Longevity and Growth in the Bread Industry with Chad Johnson, Flowers Foods
In this episode of Industry Insights with Route Consultant, Chad Johnson, VP of Franchise Services at Flowers Foods, shares his expertise on the longevity and growth of the bread industry. Discover Flowers Foods' strategic plans for expansion, the challenges of logistics in the bread market, and the opportunities for independent distributors to thrive. Learn about the importance of maintaining strong relationships with customers, the benefits of multi-route ownership, and how Flowers Foods supports its partners in achieving success. Join us for an insightful conversation on the future of the bread industry.
About Chad Johnson
Chad began his career as a bread route driver in Atlanta before climbing the ranks at Flowers Foods through roles in HR and communications. Today, he leads franchise operations and enablement, ensuring independent distributors are supported with data, training, and tools to succeed. Under his leadership, the franchise sales process has evolved to include candidate vetting, financial requirements, and business plan submissions to ensure mutual long-term success. Chad’s deep-rooted belief in entrepreneurship drives his work supporting Route Consultant and other partners in identifying strong operator-investors.
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Josh Gregory: [00:00:00] Welcome to Industry Insights with Route Consultant, your front row seat to the fast moving world of logistics and beyond. Each week we bring you game changing insights, real world strategies and fresh perspectives to fuel smarter investments and build stronger businesses. Join us as we sit down with expert guests to explore emerging trends and pressing topics across a wide range of industries.
This is Industry insights. Chad Johnson, vice President of Franchise Services with Flowers Foods. Welcome back again. Uh, I know we've talked about a couple of things on past episodes, both how you kind of historically have seen flowers change, where you see it today. I wanna talk a little bit more today about where we see it going.
Uh, so flowers, uh, I know. There's all kinds of things happening in the industry, but what is kind of on the roadmap? I think when you talked about your history, you, you talked about on the centennial plan where you had been here for a hundred years and you wanted [00:01:00] to make sure that you build a company that can last for the next a hundred.
So what are some of those things that you guys are, are planning through and working through to continue to. To evolve what flowers is in the market
Chad Johnson: again, and it's, it's all about staying relevant. Yeah. With the consumer, Josh, but it's also going to where the consumers are. So there's still white space out there that flowers.
Doesn't distribute in. You think about some big markets, uh, that we have, uh, around the US that flowers doesn't have a presence in yet. And, uh, so flowers looks to grow and, and keep growing into those markets. And, you know, it's, it's about getting your foot in the door and. Having great relationships, uh, with the customers, uh, and the retailers that are in those areas or in other areas, or the areas that we service now that we've, that we've proved ourselves, that independent distributors have proved themselves, that helps us get our foot in the door when we want to move [00:02:00] into a new white space market.
Josh Gregory: Yeah. So there, you know, I think of flowers as a very national brand. Um, is there's just states that you guys have never been in that are, that are still. Pure white space for you all?
Chad Johnson: Yeah, absolutely. Okay. Especially in, in, in the north. I mean, flowers, uh, began, its its journey in Thomasville, Georgia. Mm-hmm.
So the Southeastern United States is its core market and it's branched out from their main strategic acquisitions in some areas, uh, to gain relevance, uh, you know, moving all the way out to California and then up into Maine and Arizona, so and so some, sometimes it's just. You, you're breaking a market with your products.
Mm-hmm. Yeah. And, and, uh, moving into that area and just moving in slowly and surely, but then sometimes it's done through acquisition.
Josh Gregory: Yeah, I, I, that makes sense. You know, I'm, I'm from Tennessee, so I just think of flowers as always having been here, a lot of those brands, but that makes sense that there are.
It's not a [00:03:00] purely like we cover every single state we started here. From a, from a bakery standpoint, you have to build each step of the logistics journey to actually get the bread from place to place. And it's not like bread's not like, you know, uh, a a a type of product that lasts for months. So you have to build quick logistics to get things quickly from place to place to be able to stock stores quickly.
