Annie’s Is Driving General Mills Toward Pinnacle of Organic Foods Segment

Posted February 18, 2016 by Dale Buss

General Mills is the No. 3 producer of natural and organic foods in the US market, and it has been propelling itself toward the top of the segment since its acquisition of Annie’s Homegrown less than 18 months ago.

In fact, the giant of the traditional, processed CPG business is on track to hit $1 billion in organic and natural sales by fiscal 2019, up from $675 million now, which puts it a year ahead of its previously announced goal. “That is without additional acquisitions,” Jeff Harmening, executive vice president and chief operating officer of the company’s US Retail business unit, told attendees this week at the Consumer Analyst Group of New York conference in Florida.

Silicon Valley-based Annie’s has close to $300 million in sales thanks to how General Mills, Annie’s and its CEO who stayed on, John Foraker, have leveraged their union in an explosion of new products and broader distribution.

For instance, Annie’s is bringing out its first line of organic cereals under General Mills after an earlier cereal venture as an independent company suffered from lack of mainstream distribution.

General Mills had been nibbling at natural and organic since 2000 with the acquisition and expansion of brands including Larabar, Cascadian Farm, Muir Glen and Food Should Taste Good—and has just added meat-based snack bar brand Epic Provisions.

But Annie’s has been the gateway to General Mills’ becoming a key player in the space. The brand is “specially positioned with gatekeeper mom,” Harmening told FoodBusinessNews.

“In addition to the categories the company was already in, we see growth opportunities in additional categories like soups, cereals and yogurt.”