Flowers Foods wraps up $795m acquisition of Simple Mills to expand better-for-you snack portfolio

Flowers Foods, Inc. (NYSE: FLO) has successfully completed its $795 million acquisition of Simple Mills, a move that significantly strengthens its position in the rapidly growing better-for-you snack segment. The deal, first announced in January 2025, underscores Flowers Foods’ strategic efforts to diversify its product portfolio beyond traditional baked goods and cater to the increasing consumer demand for health-conscious, minimally processed snack options.

Flowers Foods Chairman and CEO Ryals McMullian emphasized that Simple Mills brings an innovative approach to clean-label snacking, aligning perfectly with the company’s long-term growth objectives. He noted that the acquisition would enable Flowers Foods to expand its distribution network, accelerate new product development, and enhance brand awareness while supporting Simple Mills’ commitment to high-quality, nutrient-dense ingredients.

How Does Simple Mills Fit Into Flowers Foods’ Growth Strategy?

Simple Mills, founded in 2012 by Katlin Smith, has become a leading name in the better-for-you snacks market, offering premium crackers, cookies, snack bars, and baking mixes made from high-quality, nutrient-dense ingredients such as nut, seed, and vegetable flours. The brand has successfully built a loyal consumer base and is distributed in over 30,000 retail locations across the United States.

Flowers Foods’ decision to acquire Simple Mills aligns with its ongoing strategy to expand in the health-conscious consumer space. The acquisition follows Flowers Foods’ previous investments in better-for-you brands, including Dave’s Killer Bread and Canyon Bakehouse. Simple Mills’ focus on clean-label ingredients and sustainability-driven production methods further complements Flowers Foods’ mission to provide consumers with high-quality, minimally processed food products.

McMullian highlighted that the synergy between the two companies would enable Simple Mills to maintain its core brand values while benefiting from Flowers Foods’ extensive resources and operational expertise. He reiterated that Flowers Foods is committed to preserving the authenticity of the Simple Mills brand while accelerating its reach and innovation pipeline.

Why Is Flowers Foods Expanding in the Better-For-You Market?

The acquisition of Simple Mills comes at a time when the better-for-you snacks market is experiencing rapid growth. Consumers are increasingly shifting towards clean-label, minimally processed products that align with their health and wellness goals. According to industry analysts, the health-conscious snack sector has outpaced the growth of conventional snack categories in recent years, with a growing demand for plant-based, organic, and non-GMO options.

In 2024, Simple Mills recorded a 14% increase in net sales, reaching an estimated $240 million. This impressive growth trajectory highlights the brand’s strong market positioning and its ability to attract consumers seeking nutritious snack alternatives. Flowers Foods plans to leverage this momentum to further expand Simple Mills’ market presence and introduce new product innovations that cater to evolving consumer preferences.

By integrating Simple Mills into its portfolio, Flowers Foods enhances its ability to compete with major players in the better-for-you category, including Mondelez International and Kellogg’s. The acquisition also positions Flowers Foods to capitalize on the long-term trend toward sustainability-driven food production, an increasingly important factor in consumer purchasing decisions.

What Is the Financial Impact of the Simple Mills Acquisition?

Flowers Foods is financing the $795 million transaction through a term loan secured from Royal Bank of Canada. Post-acquisition, the company’s total net debt is expected to reach approximately $1.9 billion, with a net debt-to-EBITDA ratio estimated between 3.1x and 3.3x. Despite the increased leverage, Flowers Foods remains committed to maintaining its investment-grade credit rating and executing a balanced capital deployment strategy.

The company expects the acquisition to be immediately accretive to its financial performance, with projected increases in net sales, adjusted EBITDA, and EBITDA margins. Additionally, analysts predict that the deal will positively impact Flowers Foods’ earnings per share by 2026, reinforcing the company’s long-term financial outlook.

McMullian stated that the acquisition strengthens Flowers Foods’ branded retail sales segment, which is expected to constitute 66% of the company’s total net sales in 2024 on a proforma basis. He emphasized that the company remains focused on achieving sustainable, profitable growth while continuing to meet evolving consumer preferences for healthier snack alternatives.

How Will Simple Mills Benefit from the Acquisition?

Simple Mills will continue to operate with its existing management team under Flowers Foods’ ownership, ensuring that the brand maintains its identity, core values, and commitment to clean-label innovation. Founder Katlin Smith expressed confidence in the partnership, noting that Flowers Foods’ extensive distribution network and operational expertise would enable Simple Mills to reach a broader audience and drive further innovation.

Smith reiterated that Simple Mills remains committed to its mission of providing consumers with nutrient-dense, minimally processed snack options. She highlighted that Flowers Foods’ support would allow the company to amplify its brand awareness, expand into new retail channels, and accelerate product development efforts.

Industry experts believe that Flowers Foods’ established track record of scaling acquired brands will be instrumental in helping Simple Mills expand its presence in the competitive better-for-you snacks market. The acquisition presents new opportunities for category expansion, with potential product innovations aimed at addressing the growing demand for functional, plant-based, and gluten-free snacks.

What Does the Acquisition Mean for the Future of the Snack Industry?

Flowers Foods’ acquisition of Simple Mills reflects a broader industry trend in which legacy food companies are investing in health-focused, disruptive brands to remain competitive. As consumer preferences continue to shift towards transparency, sustainability, and wellness-driven food choices, companies that fail to adapt risk losing market relevance.

By integrating Simple Mills into its brand portfolio, Flowers Foods enhances its ability to compete in the premium snack sector while reinforcing its long-term commitment to clean-label, minimally processed products. The deal positions Flowers Foods as a key player in the better-for-you category, allowing it to capture greater market share and drive sustained growth in an increasingly health-conscious consumer landscape.

Analysts predict that the demand for better-for-you snacks will continue to rise in the coming years, driven by a growing emphasis on wellness and sustainable food production. Flowers Foods’ investment in Simple Mills not only strengthens its product portfolio but also underscores its strategic vision to lead the evolution of the snack industry towards more nutritious, transparent, and responsibly sourced options.