Campbell Soup Co. has struck a surprise deal to buy US baby food business Plum Organics.
The acquisition, for an undisclosed sum, marks Campbell’s entry into the organic baby food sector, a market proving attractive to larger food manufacturers.
From Plum Organics’ perspective, the decision to sell is unexpected; only in January, it snapped up unrelated UK peer Plum UK.
In an interview with just-food, Plum Organics CEO Neil Grimmer talked of the business being “a challenger brand” to competitors like Nestle’s Gerber and Hero Group’s Beech-Nut. Grimmer and Plum UK boss Scott Wotherspoon spoke of they planned to grow the combined company on both sides of the Atlantic.
Speaking after the agreement with Campbell was announced, Grimmer said: “Joining the Campbell family will allow us to amplify our mission to reach even more little ones on a global scale. We look forward to building an exciting future together.”
Grimmer will join Campbell; the soup manufacturer plans to run Plum as a stand-alone business.
Plum Organics was owned by a number of investors, including US private-equity firm Catterton Partners and UK-based Darwin Private Equity. Plum UK was owned by Darwin Private Equity and recived shares in the combined business when Plum Organics bought its UK peer earlier this year.
Campbell said the acquisition was part of a plan to expand into more buoyant categories and markets.
Around US$2bn of baby food is sold in the US, Campbell said. Between 2010 and 2012, Campbell said the “premium and organic segments grew at at an average annual rate of 43%.
Campbell president and CEO Denise Morrison said: “The acquisition will help deliver on our dual mandate to strengthen our core businesses and to expand into faster-growing categories and adjacencies. It represents another step toward our long-term goal of shifting Campbell’s center of gravity.”
Last week, Danone, a major player in infant formula and conventional baby food, entered the organic category with the acquisition of US firm Happy Family.
Last month, Hain Celestial, which already owns the Earth’s Best range of organic baby and kids food, agreed to buy UK business Ella’s Kitchen.
Click here to read just-food’s January interview with Plum Organics and Plum UK after they announced their deal.