So I'd imagine there's some exciting logistic complexity in terms of building out as you continue to expand across the country.
Chad Johnson: Yeah. I mean, bread, it can have anywhere from seven to 10 days. Mm-hmm. Some, some of the products are, you know, are cake products. Right. Uh, can have a lot longer shelf life. Uh, but when you're, when you're talking about a product that has seven to day, seven to 10 days of shelf life, you have to get it in the store as quickly as possible.
You have to make sure you're rotating and, and moving that product so that, so that the consumer is going to get the. Best, uh, experience they possibly [00:04:00] can. Mm-hmm. When they, when they purchase your product. Because what you ultimately want is you want them coming back for seconds and thirds and forevers.
Josh Gregory: Yeah. Yeah. You want them to, to make that the staple of their lives and. Show it to their kids and their kids do it too. Absolutely.
Chad Johnson: As an independent distributor, when you're out there and, and, and this is really any business mm-hmm. It all comes down to time, is money. The more time that you have to focus on your merchandising and making your shelf look attractive to the consumer, being able to move on to your, to your next retailer and do the same thing, the more that translates into profits.
Josh Gregory: Yeah, and I think that's a great segue because you know, as much as flowers is focusing on their own growth, an intrinsic part of flowers growing is IDPs also growing and being successful using some of the, the technology that you all are providing, the market research, but finding ways to grow and scale in their territories, to bring the Flowers brand to more and more people.
So let's talk a little bit, [00:05:00] just first, I think, I know in a previous one you kind of at a high level touched on it, but when you think about how. An independent distributor can grow or scale. What are the different ways that, that, um, that can happen?
Chad Johnson: Yeah, so obviously just using the, their geographic territory to grow, to make sure that they are trying to garner as much business as possible.
In that territory. Okay. Yeah. So that's one way. So I'm calling on the nonstops or the white space in my own geographic territory, but it may, you know, if, if you start off and you buy one territory and you know, I, I have potential to, I, I really think that I could grow this business. I want to, to buy some more territories and actually look at having an, uh, an employee model.
Mm. Where I'm running a multi territory operation and, uh, you know, having your own [00:06:00] manager, managers within that territory and, and managing a, a large business as opposed to a one man, one van operation, that that's where you can really start. Um. Realizing some big profits.
Josh Gregory: Yeah, we will, we'll come back to multi route in just a second because there's a lot I want to talk about there.
But, um, when you're, you know, nonstops, you know, adding stops that are in your territory, what does that look like? Do you just walk into a store that you're not selling flowers and, and have a conversation? How does that go? Yeah. So yeah,
Chad Johnson: I mean, you're, you know, it comes from having some of, some of it could be relationships, some of it could be that restaurant that you eat out at with your wife Yeah.
Uh, every week and, and developing a relationship with that, with that manager at that restaurant and say, Hey, you know what? I noticed you're, you're, you know, you're using, uh, x, y, Z bonds. Mm-hmm. Uh. I eat in here every week. I'd love to be able to service you, and I think I've got some great products. Why [00:07:00] don't I drop off some samples for you and let you see what you think and, and, and let's, let's, let's set up a time to, to sit down and talk about it.
Or it could be that small mom and pops grocery store that you go in and just say, Hey. Uh, let's, let's, I'm looking at what your service here and, you know, I come in here, I buy gas here, and, uh, I, I really think I could do a better job for you and, and offer you some, some different product options. And, you know, I, I think I could service you more and make sure that you're, you're staying fully, fully stocked and really getting the maximum profits out of the shelf space in your store.
Yeah,
Josh Gregory: I think that's one of the. The biggest impacts you can have in terms of being in the market or knowing the market that you're in, of being able to say like. I am. I live here, I eat here. I'd, I love this store, but I also have a product I'd love to, to partner with you on. You know me, I know you. Let's, let me just give you an [00:08:00] opportunity to, to try this.
