"We're going after a specific customer looking for a specific health need," Gene Lord, Flowers Foods Bakeries Group's president and COO

"When we come out with a new product it needs to have a significant and different benefit than what we already have." Janice Anderson, Flowers Bakeries' vice president of marketing

" You have to know what the trends are going to be so you can set a date for when the products need to be launched." Mike Beaty, FlowersFoods' senior vice president, supply chain

From left to right: Russ Thompson, Flowers Foods' technical services manager; Janice Anderson, Flowers Bakeries' vice president of marketing; Charlie Moon, Flowers Foods' director of technical services; Mike Beaty, Flowers Foods' senior vice president, supply chain; and Gene Lord Flowers Foods Bakeries Group's president and chief operating officer.

Flowers Foods' Nature's Own bread brand has occupied shelf space in Southeastern supermarkets since the late 1970s. This fact alone makes it a unique choice for Baking Management's 2004 R&D New Product of the Year award. However, the company has refused to let this brand stagnate on the bread aisle. Instead, it constantly pushes the envelope of innovation by launching new bread products designed to capitalize on emerging consumer trends.

The company's latest effort, Healthline, represents a sub-brand of products formulated to attract consumers with specific dietary and health concerns. Launched in October 2003, the Healthline sub-brand owes its success to a group of executives that possess the ability to see through the diet hoopla and focus on product innovations with long-lasting shelf lives.

This group of executives in Thomasville, Ga., is chock full of bread bakers with a wide range of knowledge and experience. Among Flowers Foods' R&D staff, which is split between labs in Thomasville and Tucker, Ga., are employees with degrees in food science, chemistry, and animal science as well as graduates of the American Institute of Baking's Baking Science courses. As for experience, these executives are former shipping managers, production line workers, purchasing directors and route salesmen. These skills, combined with a wealth of research and development knowledge gained through first-hand experience, have consistently put Flowers Foods ahead of the pack when it comes to new product launches in the bread aisle.

In the past 18 months, this crossfunctional team of executives has continually beat its competition to the bread aisle with unique and innovative new products that address the most significant trend to surface in the bread category in the last five years: betterforyou breads.

The company packages these new products under the Nature's Own brand with a Healthline banner. This sub-brand addresses specific dietary and health concerns through a roster of products that use innovative ingredients, clever packaging and easy-tounderstand names. As a result, Baking Management names Flowers Foods' Healthline sub-brand as its 2004 R&D New Product of the Year.

What is Healthline?
When Flowers Foods purchased Ideal Baking Co., Batesville, Ark., in October 2002, it inherited the Healthline label, which Ideal Baking used sporadically on its bread and roll products. "We (Flowers Foods) felt that Healthline had a lot more legs than it was currently being given credit for," Janice Anderson, Flowers Bakeries' vice president of marketing, says. "And we felt that we had the opportunity to develop it into something greater than it was."

A year after the Ideal Baking acquisition, Flowers Foods repositioned the Healthline name as a sub-brand under the company's Nature's Own brand of soft variety breads. Under the Healthline banner, the company launched several new products and corralled existing products into a family of bread items that deliver specific dietary and health benefits.

"It is a wonderful sub-brand of Nature's Own because it immediately tells you there is something different about this loaf of bread," Anderson says. "Healthline says this loaf of bread is delivering something under a healthy umbrella."

To date, this health umbrella includes products that are lower in calories, sugar free, high in fiber, high in soy and low in carbohydrates. "We're going after a specific customer looking for a specific health need," Gene Lord, Flowers Foods Bakeries Group's president and chief operating officer, says.

To qualify as a Healthline product, new bread formulations must provide a specific dietary or health benefit. This rule allows the company to not only innovate unique bread products, but also prevents it from cannibalizing its existing products on the bread aisle.

By stretching the bread rack, Flowers Foods provides a slew of bread options aimed at specific members of a family. For example, although children typically consume the company's traditional white bread, a mother may be more likely to buy a loaf of Wheat 'n Soy bread, and a father may purchase a loaf of Double Fiber bread. This coverage of the bread aisle allows the company to make three sales instead of one.

Why Healthline?
Flowers Foods has specialized in targeting consumers with specific dietary needs since the launch of its Nature's Own brand in late the 1970s. With this launch, the company attracted consumers interested in purchasing breads that were free of artificial colors, flavors and preservatives. Today, the Nature's Own brand is one of the most purchased soft variety breads in the country despite being available to less than 40% of the population. The company's dedication to better-for-you breads continued to progress since the inception of Nature's Own, and most recently manifested itself with the Healthline sub-brand.

Flowers Foods flurry of betterforyou product launches began at the onset of carbohydrate mania. Although the Atkins Diet has been around for 30 years, not many in the baking industry predicted its impact on the bread aisle in 2003. Flowers Foods, however, did.

In 1999, the Sugar Busters diet, which urged its followers to avoid all breads except whole grain breads, struck a chord with Charlie Moon, Flowers Foods' director of technical services. This tiny blip in the impending onslaught of diet mania caused the company to start looking at breads with specific health benefits. First, the company developed a sugarfree-Nature's Own variety. Then, in 2002, the company turned its attention to reduced carbohydrate products.

