When Flowers began fiscal 1996 last July, we were a strong wholesale baker with a growing position in frozen baked foods. We ended this year as a strong consumer branded baked foods company with a strong presence in the wholesale baking industry, as the country's number one producer of frozen pies, and as a major investor in the second-largest cookie and cracker company in the United States. One year ago, Flowers Industries' shareholders had an interest in $1.1 billion in revenues; during fiscal 1997, shareholders will have an interest in approximately $3.5 billion in revenues.
Flowers Industries is a very different company today. We meant it when we said in last year's annual report that we were "breaking away." During the year, the company dramatically expanded its versatility in the fresh and frozen baked foods business. Our accomplishments include:
Co-ownership of the Keebler Company - Flowers' investment in the Keebler Company, through INFLO Holdings Corporation, allows us to expand our reach in the baked foods category. With Keebler, and its recent acquisition of Sunshine Biscuit Company, Flowers has grown from a regional player in the baked foods industry to a national player.Flowers has efficient production facilities. We have strong brands. We have the solid financial foundation we need to move forward with acquisitions and market expansions. Most importantly, we have the team to bring it all together. It is the human touch, the willingness to go the extra mile for a customer, for a consumer, for a co-worker, that gives Flowers Industries the edge today ƒ and tomorrow.Ownership of the leading frozen retail pie brand - Flowers' acquisition of the Mrs. Smith's brand is a major expansion of our national frozen baked foods business. We expect increased pie and dessert sales and product line extensions in our frozen baked foods, deli/bakery, and foodservice business as a result of the expanded retail presence provided by the Mrs. Smith's national distribution network.
Strong geographic market growth - We increased our market share in virtually all of our existing major fresh markets this year while at the same time introducing our Nature's Own and Cobblestone Mill brands into new markets. In 1994, Flowers' fresh baked products were available to 52 million consumers; today, these products are available to 81 million consumers.
Superior around-the-clock service - The baking business is a service business. Our customers tell us that Flowers is providing the best service in our industry. Success hinges on quality products produced at the best possible cost for the consumer, on strong brands and marketing programs, and on outstanding service. Our customers know that Flowers will be there on the right day at the right time with the right products. Our customers know we will provide the exact baked food products they need. Our consumers know that Flowers delivers service, quality, taste, and value - seven days a week, 24 hours a day.
We expect fiscal 1997 to be a record year with strong recovery in our base business and one of development in the manufacturing, distribution, brands, and market opportunities that opened up to us in fiscal 1996. Then, just wait until fiscal 1998.
Amos R. McMullian
Chairman of the Board and Chief Executive Officer