Milling & Baking News - September 16, 2014 - 9

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General Mills expanding in natural,
organic segment with Annie's
Continued from Page 1

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."
In its fiscal year ended March 31,
2014, Annie's had net income of
$15,289,000 on sales of $204,104,000.
As recently as fiscal 2010, the company's annual sales were less than
$100 million. The company operates in three categories: Meals (fiscal 2014 sales of $99 million); Snacks
($79 million); and Dressings, Condiments and Others ($26 million). The
company's 145 different products include many in grain-based foods, including macaroni and cheese, frozen
pizza, cookies, crackers, pretzels,
graham crackers and granola bars.
General Mills said it intends to
fund the acquisition through available
credit, and will launch a tender offer
within 10 business days to purchase
all outstanding shares of Annie's.
The board of directors of Annie's
unanimously has recommended
that stockholders accept the General Mills offer, saying the acquisition
will enable Annie's to enter a new
phase of growth and success while
maximizing value for stockholders. The transaction consideration
represents a 51% premium over

Annie's 30-day average closing price
of $30.47 as of Sept. 5, 2014. Annie's
headquarters will stay in Berkeley,
General Mills said.
"We are excited about this strategic
combination, which will enable Annie's to expand the reach and breadth

of our high quality, great tasting organic and natural products, provide
new opportunities for our employees, realize greater efficiencies in our
operations, and maximize value for
our stockholders," said John Foraker, chief executive officer of Annie's.
"Powerful consumer shifts toward
products with simple, organic and
natural ingredients from companies
that share consumers' core values
show no signs of letting up. Partnering with a company of General Mills'
scale and resources will strengthen

Wal-Mart ramping up food
presence in Canada
NEW YORK - At the Goldman
Sachs Global Retailing Conference
Wal-Mart Stores, Inc. discussed its
plan to strengthen its position in
Canada. The move comes as Target
Corp., a key competitor, ramps up
its presence north of the border after
entering Canada in 2013.
"The best thing about their entry was the notice that everybody
got about them coming," said Dave
Cheesewright, president and chief
executive officer of Wal-Mart International. "It has accelerated the performance particularly of assortment
management of the Canadian business because we knew someone else
was coming into our marketplace."
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One of the tactics that Wal-Mart
implemented was through the
growth of food for the business, the
"second-biggest trend in Canada,"
said Mr. Cheesewright. Wal-Mart
has opened more than 260 food

stores over the last five years, and
they are not finished just yet.
"We've taken the vast majority of food
growth in that market over the last five
years, and we have still got a few more
years to keep focusing on that," he said.
Wal-Mart has been able to expand

Business

our position at the forefront of this
trend, enabling us to more rapidly
and efficiently expand into new
channels and product lines in a
rapidly evolving industry environment."
Mr. Foraker said Annie's will
remain dedicated to its mission:
"to cultivate a healthier and happier world by spreading goodness
through nourishing foods, honest
words and conduct that is considerate and forever kind to the planet.
Authentic roots, great tasting products, high quality organic and natural ingredients, and sustainable business practices will continue to be the
cornerstones of the Annie's brand."
Founded in 1989, Annie's products are made without artificial
flavors, synthetic colors and preservatives regularly used in many
conventional packaged foods. Additionally, Annie's sources ingredients
so as to avoid synthetic growth hormones and bioengineered food ingredients. The company offers more
than 145 products and may be found
in more than 35,000 retail locations
in the United States and Canada.
The company was established in
Hampton, Conn., by Annie Withey
with Andrew Martin and named
Annie's Homegrown, Inc. with the
goal of "making a healthy and delicious macaroni and cheese for families." In April 2012, the company
raised $11.1 million in an initial public
offering. At the time, Solera Capital
L.L.C., a private equity group, sold an
additional 4.8 million shares at the offering price of $19 per share. MBN
its Canadian food business by putting grocery sections inside existing stores rather than physically
expanding.
"Quite a lot more stores where
we'll put food inside the existing box
rather than to go through the cost of
expanding," Mr. Cheesewright said.
The opening of food stores by
both Wal-Mart and Target has had
an impact in the market. Adding
about 370 new stores (about 260
Wal-Mart, 120 Target) into a market where there is "a lot of food
competition into the area anyway"
has that effect where some of the
smallest retailers are squeezed out
because it gets close to the point of
saturation. Mr. Cheesewright sees
this as a good thing and just an opportunity for "everybody else to be
better." MBN
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Milling & Baking News - September 16, 2014

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