Campbell Soup Company CPB has closed its previously announced acquisition of leading refrigerated salsa maker, Garden Fresh Gourmet for $231 million. The acquisition is in line with the company’s initiative to expand its packaged fresh and organic foods categories.
Garden Fresh Gourmet, which also makes hummus, dips and tortilla chips, will be a part of Campbell’s recently formed Campbell Fresh unit that include Bolthouse Farms fresh carrots, refrigerated juices, salad dressings and kids snacks, the 1915 brand of cold-pressed organic juices and Campbell's retail refrigerated soups. As the products of Garden Fresh Gourmet complement Campbell’s Bolthouse Farms portfolio, this will give the latter a scope to further enhance its deli offering.
This acquisition marks Campbell’s third venture into the fresh and organic foods line over the past few years. The company commenced the strategy of building upon these categories with the acquisition of Bolthouse Farms in 2012, followed by Plum Organics in 2013. Another acquisition made to boost overall business growth was that of the biscuit company Kelsen in 2013.
This Zacks Rank #2 (Buy) company expects its Campbell Fresh division to contribute over $1 billion to annual net sales post the integration of Garden Fresh Gourmet, which reported net sales of $100 million for 2014.
Garden Fresh Gourmet will continue to operate from its headquarters in Ferndale, MI. Further, Todd Putman, General Manager–Garden Fresh Gourmet, will head its team of 500 employees operating as a unit of Campbell Fresh.
Given the recent shift in consumer interest toward fresh and organic food products, Campbell has been losing market share with fading popularity of its canned soups and vegetable juices. As a result, sales of Campbell's brands including V8 Juice, Pepperidge Farm cookies, Prego pasta sauces and soups under its namesake brand have diminished over the past few quarters. This has led the company to pursue fresh and organic foods.
However, there are companies which are already benefitting from their significant presence in the organic foods and packaged fresh categories. These include The Hain Celestial Group Inc. HAIN and The WhiteWave Foods Company WWAV.
Another packaged foods company, General Mills Inc. GIS is also focused on expanding its organic product offerings, as evident from its recent acquisition of Annie’s.
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