Annie's CEO Defends General Mills Buyout of Organic Food Company

Boxes of Annie's shell pasta are seen displayed on a shelf at Berkeley Bowl on March 28, 2012 in Berkeley. (Justin Sullivan/Getty Images)
Boxes of Annie's shell pasta are seen displayed on a shelf at Berkeley Bowl on March 28, 2012 in Berkeley. (Justin Sullivan/Getty Images)

The CEO of the Berkeley-based organic food company Annie’s Homegrown is defending the company's decision to accept an $820 million buyout from food giant General Mills.

Annie’s, which is famous for its organic mac and cheese and Cheddar Bunny crackers, had been struggling this year with rising food costs when General Mills announced the buyout. General Mills Executive Vice President Jeff Harmening said in a press release that Annie's is strong in two priority platforms, "convenient meals and snacks"

"We felt that is was a really great time to partner up with somebody like General Mills because our mission is really making products like ours available to a much, much broader set of consumers," said Annie's CEO John Foraker. "And to further our mission, we want to be a bigger brand and we want to be impactful in more consumers' lives."

But some Annie's fans worried online that the deal meant the company would stop using organic non-genetically modified ingredients or sustainable agriculture practices.

Foraker said that won't happen.

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"One of the reasons there's a backlash is because people love the brand so much, and they're emotionally connected to it and they want to make sure it remains true to itself. And I can tell you candidly, very flat-out, that's exactly what we're going to do, he said."

This buyout is part of a trend of giant food corporations adding natural and organic lines, said Kathryn De Master of UC Berkeley. De Master, who teaches in the agriculture, society and environment department, said companies like General Mills are seeing a drop in their own market share and are looking to natural food brands to make up those losses.

"In general, consumers can expect the product to remain somewhat stable or at least similar, because one of the reasons why General Mills is purchasing a company like [Annie's] is because they recognize the value of that brand and they recognize what consumers are wanting," she said.

But De Master said she and others who study the food industry worry that if organic brands start losing money, parent companies will compromise on ingredients or drop the brands altogether.

"At what point will General Mills or companies like them, Pepsi, Coke, Nestle, Diamond Foods, Bimbo Bakeries, all these companies that are buying these natural food companies, if they don't share the same values, at what point will eventually those values get watered down?" she asked.

Foraker said Annie's will continue to stand for organic products and sustainable practices.

"We're not going to compromise our principles, that's been clearly understood," he said of the buyout process. "And we think that they know that's the best thing for the brand. And for this brand to remain authentic and to turn into a really valuable asset for General Mills, we need to both stay committed to those things."

The company will stay in Berkeley. Foraker says it's too soon to say if there will be layoffs.

 

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