And I think there's it, it's one of those things where. You can bring your specific brand and whatever works for you to all of these opportunities and really find success and grow territory in a way that I don't think there's always the opportunity in some of these businesses because like we've talked about before.
Some of these you have to, every single dollar you earn has to be something that you find. But with flowers, you kinda get the security and the safety of knowing you've got your big brand, your big stops. And those can be the platforms you use to go, you know, I'm gonna go make some, make some calls, go make some stop ins at the local deli and see what I can find.
And I think that really gives you a lot of, it gives you kind of the, the safety to take risks and, and go out and push. And I think that's a kind of a fun. Uh, aspect to the, to the industry.
Chad Johnson: I'll give you a real life example. Okay. Yeah. This is from an independent distributor and, uh, this independent distributor was trying to, there was a [00:09:00] small but good business.
It was a, it was a, it was a breakfast shop. Yeah. And he'd go in there continually trying to garner the business and they, they were like, you know, you got great products. But this, the, the person that's been servicing me has been here for the last 30 years, done a great job, and I just, I'm not going, I don't have any reason to make a change.
Mm-hmm. And, but he never stopped, never stopped calling on them. And this was probably about five years ago. There was a big snow storm in the area and that the person that had been servicing the store. Uh, wasn't going to make it. Mm-hmm. And they called up our IDP and said, we really need some product.
They didn't promise 'em anything, but they said, look, we've, we're gonna run out of product. We've got people coming in here. We need product. Can you help us out? [00:10:00] What do you need? Mm-hmm. I sure can. And he took 'em the product and. Never asked for any business, never made it, okay, I do this, you do that. Mm-hmm.
And just did it, did a smile on his face and within the next three months he had garnered that business.
Josh Gregory: Yeah. Yeah. That's a, a fantastic example of just how you can. Leverage the consistency of your business and, and what you're providing and just be there when it's needed and, and ultimately win those businesses.
Yep. So, you know, I know there's that side of it. I know that you can grow within your existing stores, grow your footprint, but let's talk about multi route ownership, because I think that's something a lot of people don't even. Realize is an option. Even contractors that are in the space now who've been doing it for 20 years, don't even necessarily realize that they could o own multiple routes or multiple territories in this space.
So is this something you've always seen in your 30 years or is it, you know what, what? When was kind of the first time you [00:11:00] started seeing this?
Chad Johnson: So for me personally, the first time I saw it was in 2016. Mm-hmm. And it was mind blowing to me. Yeah. Because even at that time, I mean, I had been with the company for close to 21 years.
Yeah. And. I, I, I met a, a, an independent distributor, uh, in the North Georgia area who was buying his second territory. And I was, this, it just blew my mind. I'm like, how can you possibly do this? Yeah, yeah. You know, now you're gonna have two territories. Uh, what happens when somebody. Calls in sick. Mm-hmm. I mean, how are you going to, to run that other territory?
And, uh, but he saw the potential there.
Josh Gregory: Yeah.
Chad Johnson: And he took the risk, like you were just talking about, right? Mm-hmm. It's a risk. That's what entrepreneurs do. They're, they're gonna take calculated risks and, uh. Try to have a good plan in place and have contingencies when there's problems, because there's always gonna be problems, right?
Yeah. Uh, you're gonna [00:12:00] have a tire blow out on a truck or an, an engine failure, or somebody's gonna get sick. Mm-hmm. I mean, things aren't perfect. Uh, but it worked for him and he said, you know, he told me, he said, uh, having two territories. Uh, was one of the toughest things I did because I didn't have the operating capital, uh, to hire in the management that I needed to make sure that there were safeguards there.
But, you know, I had, I had other, other people there to support me. And, uh, it worked and I kept growing and eventually got to a place where I owned enough territories to where I had the support structure to where, you know, I could have two people call in sick mm-hmm. And I was covered, or, and I had extra truck.
