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General Mills to Buy Annie’s Homegrown for $820M: Sell-out or Sell-up?

Within minutes of the announcement that General Mills was acquiring Annie’s, the beloved maker of bunny-shaped crackers and organic mac ‘n cheese, the social media sphere lit up with consumer response … and the vast majority of viewpoints on the pending deal were far from positive.

General Mill’s announcement tapped into the raw nerve of distrust felt widely across the US: large food companies dominate food choices in the grocery store without concern or regard for the health of the consumer. Consumers widely perceive large food companies, like General Mills, as having lied to the general public over the course of several decades in an effort to promote inferior food products containing synthetic and or sub-quality ingredients in order to drive profit margins irrespective of the impact on consumer’s health.

On Facebook, loyal consumers were outraged primarily over General Mills history of heavily funding the opposition to labeling Genetically Modified Organisms (GMOs). Consumers are concerned that General Mills will use revenues derived from Annie’s extensive line of GMO-free products to fund opposition to GMO labeling. They are also concerned that Annie’s Homegrown has lost control of their product line and could begin containing GMO ingredients.

The sale of Annie’s Homegrown to General Mills brings to the surface consumer’s frustration over seeing a company that successfully overcame widespread distrust of the food industry being taken over by a company who is perceived as having no moral compass.

Annie’s Homegrown successfully won consumer trust in an era of cynicism around the food industry.  Will outrage in the social media sphere translate to a loss of revenues, or will it be a temporary expression of disappointment that has little to no impact on buying habits?

Founded in 1989, Annie’s has grown from a small player in the food business to one that had $204 million in food sales in the last fiscal year on over 145 products across 35,000 retail locations. Its rise has corresponded with the huge growth in consumer demand for organic food. Annie’s claims its products are made without artificial flavors, synthetic colors, or preservatives used in many other conventional packaged foods — like the ones General Mills is known for.

Posted in: Blog, Current Affairs, News

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