General Mills Builds Organics Portfolio with $820m Acquisition of Annie's Homegrown
General Mills is about to put an impressive new feather in its cap – the cereal and processed foods giant has announced that it has agreed to acquire cult favorite organic food company Annie’s Homegrown for a cool $820 million in cash.
“This acquisition will significantly expand our presence in the U.S. branded organic and natural foods industry, where sales have been growing at a 12 percent compound rate over the last 10 years,” said Jeff Harmening, General Mills Executive Vice President and Chief Operating Officer - U.S. Retail, in a statement to the press. “Annie’s competes in a number of attractive food categories, with particular strength in convenient meals and snacks – two of General Mills’ priority platforms. Consumers know and trust Annie’s purpose-driven culture and authentic brand. We believe that combining the Annie’s product portfolio and go-to-market capabilities with General Mills’ supply chain, sales and marketing resources will accelerate the growth of our organic and natural foods business.”
On the plus side, this really speaks to the continually growing power and draw of the organic industry. General Mills alone has collected several organic better-for-you brands into its portfolio from Cascadian Farm and Muir Glen to LÄRABAR. It’s easy to see why, too – according to General Mills itself, its organics portfolio netted the company $330 million in sales over the last fiscal year. Major food processing companies are no longer ignoring organics, but are recognizing their appeal and potential and doing their best to get in on the action.
On the other hand, however, this move also has the potentially to slightly tarnish Annie’s Homegrown in the eyes of its most diehard consumers – brands don’t always stay the same once they are bought out by larger companies, after all, sometimes compromising on ingredients or changing recipes. It will be up to General Mills to prove that this won’t be the case by showing respect to the brand, its recipes, and the consumers who love them and made Annie’s a desirable and lucrative enough property to consider acquiring in the first place.
[SOURCE: General Mills via New York Times]