Flowers Foods has entered into an agreement to acquire the largest organic bread company in the U.S., Dave’s Killer Bread, for $275 million in cash.

 

Dave’s Killer Bread has one bakery in Milwaukie, Oregon where it produces 17 varieties of whole grain, organic products that it distributes throughout the U.S. and Canada. Following the closing of the deal, which will expand Flowers Foods’ reach into the Pacific Northwest and Canada, Dave’s Killer Bread will operate as an independent subsidiary.

 

“We are very excited about the pending acquisition of Dave’s Killer Bread,” said Allen L. Shiver, president and chief executive officer of Flowers Foods. “This is a well-positioned, fast growing company with excellent brand equity and an on-trend organic portfolio that appeals to today’s consumers.”

 

After beginning by selling bread at a farmers market, Dave’s Killer Bread is expected to generate between $160 million and $170 million in sales during fiscal year 2016.

 

Over the past four years, the organic bread segment has seen a growth rate of 27%, outperforming the wider $23 billion retail baked goods market. During that time, Dave’s Killer Bread increased its sales by 25% in the past year, and by 168% in the three years prior. As of late 2014, the company was baking 400,000 loaves per week – an 87% jump over 2012, and was eyeing nationwide distribution by the end of 2015.

 

Flowers Foods has been making additional strategic moves to gain the millennial consumers’ attention, mainly through the renewal of the company’s 1980s era Cobblestone Mill brand under the Cobblestone Bread Co. to meet the “desire to create restaurant-quality sandwiches at home.”