Last week Flowers Foods emerged as the first ‘stalking-horse’ bidder for assets from bankrupt baker Hostess Brands. The US bakery firm placed a $360m bid for Wonderbread, Nature’s Pride, Merita, Home Pride and Butternut bread brands; 20 bakeries; and around 38 depots.
A stalking-horse?
Is an initial bid on a bankrupt company’s assets from an interested buyer chosen by the bankrupt company from a pool of bidders that sets the bar so other bidders can’t low-ball the purchase price
Matthew Hudak, research analyst at Euromonitor International, said that should Flowers Foods’ bid go through, Wonder Bread will require the most investment.
“Flowers Foods will need to invest more in turning Wonder Bread around. It really will require more effort – it’s not going to happen overnight,” Hudak told BakeryandSnacks.com.
Wonder Bread sits as a simple packaged bread among fiber enriched, flaxseed artisanal types that really ring well with current consumer sentiment towards health, he explained.
“Strategy moving forward will have to hinge around brand equity, which is the best thing going for it by a long shot,” he said.
The brand should be made culturally significant, positioned as the independent bread of choice, he said, or it could target consumers who used to eat it as a kid.
Talking price points and private label
Hudak said that Wonder Bread, as it is, is not cheap enough to ‘beat off’ private label and not premium enough to battle in the upper bread segment.
He said that the brand could attempt to target private label consumers though – if it was positioned as an affordable, low-end, healthy bread.
“The idea of appealing to private label consumers could be an interesting direction to take it,” he said.
Overseas could work…
The research analyst also flagged international markets as a potential target for the bread brand.
“Wonder Bread has the brand equity of a safe bread to eat – and this safety combined with the convenience of being packaged could appeal to international developing markets,” Hudak said.
“Flowers Foods is a pretty sharp company. They’re in the bread market and know that market. I would think they would have some idea on how to take on the brand,” he said.