier this year, portfolio brand Dave’s Killer Bread (DKB) expanded beyond its namesake category for the first time with the launch of a 3-SKU lineup of Organic Snack Bars; Flowers acquired Oregon-based DKB from its founder, Dave Dahl, in 2015. The new line comes in Cocoa Brownie Blitz, Oat-Rageous Honey Almond and Trail Mix Crumble flavors and is positioned around its whole grain contents – ranging from 16 grams to 22 grams, depending on the variety – and remains the only nutrition-related callout on the bars’ front-of-pack.

The products were initially tested online direct-to-consumer late last year. That strategy marked another new chapter for Flowers, which launched the new digital e-commerce platform in October. Dave’s Organic Snack Bars, available at retailers nationwide, have reached 6,000 doors since the official roll out in January and are expected to reach 10,000 by the end of year, according to Flowers Foods’ president and CEO, Ryals McMullian, during the company’s earnings call last week.

DKB is also currently testing two additional snack formats – Crunchy Snack Bites and Amped-Up Protein Bar – on its DTC platform as well as select retailers including Sprouts in Arizona (Snack Bites) and select Giant stores (Protein Bars). Details for a formal launch have not yet been released.

And that’s just one brand slotted into the big bakery’s new snack strategy. According to a Q4 earnings call earlier this year, Flowers-owned Nature’s Own is looking to bring snacking to the bread aisle. The brand is currently testing a new breakfast pastry snack format online but hopes to merchandise the product alongside the loaves, buns and other bread-things.

In addition to in-house innovation Flowers invested in paleo and keto bread brand Base Culture last July, which sells two snacks including a Brownie format as well as Sweet Bread bar. Both are available in numerous varieties spanning Cashew Butter Blondie to Nutty Pumpkin Bread.

During Flowers’ Q1 earnings, McMullian said the company expects “M&A to help move us into faster-growing, adjacent categories beyond bread.”

“We continue to monitor the deal market, actively vetting potential acquisitions and investments that could add capabilities, brands, or products to our robust existing lineup,” he said. “Our strong balance sheet positions us well to act when we have financial, commercial, and operational conviction.”

But why is Flowers looking to move beyond bread in the first place? Another key piece of the strategy is a shift in focus to higher-margin branded retail products, McMullian said during the call.

He explained that DKB’s household penetration remains low in comparison to other brands in Flowers’ portfolio, but believes the line extension could leverage that presence. From a “shopper marketing standpoint,” McMullian thinks the bars could “cross-pollinate” consumers between both of the brand’s categories.

The snack segment itself also presents a significant growth opportunity. As consumer eating and shopping habits changed during the pandemic, snacking took a slice from mealtime’s share. According to Mondelēz’s State of Snacking Report, released in January, 55% of consumers report they are likely to replace a standard mealtime eating occasion with a snack. Trade group SNAC International released its State of The Industry snacking report today, created in partnership with Circana (previously IRI) and Sosland Publishing, that states snack foods represent 27% of all U.S. food and beverage sales, totaling $186.4 billion.