Unfortunately for Moon and Russ Thompson, Flowers Foods' technical services manager, reduced-carbohydrate bread formulations were not readily available. As a result, the company worked with ingredient suppliers on a reduced-carbohydrate formulation for more than a year, trying to understand the intricacies of the concept and ingredients used in a reduced-carbohydrate formulation. It tested formulas in the lab and then used some of its bakeries to run various formulas in a reallife production environment.

As the reduced-carbohydrate bread formulation progressed, so did the buzz about various carbohydrate diets. "We built a certain expertise in low-carbohydrate formulations because we had been working on the product for a year and massaged the formulation many times," Mike Beaty, Flowers Foods' senior vice president, supply chain, says. "You have to know what the trends are going to be so you can set a date for when the products need to be launched."

As carbohydrate mania continued to generate buzz, the company realized that it not only needed to launch a reduced-carbohydrate bread, but it also needed to be the first one to the market with it.

"The last 90 days of the reduced carb formulation were very intense because on numerous occasions we said that the first company to the marketplace was going to do well with it," Lord says. "And we were the first to the marketplace."

In March 2003, the company launched Nature's Own Reduced Carbohydrate Premium Wheat, marking the first commercial bakery to bring a low-carbohydrate product to the bread aisle. Although Food and Drug Administration regulations forced the company to change the product's name shortly after its launch, the company says that this change was a blessing in disguise. "Personally, I think the name changed helped us because it took us out of that low-carb section and expanded the perception of the product," Beaty says. "When it happened it was a tough pill to swallow, but in retrospect it worked out."

The company renamed the bread Wheat 'n Fiber, which expanded the perception of the product beyond lowcarbohydrate and into the betterforyou realm. As a result, sales of Wheat 'n Fiber remain solid while other bread manufacturers are reporting declines in low-carbohydrate products.

Evolution of Healthline
The successful launch of Nature's Own Wheat 'n Fiber paved the way for implementing the Healthline name on specific Nature's Own products. The first products to fall under this banner were the company's Nature's Own Light and Sugar Free breads. Nature's Own Light breads were introduced in the late 1980s and contain one-third less of the calories of traditional Nature's Own products. Although the products, which come in wheat, honey wheat and white varieties, have charted an up and down course in terms of sales, Anderson says that the product recently exhibited renewed interest from consumers and sales are up. Similar to its light breads, Nature's Own Sugar-Free breads also represent an existing product that was placed under the Healthline banner. Recently, the company expanded its sugar-free offerings with hot dog and hamburger buns.

After its initial startup with three varieties of bread under the Healthline banner, Flowers Foods' research and development staff opened the floodgates of formulation and introduced multiple new products aimed specifically at consumers seeking bread with specific health benefits.

In March 2004, the company launched the first soy bread delivered from a direct-store-delivery route, the company said. Nature's Own Wheat 'n Soy bread contains 4.3 grams of soy protein per slice and qualifies for the nutrient content claims as " e x c e l l e n t " sources of protein and calcium.

On the heels of the Wheat 'n Soy launch, the company introduced Nature's Own Double Fiber bread. The fiber rich product contains 5 grams of fiber per slice compared to the 2 grams of fiber in its 100% Whole Wheat bread, and the less than 1 gram of fiber in a traditional slice of white bread.

The company has boosted the fiber content of its products without increasing its slice size, which is 28 grams. All of the products under the Healthline sub-brand are baked in smaller pans than traditional Nature's Own loaves because the breads are aimed at a specific consumer and will not likely be consumed by an entire family.

Making Healthline work?
The success of the Healthline subbrand falls on the shoulders of Flowers Foods' executive team, which operates in a streamlined manner not normally seen at a billion dollar company. The company's bread and roll research and development lab in Thomasville is staffed by a technical services director and two managers and resides adjacent to the company's Thomasville plant. These three employees, as well as members of the marketing, sales and purchasing departments, operate in a manner that suggests the company's office consists of only one conference room where a constant exchange of ideas is occurring. Although not exactly the situation, Flowers Bakeries executive team does operate in an almost family type of environment.

This work situation derives from a cross-functionality of every executive involved in the product formulation process. "Our people understand every aspect of the development process from formulation to manufacturing," Beaty says.

For example, Charlie Moon has spent the last 14 years in the research and development lab in Thomasville. However, prior to that he held positions in manufacturing and shipping. Other executives on Flowers Foods' product development committee share the same cross-functional experiences.

"Everyone (Flowers Bakeries executives) has been here for 30-plus years and we know how to work together," Anderson says. "It's not our first dance."

This open-door/no-nonsense approach to product development has consistently enabled the company to beat its competitors to market with innovative bread launches. "Some people talk things to death, and that's one of the things we don't do around here," Lord says. "We don't have to wait a long time for all of the powers that be to sign off on everything. A lot of times things will pass you by while you wait for people to sign off on something."

Another key to the company's research and development success lies in its logical approach to product development. "I think we have a huge responsibility to create another loaf of bread that has a sound enough product attribute to truly increase sales," Anderson says. "We don't need to just keep dividing the pie. When we come out with a new product it needs to have a significant and different benefit than what we already have."

This seemingly logical business approach is commonly lost in many billion dollar companies' research and development lab, where big ideas often trump sound ideas.

By parlaying its vast knowledge of the baking industry, its cross-functional experience, and its ability to formulate new products without being bogged down in big-company bureaucracy, Flowers Foods has consistently stayed ahead of the new product development curve. With its Healthline sub-brand, the company has further proved the importance of innovation and thinking 10 steps ahead of the competition.