Major Bakery Closing Locations – Reducing Food Processing Footprint

Interstate Bakeries Hostess Bakery

Interstate Bakeries Corp., the maker of the iconic Wonder Bread and other baked goods, said Tuesday it will no longer make or sell bread in Southern Califonia, closing its bakeries in San Diego, Los Angeles, Pomona and Glendale.

The San Diego bakery employs about 80 workers and makes buns and rolls under the Millwood brand. Interstate also said it will close 17 distribution centers and 19 outlet stores, including five locations in San Diego County. In total, some 1,300 workers will be affected throughout Southern California. The company plans to deliver bread products until Oct. 20. Other brands affected include Home Pride Bread, Baker’s Inn and Roman Meal.

IBC, which also makes Ding Dongs and Twinkies, said it plans to continue selling its line of Hostess and Dolly Madison snack cakes in the area.

The closing of the company’s bread operations in Southern California comes as IBC continues to struggle to improve its business, which has been hurt by declining sales and higher costs. The Kansas City company filed for bankruptcy in 2004. For the fiscal year ended June 2, IBC reported a net loss of $128.5 million on sales of $2.92 billion.

Craig Jung, chief executive of IBC, said the decision was difficult but necessary as the Southern California bread business continued to be a drag on the company. Among the competitive pressures, he said, were the growth of low-cost, non-union rivals as well as changing consumers demands. Compounding the problem, Jung added, was the high cost of doing business in California including what he called the “excessive” workers’ compensation insurance costs and a confrontational relationship with one of the company’s main unions.

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