Swot Analysis Of Bread

Q4 - OE_Strengths

What do you see as Flowers’ particular strengths?

"They have good brands, brands with some sticking power which is healthy. They have a decent distribution system for most of their business. Those are the key things."

Q5 - OE_Weaknesses

What do you see as Flowers’ particular weaknesses?

"Legacy, union pension costs, their distribution system is probably not as well positioned for the sweet baked goods side of the business whereas it works very well for the bread. They’re not alone in that but it’s something that they struggle with given their legacy distribution system. Their operations are okay in terms of manufacturing and their cost structure, it’s not terrible but it’s not stellar. Their bread brands are strong. Some

"Expanding and taking some of their brands more national whether it’s Tastykake or Cobblestone or things like that and relaunching Wonder Bread, moving up into the Midwest. Essentially growing the market share by either nationalizing some of their brands or moving into some new territories. They are trying to make their manufacturing and distribution system more efficient and it takes a lot of time. Those are the two key things they seem to be focused on."

Q8 - OE_AspectsOfStrategyThatRepresentBiggestOpportunities

What aspects of the strategy do you believe represent the biggest opportunities for Flowers?

"The distribution system is probably the biggest opportunity to take costs out and that goes hand-in-hand with the manufacturing, the baking footprint. You need to have your plans rationalized and support your rationalized distribution system. There’s a lot of costs there that can be ripped out over time"

Q9 - OE_AspectsOfStrategyThatRepresentBiggestChallenges

What aspects of the strategy do you believe represent the biggest challenges for

Hostess and Bimbo and [Indiscernible 7:20] are not going to go easy on that and that’s a difficult thing because they don’t have the best distribution system to support that and they don’t have the brands that have national recognition. That is going to be hard to build with over reinvigorated Hostess but that’s where potentially the highest profits are because if you run it well, you’ve got longer shelf life products so you don’t have as much spoilage and you can shift further, you can earn higher margins there. But it’s going to be difficult for them."

Q12 - OE_ClosestInvestmentPeers

Not limiting your thoughts to just industry peers, which companies would you consider to be Flowers’ closest investment peers?

"General Mills, Inc., The Hershey Company in terms of the challenges and opportunities and the valuation and so on."

Q15

Why do you prefer this over other capital deployment options?

"Bolt on acquisition in a core competency/adjacency. Those are the easiest to integrate and help the long-term value of the company. Big ones are much more risky in terms of integrating the culture and being able to spare management to run it. Dividends, those are nice but we’re not driven by dividend policy so it’s not as big a