As such, Foraker stands at the pinnacle of one of the most significant symbiotic relationships in the industry. The combination—formed when Minneapolis-based General Mills acquired Silicon Valley-based Annie’s–already is the No. 3 producer of natural and organic foods in the U.S. market.
General Mills now is on track to hit $1 billion in organic and natural sales by fiscal 2019, up from $675 million now—which puts General Mills a year ahead of its previously-announced goal. Annie’s already has grown to nearly $300 million a year in sales from about $200 million when General Mills bought the company in late 2014 for about $821 million.
It’s up to Foraker to maximize the benefits for both sides of the deal. “We’re taking the best practices and our knowledge of the industry and how to stay relevant across channels [at General Mills] and applying those best practices at [Annie’s] brands and leveraging them across operating units to drive growth,” Foraker told Manufacturing CEO Briefing.
Foraker has been leveraging General Mills’ product-development, manufacturing, distribution and marketing clout to take Annie’s far beyond its earlier constraints and categories, which include its beloved line of macaroni and cheese, and kids’ snack crackers. As a result, Annie’s fielded about double the number of new products last year as the year before; is entering entire new categories including soup, yogurt and cereals; and is now in important new distribution streams including schools.
Meanwhile, Foraker is showing Annie’s new owners how to formulate better-for-you products, how to develop them faster, and how to tap into enthusiastic consumer bases around organic foods, and is providing the larger company with a new growth engine.
Annie’s brain trust even is helping General Mills with acquisitions of other better-for-you startups. In fact, Foraker now also is in charge of General Mills’ “center of excellence” for organic and natural foods.
Foraker said that General Mills has stuck to its promises to let Annie’s run itself. “We haven’t been asked to compromise once on our products, what we stand for, what we message about.”
For its part, he said, General Mills has benefited from Annie’s as well as vice versa. “We bring a different culture—faster, more entrepreneurial, more willing to take risks.” For instance, when Annie’s decided to introduce soup last year, the product-development cycle was only eight or nine months, “which was typical Annie’s speed,” Foraker said, “but very fast for a big CPG.”
Ditto for consumer engagement. “Annie’s is a real leader in creating rich, deep fabric of the brand in the digital area with authentic content and an incredibly creative team. General Mills is looking at that in terms of how they can develop brands in the same way and trying to become more creative.”
In addition to running General Mills’ organic businesses overall, Foraker is on the advisory board of 301 Inc., the General Mills initiative in which the corporation is taking equity stakes and making investments in startups.
He said that 301 Inc. represents “a pretty strong recognition that the most authentic brands are going to be entrepreneurial brands that get acquired. Then the trick becomes, how do you bring them in and make them great but not make them lose their soul?”
In establishing 301 Inc. and acquiring Annie’s, Foraker said, General Mills was recognizing a tectonic shift among consumers in their food values, which in many ways caught Big Food off guard. “People with challenger brands like me were surprised that it took Big Food that long. But now they have realized what’s changed.”