KROGER TO SELL ITS MEMPHIS BAKERY TO FLOWERS

CINCINNATI -- Kroger Co. here has agreed to sell its Memphis, Tenn., bakery to Flowers Bakeries Inc., Thomasville, Ga.

owers Industries business units include Mrs. Smith's Bakeries and Keebler Foods.

Under the agreement between Kroger and Flowers Bakeries, Flowers will supply Kroger-brand bakery products to more than 210 Kroger stores in the Nashville and Delta Kroger marketing areas. The bakery company currently supplies its own brands of fresh breads, rolls and pastries to several Kroger marketing areas.

"The agreement reflects Kroger's continued focus on improving its manufacturing and distribution operations while providing quality Kroger-brand products to our retail stores," said Geoffrey J. Covert, Kroger senior vice president and president of Kroger manufacturing.

"Flowers Industries is the nation's largest baked-foods company and has an excellent track record for supplying products with strong consumer acceptance. We are confident they will be an excellent supplier to our Nashville and Delta markets," Covert added.

The Memphis bakery has two production lines that currently turn out breads, buns and rolls for Kroger stores in Tennessee, northern Arkansas and southern Missouri.

"This agreement gives Flowers Bakeries a manufacturing facility to better service this geographic area. It also provides the company with greater access to these new market areas," said Amos R. McMullian, chairman of the board and chief executive officer of Flowers Bakeries.

At the time the agreement was announced, Sept. 28, it had not been determined exactly which Kroger private label or propriety-brand products would be made at the Memphis facility, a spokeswoman at Flowers Industries said.

She also said it had not been determined whether the company would be supplying supermarkets, other than Kroger units, with products made at the Memphis facility.

Officials at Kroger's corporate offices here could not be reached for comment.

The agreement between Flowers Bakeries and Kroger is expected to be completed within the next two months, subject to regulatory approval, Flowers officials said.

Kroger, the nation's largest supermarket chain, which recently merged with Fred Meyer Inc., Portland, Ore., operates 2,192 stores.