THOMASVILLE, GA. — Revitalizing the clean label Nature’s Own bread brand will be a linchpin for Flowers Foods Inc. as it proceeds with a recently launched review of its portfolio and operations, said A. Ryals McMullian, chairman and chief executive officer.

Flowers announced the review when reporting fiscal 2025 results, in which the Thomasville-based baked foods manufacturer saw earnings decline and sales rise, with latter aided by a fourth-quarter boost. In a Feb. 13 conference call, McMullian told analysts the company is “in the early innings” of the review.

“At a high level, we’re conducting a complete review of our brand portfolio, the manner and magnitude with which we’re supporting that brand portfolio,” he said. “We’re evaluating other areas that are in additional need of investment. By and large, the portfolio is performing very well across cake and our innovative platform and premium. The real issue for us is traditional loaf, where we under-index, and that has been underperforming the category. And that has downstream effects in terms of operating deleverage, etc. So one of the key focus areas is, how do we reinvigorate Nature’s Own? Reigniting growth on that brand, generating demand for that brand, is going to be a key focus area for us.”

Nature’s Own stands as Flowers’ largest brand as well as the No. 1 brand in the traditional loaf bread segment, McMullian noted.

“Traditional loaf will continue to be an important part of the category, but it’s the trends that we see continue — whether that’s a shift to premium, whether it’s a shift to value, inclusive of small loaves,” he said. “I do think a portion of the current value play is driven by macroeconomic factors that we see all the time in the bread category. The difference now, whereas traditionally you would have seen a shift to private label, you’re seeing a shift to lower-priced branded offerings that are pricing at parity or slightly above private label. And in the same environment, private label is down.”

In the fourth quarter, fresh packaged bread sales for Flowers were down by 3.4% in dollars and by 3.7% in units. Dollar share fell to 15.6%, down 110 basis points year over year. In specialty premium loaf, Nature’s Own contributed 10 basis points of unit share, helped by increased distribution. The brand also helped drive unit growth in sandwich buns and rolls, particularly via the rollout of its new keto buns and Perfectly Crafted brioche buns, McMullian said.

Though “the pure value play is cyclical” in traditional loaf bread, products like small loaves — also offered under the Nature’s Own brand — reflect more lasting trends like demographic shifts, he said.

“Over time, I do think you’re going to see the (bread) shelf evolve and change overall,” McMullian said. “So it’s very important for us to be prepared to shift with that. And we believe there are things that we can do with Nature’s Own — given its high loyalty rate, given its awareness, given that is the No. 1 brand — to bring additional attributes to consumers that they will value. I do think that there is a path there. And we’re excited about the changes that we have upcoming for that segment of the portfolio. If we’re successful in doing that, it goes a long way to getting us back at least to a stable state in traditional loaf, which will be very meaningful for the business.”

McMullian added it’s also important that “our supply chain review is involved in this, too.”

“It’s important to do both, to address the demand for traditional loaf primarily but also address our fixed-cost base and ensure that we are operating as efficiently as possible,” he said.