Mm-hmm. So if a truck broke down, I didn't have to rent one and, and pay, have those costs going out the door. Yeah. Yeah. And
Josh Gregory: I, I really think that that's. I think there's a lot of opportunity in this industry and I think, you know, some of what you've said is echoed of [00:13:00] building a business as opposed to just thinking about it as the, the route that you run, but really starting to layer in efficiencies from a management perspective, from a contingency perspective.
And, and I think that adds value for everyone. It's, it's flowers is no longer depending on. One man, one van. You've got a business set up where they can focus on all, all of the operational efficiencies, and they've got layers where if somebody calls out, they've got their own contingencies. You guys don't have to worry about it.
So I think there's a lot of value in it. How have you seen that kind of evolve? You know, you found out 2016 is how you found the first one, but have you found more over the years since then? Oh, yes.
Chad Johnson: Yes. I mean, it's just, it's proliferated. Yeah. And we have a, a, a, a large con contingency now of multi territory owners that are extremely profitable, run great businesses mm-hmm.
And have great business practices. And it's, it's. It helps us because, you know, we do have [00:14:00] company territory. Some of our areas are 100% company territories. They're not independent, uh, distributors. And so some, we have what's called our distributor advisory council, and that is actually comprised all of multi territory owners, so.
Sometimes we go to them and look to them for help, like, where are you recruiting from? Mm-hmm. Where do you find, what are you doing to retain your employees and incentivize your employees? And because they're, they're just, they're running a good business. Yeah.
Josh Gregory: Yeah. And I think that's a, one of the, the really, I think, comforting and exciting things that you all do is that you're going to find.
The best in terms of your IDP base and the ones that are doing it well at scale and really trying to find ways to learn from them to encapsulate what they're doing and find the right ways to help others and support others when you can. But helping to, to just see that, you know, this is a model that [00:15:00] works and instead of saying we don't want anyone to run multi routes, 'cause it's scary, you're really embracing it and instead finding ways to make it work for, for both the IDP and, and flowers.
Yep. Now what's, what's kind of the biggest you've seen somebody start to move towards is, you know, two, three? Like, how, how big have you seen somebody start to, to grow?
Chad Johnson: Uh, 15.
Josh Gregory: Yeah. I
Chad Johnson: believe
Josh Gregory: yeah. Is the most, which is, you know, in the, I think in the bread space is like a, an absurd, astronomical number. Most people wouldn't even, you know, know how to think about that.
But it really does make sense I think for this industry and for what is possible and, and some of the. The changes that I think are possible in this industry in terms of what the contractors are capable of, once they kind of see the possibilities. And that's really, I think, some of the exciting things,
Chad Johnson: right?
Because then they have the operating capital. Mm-hmm. To really. Just build a great business that is there [00:16:00] to take care of their, of their customers, right? Yeah. They have the management in place, they have the vacation relief in place, they have the extra trucks, they have, um, uh, team members that are going into the stores and, um.
Doing the pull-ups, making sure that that bread is looking, just standing tall. Yeah. For, for the, for the customers and the consumers. And, and when, whenever they're, they're shopping and looking at that bread aisle and, um, it just provides a, a. A really strong winning formula for profits.
Josh Gregory: Yeah, it, it's a different level of sophistication that, like you said, I think it adds value for the independent and for, for flowers because the more that they're able to pull back and focus on things like their brand image merchandising and all of their stores and keeping something really consistent.
The better. It'll make that overall territory look in for flowers and for, for all of their stores. And, and [00:17:00] keeping a consistency there that I think is sometimes harder to do. You know, independent to independent. But when you can really look at, you know, 10, 12 and say, I know what good looks like, I'm gonna make sure all of my territories look like that and enforce that at a high level.
Also kind of work with my independents so they can go be, you know, the salesman that I know they're good at being and the deliverers that I know they're being, uh, good at being, but I can kind of provide that top level of support and management.
Chad Johnson: Yeah. And let me tell you another thing that they do, they serve as mentors to the other independent distributors in their area.
