Campbell Soup Goes Grocery Shopping, Spends $231M On Salsa

Consumers have made their preferences known: their tastes are turning more toward fresh, organic, and minimally processed food. Large food manufacturers like Hormel and Campbell Soup Company are solving this problem by going out and acquiring smaller independent brands in the “fresh and organic” sector that people already like. The Campbell Soup Company announced today that it’s buying Michigan-based Garden Fresh Gourmet for $231 million.

While “organic” has a set meaning according to the U.S. Department of agriculture, other terms like “fresh,” “natural,” and “local” don’t. That’s what consumers want, though, and that’s why Spam-maker Hormel purchased “natural and organic” meat company Applegate Farms last month. General Mills bought beloved organic snack and pasta company Annie’s last year, a transaction that made some customers react with outrage, and others with a shrug.

In these transactions, the “natural” brand keeps its identity, but becomes part of a larger company with a more expansive distribution network. That’s how such acquisitions are supposed to work, anyway: in a few years, it will be interesting to see whether these brands stay independent.

How did Campbell executives find Garden Fresh Gourmet? The head of the company’s “fresh” division told Reuters that they literally wandered around a grocery store looking for brands that no larger conglomerate had acquired yet.

“Garden Fresh was the only significant brand in that space that hadn’t been acquired,” he explained. “We knew eventually the family was going to sell the business.”

Garden Fresh Gourmet makes hummus, salsa, chips, and dip. While the new acquisition is supposed to remain independent within the larger Campbellverse, there are interesting overlaps with its existing Pepperidge Farm and Pace divisions. Acquiring new customers by acquiring independent brands has worked out well for Campbell, which also owns the Bolthouse Farms vegetable and Plum Organics baby food brands.

Campbell Soup to buy salsa maker Garden Fresh for $231 mlm [Reuters]