Dive Brief:
- Wonder bread manufacturer Flowers Foods is buying better-for-you snacks maker Simple Mills for $795 million. The purchase of Simple Mills will improve the bread maker’s growth prospects and diversify its portfolio with the addition of crackers, cookies, snack bars and baking mixes.
- Simple Mills, which was founded in 2012, is a producer of premium better-for-you crackers, cookies, snack bars and baking mixes. The company generated 2024 net sales of $240 million, representing 14% growth compared to the prior year. The deal is expected to close in the first quarter of 2025.
- While Flowers is best known for its bread and sweet treats like Tastykake, the Georgia-based company has been moving into trendier segments of the food space in recent years.
Dive Insight:
As companies look to accelerate growth and boost their exposure to food categories surging in popularity with consumers, they often are turning to M&A.
The purchase of Simple Mills not only helps diversify Flowers’ product mix beyond its bread-heavy portfolio, but it gives it a more robust presence in snacking.
Currently, Flowers’ snacking portfolio is led by indulgent brands Tastykake and Mrs. Freshley’s. Simple Mills furthers Flowers’ presence in the space with crackers, brownies, waffle mixes, bars and baking mixes but does so with offerings that have healthier and recognizable ingredients. Its Chocolate Brownie Seed & Nut Flour Sweet Thins, for example, are made with nutrient-dense watermelon seed flour, cashew flour, sunflower seed flour and flax, according to its website.
Flowers said the acquisition of Simple Mills not only gives it ownership of a scaled, better-for-you snacking platform that is resonating with mainstream consumers, but it offers “significant white space for future growth.” Flowers said it has room to expand distribution, accelerate innovation, increase velocities and gain access to new segments and categories.
Simple Mills products are available in more than 30,000 natural and conventional stores.
“With leading market positions and abundant white space for future growth, Simple Mills perfectly fits our strategy of adding compelling brands in better-for-you segments that complement and diversify our existing portfolio,” Ryals McMullian, CEO of Flowers Foods, said in a statement.
Once the deal closes, Simple Mills will operate as an independent subsidiary of Flowers and continue to be led by founder and CEO Katlin Smith and her leadership team. Simple Mills will maintain its operations in Chicago, Illinois and Mill Valley, California.
The decision to keep Simple Mills’ existing C-suite could prove valuable in helping it maintain the innovation and growth that have made the company a success. And while Flowers knows the bread space as well as anyone, Smith and her team have proven they know better-for-you snacks. After growing from a scrappy upstart just over a decade ago to getting purchased by a large food company for more than three-quarters of $1 billion, Flowers no doubt wants to maintain that momentum.
