Flowers Foods to acquire Dave's Killer Bread in $275m deal
Under the deal - which is expected to be completed in the third quarter of 2015 – Dave’s Killer Bread (currently 50:50 owned by the founding Dahl family and VC firm Goode Partners) will be run as an independent subsidiary.
Flowers president and CEO Allen Shiver said he saw opportunities to boost distribution of Dave’s Killer Bread products via Flowers’ direct-store-delivery and warehouse network, while the acquisition would in turn expand Flowers' reach into the Pacific Northwest and Canada.
He added: “This is a well-positioned, fast growing company with excellent brand equity and an on-trend organic portfolio that appeals to today's consumers.”
Dave's Killer Bread on course to generate revenues of $160-170m in fiscal 2016
Retail sales of Dave's Killer Bread surged 25% last year, while fiscal 2016 sales are forecast to be between $160 and $170 million, said Shiver, who noted that growth in the organic bread market significantly outpaced growth in the overall bakery category in the past four years.
Founded in 1955 by the Dahl family, the company assumed the name of its best-selling variety, Dave's Killer Bread, in 2005, after the brand proved a hit at the Portland Farmer's Market. Today it employs 300 people and operates one bakery in Milwaukie, Oregon.
DKB products have no artificial ingredients and are certified USDA organic, Non-GMO Project verified and high in protein, fiber and whole grains.
“This is great news! They love what you love – our killer products – and are going to help us bake more bread and reach more shelves than ever before. Everything you love will stay the same: our killer recipes, commitment to organic and no artificial stuff.” Facebook post signed by Dave's Killer Bread CEO John Tucker and founders Glenn, Shobi and David Dahl, August 12, 2015.
Killer taste and texture
Manning a booth at the 2015 Natural Products Expo West show in March featuring slogans such as 'Bread is Back', DKB CEO John Tucker told FoodNavigator-USA that the growth of the Dave's Killer Bread brand had been “phenomenal” over the past two years.
He added: “We’re now available in 41 states compared with 14 states 20 months ago, and we expect to be in all 50 states by the end of this year and across all of Canada. We’re up about 50% on last year. And that’s because we understand our ‘why’, what makes us different and unique.
“First, we’re about killer taste and texture, bread that’s seeded all the way around and all the way through and consumers are absolutely loving it.
"Second, we’re about power packed organic nutrition, with no high fructose corn syrup, bleached flours or synthetic dough conditioners."
We’re about giving people second chances
“But third and most importantly," he said, "We’re about giving people second chances and turning that into positive, lasting change. 30% of our workforce are people that have formerly been incarcerated and we want to change the way that society looks at them. We’re about making a real difference to people’s lives.”
While a spate of popular science books (Grain Brain, Wheat Belly etc) coupled with continued interest in the 'Paleo' diet (a hunter/gatherer-style approach to eating focusing on meat, nuts and berries) has popularized the notion that our bodies are not especially well adapted to eat grains, the scientific consensus is that grains, notably whole grains, can play a key part in a healthy diet, he said.
“We know that whole grains are good for your diet and that bread is part of a well-rounded balanced diet."
Best known for the Nature's Own, Wonder and Tastykake brands, Flowers Foods posted a 23.1% rise in net income to $52m on sales up 1.8% to $889m in the three months ended July 18, 2015. Full year 2015 sales are forecast to be between $3.79bn and $3.86bn.
Watch our Expo West video with John Tucker from Dave's Killer Bread here:
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