Flowers Foods, Inc. (FLO, NYSE)
Industry: Packaged Foods
Annual report, fiscal year 2011


Dear Shareholder:

Flowers Foods delivered solid sales growth in 2011, a year marked by continued economic and marketplace pressures. This performance demonstrates the strength of our fresh bakery business, the power of our Nature’s Own brand, and our ability to grow our company by market expansion and acquisitions.

Earnings for the year were impacted by high input costs resulting from volatile commodity markets and consumer reaction to food inflation. We are managing through these challenges so we can deliver future results in line with our long-term targets.

Key results for 2011: sales of $2.77 billion, up 7.8% from 2010; net income of $123.4 million, down 9.9%; and diluted earnings per share of $.90, down 9.1%. Adjusted for one-time charges related to the Tasty Baking acquisition and a facility closure, diluted EPS for the year was $.96, down 3.0%.

The year 2011 was marked by a number of significant events. In March, we announced new long-term goals for annual sales growth of 5% to 10%, including acquisitions, EBITDA margin of 11% to 13%, and double-digit earnings per share growth. We also expect that by 2016, at least 75% of the U.S. population will have access to our Nature's Own brand, already the best-selling soft variety bread brand in the country. Acquisitions, market expansion, new bakeries, and further penetration of core markets will help us achieve our growth goals.

In May, we acquired Tasty Baking Company, with two cake bakeries in Pennsylvania, the iconic Tastykake brand, and an outstanding team of employees and sales distributors. Tasty surpassed our sales expectation for the year. In September, we began introducing Tastykakes into Flowers' core markets, and we are pleased with consumer acceptance. We will be introducing Nature's Own and other bread brands into Tasty's market in the Northeast in 2012.

In 2011, the consolidation of the U.S. baking industry continued. Flowers Foods now is a strong number two in the total U.S. baking industry and one of only four large companies focused on the fresh baked foods category. With industry consolidation underway, we expect further acquisition opportunities.

We continue to improve productivity, reduce waste, and control costs, while enhancing the quality of our products. We have charged every department—and every team member—with finding ways to do things better and more efficiently. We remain committed to reinvesting in our bakeries, developing new products, and providing outstanding service to our customers—actions that continue to give Flowers Foods considerable competitive advantages.

We appreciate the hard work and initiative of our employees as they work The Flowers Way, and the efforts of all our independent distributors and associates. Our talented team is one of our greatest assets. We also recognize the valuable guidance of our board of directors.

Despite the challenges faced in 2011, we have never been more confident in the future of Flowers Foods. We are focused on operational excellence, marketplace execution, and growth opportunities—all of which will build value for our shareholders over the long-term. Thank you for your investment in our company.



George E. Deese
Chairman and CEO



Allen L. Shiver
President



Flowers Foods, Inc. (NYSE: FLO), with $2.8 billion in sales, is the second-largest producer and marketer of packaged bakery foods in the U.S. We operate 41 highly efficient bakeries that produce breads, buns, rolls, tortillas, snack cakes, and pastries. Fresh bakery foods are available to more than 60% of the U.S. population in 31 states, primarily in the Southeast, Southwest, and mid-Atlantic regions, as well as select markets in the Northeast, California and Nevada, and are distributed by a network of independent distributors. Frozen bakery foods and snack cakes are sold nationally through customers' warehouses. Our top brands--Nature's Own, Tastykake, Cobblestone Mill, and Mrs. Freshley's--are known for quality, value, and good taste. We also sell baked foods under such regional and franchised brands as Sunbeam, Bunny, ButterKrust, Captain John Derst's, Evangeline Maid, Mary Jane, Aunt Hattie's, and Holsum.



