Homegrown Natural Foods, Inc. (Homegrown) today announced it entered into agreements to acquire Napa Valley Kitchens, Inc., and Fantastic Foods®, Inc. Homegrown, a majority stakeholder in Annie’s® Homegrown Inc., the leading brand of packaged natural macaroni and cheese products, now adds Napa Valley Kitchens’ Consorzio® brand, the pioneer and leader in natural 10-minute marinades, salad dressings and flavored olive oils, and Fantastic Foods, the innovator and industry leader in soup and meal cups, to its corporate line-up. With these acquisitions, Homegrown becomes a growth player in the natural food industry, currently valued at $11 billion.(1)
Under the agreements, which are expected to close following receipt of regulatory approval and fulfillment of certain other conditions, Homegrown will acquire and operate the companies as wholly owned subsidiaries. On a fully consolidated basis, Homegrown will have projected sales of approximately $50 million per annum. While the total food business is showing moderate one to two percent annual growth, the natural foods sector is growing at 15 to 20 percent annually. Industry analysts predict that the natural food industry will double over the next three years.(2)
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According to John Foraker, Homegrown’s co-founder and CEO, “Consorzio and Fantastic are well loved brands that meet consumers’ demands for great tasting, convenient natural foods. All consumers, whether traditional natural food purchasers or not, are seeking natural alternatives to the staple brands found in their local supermarkets. Our goal at Homegrown is to build these acquired brands and make them available to more consumers, while remaining true to the product quality and brand heritage created by each company’s founders. By leveraging our size and financial resources, we intend to bring high quality, innovative products to market faster, as well as improve our ability to partner with retail and distributor customers and the broker sales community.”
Food industry analysts project Homegrown’s bold move will make it a significant player in the natural foods category. “Homegrown’s strategic acquisitions are notable in this traditionally, highly fragmented natural food industry,” commented Carole Buyers, natural food analyst of Tucker Anthony Capital Markets. “All these brands deliver on current consumer purchase priorities. They are better-tasting products made with familiar `real food’ ingredients that consumers would find in their own cupboard — and they are available broadly in local natural and grocery supermarkets. The halo benefits of brand recognition add to the luster.”
Napa Valley Kitchens’ Consorzio 10-minute marinades, flavored olive oils and salad dressings were created by noted chef, author and PBS cooking show host Michael Chiarello. Fantastic Foods was started by founder Jim Rosen’s pioneering achievements in creating natural vegetarian meals-in-a-cup and boxed side dishes and entrees. Annie’s Homegrown totally natural macaroni and cheese products, with their whimsical Bernie the rabbit logo, are among the best selling products for natural food retailers.
“There’s a strong commitment at Homegrown to maintain the vegetarian heritage of the Fantastic Foods brand,” said Founder Jim Rosen. “In addition, Homegrown will provide the energy to grow the brand through innovative new products and creative marketing approaches.”
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By GlobalDataFollowing the closing of these transactions, Homegrown’s investors will include: Trefoil Capital Investors and Shamrock Capital Advisors, Inc., an affiliate of Shamrock Holdings of Los Angeles and Rosewood Venture Group of San Francisco. Bill Benford, a Managing Director of Shamrock said today, “Trefoil Capital Investors and Shamrock Capital Advisors are very happy to be participating with Homegrown in the future growth of Fantastic Foods, Consorzio and Annie’s brands.”
Tucker Anthony is advising Homegrown and US Bancorp Piper Jaffray is advising Fantastic Foods in this transaction.
Homegrown Natural Foods, Inc., was founded by John Foraker and E. Michael Moone in 1999 as a platform to purchase, consolidate and grow high quality, branded companies in the natural foods industry. Homegrown’s subsidiaries develop, market and sell branded natural food products to specialty foods, natural foods, supermarkets, and club stores. For more information, please call 888/254-3711 or visit the Homegrown Natural Foods Web site at www.homegrownnaturalfoods.com.
