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Tastykake owner may build Chester County bakery: report

Veteran bakery-watcher Mitch Pinheiro at Janney says Flowers is ready to boost local bread production.

    by Joseph N. DiStefano
    Published 
Flowers Foods, the Georgia-based breads and snacks maker that bought Philadelphia's Tasty Baking Co. last year, "is a week or three away from an announcement of a new bread bakery with access to the eastern Pennsylvania market," writes Mitchell Pinheiro, food-industry analyst at Janney Capital Markets, in a report to clients this morning.

Flowers considered buying a plant in the region, but after visiting the company's South Philadelphia bakery and talking with officials, Pinheiro says he "get(s) the strong sense that FLO is looking at a green field bakery," a new facility.

The Tasty doughnut and honey buns frying plant in Oxford, originally built by Keebler, now makes packaged snacks for Wal-Mart and other clients. The site has room "to double its footprint," plus "direct access to rail and a good labor market" in nearby low-wage Cecil County, Md., and southern Lancaster County, which makes Oxford "a prime location for expansion," Pinheiro writes.

UPDATE: Asked to confirm, Flowers spokesman Keith Hancock read a statement: "The Pennsylvania market is a priority for Flowers Foods. Feasibility studies are currently underway to determine the best alternative for adding capacity to support our sales plans for the Mid-Atlantic region."

EARLIER: Flowers is also a "likely buyer" of central Pennsylvania Holsum and Butter-Krust bread sales businesses that Grupo Bimbo, maker of Stroehman's, Entenmann's and dozens of other brands from its US headquarters near Horsham, has agreed to divest to meet government antitrust concerns, Pinheiro adds.
Flowers has also boosted production at the South Philly plant, opened in 2010 with state financing. As an independent company Tasty was unable to turn a profit on the facility. But Tastykake sales are up under Flowers management, thanks partly to additional sales from Flowers' bread truck routes. So the plant, which was operating at less than half capacity when Flowers bought it, is now reporting "steady growth" and better margins, Pinheiro says.
Flowers is also poised to exploit rival Wonder Bread and Twinkie baker Hostess's bankruptcy, Pinheiro adds. Hostess has a plant in Northeast Philadelphia.
    JN
    Joseph N. DiStefano