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FOOD

Baker slicing production

The maker of Wonder Bread is closing its Southland bakeries amid changing tastes and falling sales.

August 29, 2007|Jerry Hirsch | Times Staff Writer

Southern California parents packing children off to school this fall may have to do without a lunchtime staple: Wonder Bread.

The company that makes the white bread with red, yellow and blue balloons on the wrapper said Tuesday that it was closing its Southland bakeries and laying off 1,300 workers. But junk-food lovers can take heart: The company locally will still make Hostess Twinkies, Ding Dongs, Ho Hos and other snacks.

It seems that Wonder Bread, once touted as a nutrient-rich way to "build strong bodies 12 ways," has lost ground in health-conscious Southern California.

Essentially, "the company was in the wrong business in the wrong market," said Rich Seban, chief marketing officer for Wonder Bread maker Interstate Bakeries Corp. of Kansas City, Mo.

Shoppers such as Sarah Foss, a court reporter from Upland, are weaning their families off refined flour products. "Wonder Bread is like wallpaper paste," she said.

But others want Interstate to keep selling the bread in Southern California.

"It is the best for peanut and jelly sandwiches," said Susan Johnson of Seal Beach, whose four daughters prefer Wonder and other white breads. "When I give them wheat, I have to sneak it in."

Nonetheless, Southern Californians in particular are partial to whole-grain breads and "premium" loaves from rivals such as Oroweat and Pepperidge Farms, Seban said.

Interstate, however, is pretty much a "white-bread business," he said, and it didn't make financial sense to keep the bakeries open when sales were declining.

The last Wonder loaves will come out of the ovens Oct. 20. All operations at the bakeries will be shut down by Oct. 29. After that, Las Vegas will be the nearest market where Wonder Bread is sold.

Seban said Interstate had no plans to license the brand to another baker or ship the bread to Los Angeles from its bakeries in other regions.

The company, which has been operating under Chapter 11 bankruptcy protection for almost three years, will close all four of its Southland bread bakeries, located in Glendale, Pomona, San Diego and in Los Angeles southeast of USC. The company made a similar move in Washington state two years ago.

Interstate will continue to manufacture money-making products such as Hostess Twinkies and Dolly Madison snacks locally, but it will close 17 distribution centers and 16 outlet stores in the Southland.

The company is also in the midst of labor problems. One of the company's unions called Interstate's closure plans "a back-stabbing double cross."

"They never identified Southern California as a particular problem area, and if they will reconsider we will sit down to see if we can get something done," said Richard Volpe, director of the Teamsters' bakery and laundry division.

Otherwise the Teamsters might consider a strike, which could shut down production of Interstate's profitable Twinkies and other snack cakes, Volpe said.

Workers could strike because the company currently is in contract talks with the unions representing employees at its Southern California bread bakeries, including the Teamsters and the Bakery, Confectionery, Tobacco and Grain Millers union. Almost all of the employees losing their jobs are members of the two unions.

Volpe said Interstate's union workers had already made significant wage and health benefit concessions to keep the company afloat during its financial reorganization.

"Any labor activity would only compound the company's problems and reinforce the Teamsters' lack of concern for our employees and our membership," said Interstate spokeswoman Sandra Sternberg. There are no plans to reverse the decision to close the bakeries, she said.

Interstate said it would continue to seek union concessions on health benefits and more flexible work rules nationwide.

Wonder Bread was first sold more than 80 years ago in Indianapolis and has been offered in Southern California since at least the 1940s.

Interstate acquired the brand when it bought Continental Baking Co. from Ralston Purina Co. in 1995 for $461 million in stock and cash.

In fiscal year 2007, which ended June 2, Interstate posted a net loss of $112.8 million on sales of $2.9 billion.

Wonder Bread has seen its share of the bread business slide in recent years, according to Packaged Facts, a market research firm.

Although it is still one of America's most recognized bread brands, it accounted for only 3.4% of the market in 2005, according to Packaged Facts' latest study. That was down from 4% in 2001.

Interstate has lost ground in recent years to fast-growing brands such as Oroweat, a unit of Mexican baker Grupo Bimbo, and Sara Lee Fresh Bread.

Once America's most popular bread, white bread's share of the market has dropped dramatically in recent years. Consumers now divide their preferences about equally between white and whole wheat, according to Packaged Facts.

Johnson, the Seal Beach mother of four, said she would rely on other brands to feed her family's white-bread habit. "I know it might not be that good for you, but it sure is good."

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jerry.hirsch@latimes.com

Times staff writer Martin Zimmerman contributed to this report.

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