Mm-hmm. So they've, most of them have been around a while. Yeah. And. Or they've come from other businesses and they know how to operate a multi territory, uh, DSD delivery business. And you know, especially when you have somebody, uh, young that's coming in, or for lack of a better term, someone that's a little bit green, [00:18:00] they, they serve as mentors.
To those individuals to help them succeed. So I've seen that time in and time out where our independent distributor partners are so supportive of their counterparts and, and helping them succeed, whether it be from, uh, giving them merchandising tips or ordering tips or, or. Whatever it may be, just trying to help them be successful.
And I, I witnessed that as I was coming up and working in a warehouse and just seeing how supportive and the comradery that that is there to make sure that, that everybody's performing at a high level and, and being profitable. It's, it's also advantageous to help, uh, your, your fellow distributors because.
When a retailer looks at service levels, a lot of times they don't look just at a single store. Mm-hmm. They're gonna look at a certain [00:19:00] geography or a certain certain marketing area. So if you have stores that are underperforming because of the service. That can affect stores that are performing, you know, that are having great service.
Yeah. So it, it's advantageous to help those, those younger IDPs learn because it behooves you as
Josh Gregory: well. Yeah, it helps. Helps the, the region. But I think there's just so much to say about. Installing the right processes and the right habits in somebody early and really the, the benefit both to them, but like you said, the, the market as a whole, because at the end of the day, you're all flowers.
Uh, and so if the guy down the street is struggling and. Walmart doesn't like him. That can have a big impact on, on the state, the region, whatever, what, what have you. And so, you know, like I've said before, it's something where if we can raise the acumen of the average contractor, everyone benefits from it.
Chad Johnson: Yeah, [00:20:00] absolutely. And you know, it's, and I don't want the the listeners to think that it's just the, um. Independent distributors there, uh, that are supporting each other. We have multiple layers of support for independent distributors. So there is a, what's called an area sales director in, in each warehouse that is there to serve as, um.
Uh, someone, an ombudsman that is there to help you build your business, to support you. And, you know, it may be, Hey, you know this store manager, I'm really having a hard time forming a relationship. Hey, and, and the a SD area sales director could say, I've got a great relationship with them. Why don't we all go to lunch one day?
That's great. That's
Josh Gregory: huge. You know, because, so, because even if they don't have a relationship with this, that person just a different title can, can do a lot to, to open up doors. But that's, I think that is. Rare to hear, but is really [00:21:00] impactful from a support perspective just to know that the bakery is selling into Walmart, so somebody at Walmart has to know, has to know flowers, and so that you all can open doors or mend bridges.
Yeah. If need be to, to help keep all of the relationships strong.
Chad Johnson: Yeah,
Josh Gregory: absolutely. Yeah. Well, I mean, everything I hear from a growth perspective, it, it really feels like. You know, you all are focused on evolving and adapting and really finding ways to help make sure that in today's economy and the changes that are to come, that your IDPs also are supported and that they have pathways to continue to grow as well.
That, you know, with, with, uh, limits in mind, you don't necessarily put any caps on how big someone can be as long as they're successful, and I think. That opportunity as an entrepreneur knowing that I can manage my territory, that I come in and I can do that successfully, but also I have a, a real chance here to [00:22:00] come in and, and build a multi route larger business that has, you know, larger revenue, larger margins, and I can really build generational wealth for my family is, is a huge opportunity.
And, and the fact that you all build structures and support. Those IDPs as they do it, I think is huge.
Chad Johnson: Yeah. Because at the end of the day, if the IDPs aren't winning, aren't profitable, aren't successful, it translates over Right. To flowers as well. Yeah. Yeah. Well,
Josh Gregory: Chad, I, I think that is just a, a really encouraging look at how you all see the market, where you see it going, how growth, uh, is, is kind of viewed at flowers and how you view the model.
And, and I, I really appreciate your insight on all of this. Thank you for the time today. Yeah, thanks for being here. Thank you, Josh.
