Reports indicate that Grupo Bimbo is the lead contender in acquiring Canada Bread from Maple Leaf Foods as Flowers Foods and several private equity firms appear to no longer be interested in the $1.64 billion bakery. Canada Bread, one of two leading bakery companies in Canada, would add to Bimbo's recent U.S. acquisitions of Sara Lee and Hostess' Beefsteak brand to strengthen the Mexican bakery's position as the largest bread maker in North America.
Flowers Foods has seen the sale of its Tastykakes products rise 20% year over year in the last fiscal quarter, but a return of Twinkies may cut into that growth, analysts say. Twinkies return July 15 into a U.S. cake market that has already shrunk by 5% year on year for Flowers. The company will relaunch the Hostess Wonder bread brand it agreed to buy, but the market for white bread has also shrunk as about 30% fewer Americans ate white bread since 2000.
With food prices escalating, more shoppers -- even well-heeled ones -- are choosing store brands as a means of holding the line on grocery costs. The number of consumers opting for in-house brands reached 60% this year and has been steadily increasing, according to the Food Marketing Institute.