‘Importantly, we’ve seen less elasticity in the most-premium products in our portfolio’

Speaking on the firm’s Q1 earnings call Friday, CEO Ryals McMullian said: “Most encouragement is the fact that with a significant amount of price increases in January, we actually grew our units as well with our top brands, Nature’s Own, Dave’s Killer Bread, and Canyon Bakehouse.

“Despite higher prices and supply chain headwinds, volumes for those brands increased… up 1.7%, 5.3%, and 13.1% respectively. The current environment underscores the importance of our leading brands. We believe consumers continue to see value in the differentiated attributes of our products, and recent results seem to confirm exactly that.

“IImportantly, we’ve seen less elasticity in the most-premium products in our portfolio​.”

Total sales increased 10.3% to $1.436bn in Q1, with higher prices partially offset by a 3.2% volume decrease mostly driven by declines in the firm’s cake, fast food, and private label business, in part due to supply chain disruptions. Net income rose 19.4% to $85.6m.

‘Private label’s been declining in our category for a long time, and it’s still declining’

While private label had increased its market share​​ in some grocery categories in recent weeks, “We’re not seeing that in our category right now,” ​added McMullian. “Private label’s been declining in our category for a long time, and it’s still declining’

A second price increase is planned for early June, he said: “There’s a bit of a wait and see there to see how the consumer reacts to that second round of pricing.”

When it comes to retail customers, however, “as far as the pricing acceptance goes, we have not had any issues,” he added. “I don’t know what the retailers will do in the future. What I can tell you is that for our June 6 price increase, there’s been no issue there for us.”

.

Leave a Comment