M&A

Flowers Foods to acquire Canyon Bakehouse to expand presence in gluten-free market

09-Nov-2018 - Last updated on 09-Nov-2018 at 11:26 GMT

Pic: Canyon Bakehouse

Flowers Foods will acquire Canyon Bakehouse for $250m later this year to further its footprint in the US gluten-free market and capitalize on its growth.

According to IRI data, the gluten-free packaged bread category has grown at 6.6% CAGR per year since 2015, outpacing the broader $14.5bn US retail baked goods market.

Canyon Bakehouse, co-founded by Christi Skow in 2009 after she was diagnosed with celiac disease, offers a line of 21 gluten-free breads, buns, bagels, English muffins and specialty items, with 90% of its sales coming from frozen products distributed through natural, specialty, grocery and mass retailers.

The Colorado-based bakery currently employs 206 people and operates in a recently constructed 165,625-square-foot facility that houses two production lines in Johnstown, Colorado.

Josh Skow, who is the gluten-free bakery’s other co-founder, will lead the business as president after the transaction, while Christi Skow will serve as the brand ambassador.

“Since the beginning, the mission of Canyon Bakehouse has been to help those, who have given up gluten, to love bread again,” said Skow.

“We are tremendously pleased with the brand, the products and the teams that we have developed and grown over the past nine years, and are thankful for the many partners who have helped us along the way. We are now very excited about the opportunities for our company [to work] alongside Flowers Foods.”

Reaching more consumers nationwide

Skow said Flowers will take Canyon’s products to more consumers across the US, thanks to its national retail partnerships.

“Canyon Bakehouse is an innovative leader in a growing segment of the bakery category, which closely aligns this acquisition with our strategic goals,” said Allen Shiver, Flowers’ CEO and president.

“They have great products, a talented team of employees, a state-of-the-art gluten-free bakery, and a brand with an enthusiastic fan following. We see opportunities to leverage Flowers Foods' distribution network and retail partnerships to drive growth.”

Canyon has grown at 45% CAGR since 2014, and anticipates its 2019 sales to be between $70-$80m.