## QUICK FACTS

Stars = bakery locations

PRODUCT MIX8% fresh bread, buns, rolls, tortillas; 13% fresh snack cakes, pastries; 8% frozen breads, rolls; 1% mixes

SALES CHANNEL36% supermarket/drug; 29% mass merchandiser/discount; 26% foodservice; 4% convenience stores, 5% other

DISTRIBUTION2% direct store delivery (DSD); 18% direct to customers warehouses

## FINANCIAL HIGHLIGHTS

<table><tr><td></td><td>u</td><td>&#x27;</td><td>Z</td><td>V</td><td>(</td><td>Z</td><td>.</td><td>o</td><td>&#x27;</td><td>v</td></tr><tr><td></td><td></td><td></td><td>X</td><td>U</td><td></td><td>:</td><td>vX</td><td>U</td><td></td><td>9</td></tr><tr><td>Sales</td><td></td><td></td><td>$2,773,356</td><td></td><td>$2,573,769</td><td></td><td></td><td>7.8%</td><td></td><td></td></tr><tr><td>Net income</td><td></td><td></td><td>$123,428</td><td></td><td>$137,047</td><td></td><td></td><td>-9.9%</td><td></td><td></td></tr><tr><td>Diluted net income per share</td><td></td><td></td><td>$0.90</td><td></td><td>$0.99</td><td></td><td></td><td>-9.1%</td><td></td><td></td></tr><tr><td>Cash dividends per common share</td><td></td><td></td><td>$0.583</td><td></td><td>$0.517</td><td></td><td></td><td>12.8%</td><td></td><td></td></tr></table>

{ Acquired Tasty Baking Co., with two bakeries in Pennsylvania, and introduced Tastykakes into Flowers core markets

{ Invested $79 million in capital projects to enhance industry position as the low-cost producer

{ Added 2 new production lines to bakeries in Texas

{ Introduced Nature's Own 100% Whole Grain Specialty Bread and 100% Whole Grain Sandwich and Hot Dog Rolls

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ANNUAL SALES GROWTH - 10%
(organic growth 3% - 5%, acquisitions 2% - 5%)
EBITDA MARGIN % - 13%

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{ DSD sales added: .5% to 1% annually



Existing DSD territory in 2004 38% of U.S. population

Territory added 2004 - 2011 61% of U.S. population

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THE FLOWERS WAY

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## FlowersFoods

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Together, we work to be a truly exceptional company focused on growth opportunities for grain-based foods.

OUR MISSION

To drive sustainable growth that enhances value for our shareholders, associates, distributors, customers, consumers, and communities
OUR GUIDING PRINCIPLES

Integrity, service, quality, commitment

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## SHAREHOLDER INFORMATION

ANNUAL MEETING will be held at 11:00 a.m. on Friday, June 1, 2012 at the Thomasville Municipal Auditorium in Thomasville, Ga. dZ v ` } oo ` o] ` XG } ( ) } X } uX

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Computershare toll free at 800.568.3476; write to Computershare at P. O. Box 43078, Providence, RI 02940-3078; or register on i ts
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CORPORATE OFFICE

1919 Flowers Circle

Thomasville, GA 31757

229.226.9110



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<table><tr><td></td><td>December 30, 2006</td><td>December 29, 2007</td><td>January 3, 2009</td><td>January 2, 2010</td><td>January 1, 2011</td><td>December 31, 2011</td></tr><tr><td>FLOWERS FOODS INC</td><td>100.00</td><td>135.53</td><td>138.11</td><td>141.73</td><td>165.42</td><td>180.35</td></tr><tr><td>S&amp;P 500 INDEX</td><td>100.00</td><td>106.22</td><td>68.56</td><td>84.06</td><td>96.73</td><td>98.77</td></tr><tr><td>S&amp;P 500 PACKAGED FOODS &amp; MEAT INDEX</td><td>100.00</td><td>102.98</td><td>91.17</td><td>105.42</td><td>122.67</td><td>143.75</td></tr><tr><td>S&amp;P MIDCAP 400 INDEX</td><td>100.00</td><td>108.60</td><td>70.53</td><td>94.60</td><td>119.81</td><td>117.73</td></tr></table>

Companies in the S&P 500 Index, the S&P 500 Packaged Foods and Meats Index, and the S&P MidCap 400 Index are weighted by market capitalization and indexed to $100 at December 30, 2006. Flowers Foods share price is also indexed to $100 at December 30, 2006. These prices have been adjusted for stock splits.

## Purchases of Equity Securities by the Issuer and Affiliated Purchases

Our Board of Directors has approved a plan that authorized stock repurchases of up to 45.0 million shares of the company’s common stock. Under the plan, the company may repurchase its common stock in open market or privately negotiated transactions at such times and at such prices as determined to be in the company’s best interest. These purchases may be commenced or suspended without prior notice depending on then-existing



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