Walmart-at-the-Crossroads-FINAL-06.04.15

6. Bread and Baked Goods Industry
The bread industry encompasses the production and sale of fresh and frozen bread, cakes,
muffins, croissants, and other baked goods. This food sector has annual revenue of $39 billion with an
estimated annual growth of 0.2 percent.
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According to the American Bakers Association (ABA), the
lobbying group for the baking industry, this sector annually contributes 706,870 jobs and $38.5
billion in taxes and has a “direct economic impact” of $102 billion annually on the U.S.
economy.
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Demand for and consumption of white loaf bread and other processed baked goods has
declined in the past five years, while the price of key ingredients like wheat and sugar has risen. Despite
the decrease in demand for white bread, analysts project that the bread industry will continue to
increase revenue as the price of wheat and sugar stabilizes and companies adapt to meet rising demand
for healthier, gluten-free, and other specialty breads.
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Besides a shift in demand, there has also been a transformation in the way the industry is
structured. The number of key players in the bread industry has shrunk from eight to three in the past
decade, which means this sector can now be considered a consolidated market.
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The
largest bread company in the United States is Grupo Bimbo, followed by Flowers Foods.
In 2013, Bimbo Bakeries (the U.S. division of Grupo Bimbo) had 30.7 percent market share, and
Flowers Flower Foods represented 18.1 percent share of the industry, together controlling 48.8 percent
of the overall bread market.
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Between 2009 and 2013 alone, Bimbo Bakeries and Flowers Foods
purchased three companies that formerly comprised 65 percent of industry sales: Weston, Hostess, and
Sara Lee.
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According to FCWA field research, these two largest companies in the industry
are Walmart’s primary bread suppliers. In fact, Flowers Foods relies on Walmart for more than
one-fifth of its business, with 2011 annual sales of nearly $600 million to Walmart.
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Walmart’s suppliers of bread products, and the bread and baking industry as a
whole, have often argued against fair labor practices. Bimbo Bakeries and Flowers Foods, the
two companies that supply bread products to Walmart, have leadership roles within the ABA, a group
that has had policy priorities ranging from biotechnology to anti-labor issues. Bimbo Bakeries president
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