Fans of Annie's Homegrown got some assurances Wednesday that the organic food company won't be straying far from its roots after it becomes part of corporate food giant General Mills.
During a quarterly earnings call, General Mills executives said they're going to give Annie's relatively free rein, the Minneapolis-St. Paul Business Journal reports.
When the acquisition was announced last month, many Annie's fans were concerned the company might lose its unique appeal when it becomes part of a huge corporation.
But Golden Valley-based General Mills says Annie’s, known for its salad dressing, macaroni and cheese and other packaged products, will keep its headquarters and most of its staff in Berkeley, California, according to the Business Journal.
"These are very talented people and they've built a really good brand. The key for us is figuring out which capabilities we have to help them," said General Mills CEO Ken Powell.
Annie's will become one of the brands controlled by General Mills' Small Planet Foods, its organic and natural foods division. Other brands include Glen Muir, Larabar, Cascadian Farm and Food Should Taste Good.
"We've learned a tremendous amount from these various natural and organic companies we have acquired and we have been very good about leaving them alone, letting them do their thing," Powell said, according to the Business Journal.
Annie's reported $204 million in sales for the fiscal year ending in March, The Wall Street Journal reports. The company went public two and a half years ago at $19 a share, rising to more than $50 a share last October.
The $820 million deal should be completed by the end of the year.
Earnings report: Spending cuts may be coming
Much of the conversation on Wednesday's conference call focused on the company's weak first-quarter performance, with a 12 percent decline in profits, lower sales in many sectors, and net earnings that fell short of Wall Street expectations.
As a result, General Mills said it will cut $100 million in spending over the next year as it reviews its manufacturing and supply chains in an undertaking it's calling "Project Century," the Star Tribune reports. That's on top of $40 million in previously announced cost-cutting measures.
The Business Journal, which says "Project Century" sounds like a super villain plot – and just as secretive – looks at some of the areas which could see cuts.
The company had net earnings of $345 million or 55 cents per share in the first quarter of its fiscal year. Not including nonrecurring items, per-share earnings were 61 cents, lower than the forecast of 69 cents, said the Star Tribune.
Sales were down in several areas, but those in the company's largest sector – cereal – fell 9 percent compared to a year ago. Here's a breakdown by category, from the Business Journal.
U.S. Retail Sales, Fiscal First Quarter
- Snacks: Up 3 percent
- Small Planet Foods: Up 2 percent
- Yoplait: Up 1 percent
- Frozen foods: Down 6 percent
- Cereals: Down 9 percent
- Baking Products: Down 11 percent
- Meals: Down 13 percent