Larabar acquired by General Mills

Another one bites the dust! Yes, another independent (and successful) natural foods brand is acquired by a multinational food conglomerate. General Mills announced it would acquire Humm Foods, maker of Larabar and Larabar Jocalat. The Larabar brands will become part of the Small Planet Foods division of General Mills, which also manages the Cascadian Farm and Muir Glen brands.

Terms of the deal were not disclosed, but NBJ estimates Larabar's 2006 wholesale sales at $20 million. Click here for more NBJ figures on top nutrition brand sales.

It was reported that Lara Merriken, the founder of Larabar will continue on with General Mills as the brand champion, and no timeline was set for this arrangement. Recent history will show that founders of natural food companies who sell their brands to multinational food companies have a very difficult time staying on as brand champions post acquisition.

Steve Demos, founder of White Wave, threw up his hands under the thumb of Dean Foods.

Mark Retzloff, co-founder of Horizon Organic, moved on to launch a competitor - Aurora Organic Dairy.

Gary Hirschberg, founder of Stonyfield Farm, continues the struggle at Dannon.

Gary Erikson, founder of Clif Bar, left the table when negotiating the sale of his company to a multinational food company at the 11th hour because he worried about what would happen to 'his' company post-sale.

Lara virtually created the "raw bar" market with the launch of Larabar. She capitalized early on the growing trend of food simplicity. This simplicity trend is directly related to the rise of organic foods and it's a trend we're also seeing in the natural & organic personal care space. From within General Mills, Lara will have many opportunities to launch new "raw" products as extensions to Larabar...Larajuice...Larababy...but must tread wisely on the reputation of her brand.

Certainly the distribution power of General Mills will do much to help Larabar's expansion into the food, drug, mass merchandiser, convenience and club store channels, but it would be in her best interest to pay close attention to how the natural retail community reacts to this deal. Their displeasure with Larabar for "selling out" could result in a divorce from the brand, and undermine its growth prospects in the natural channel.

Only time will tell, but if the passions of the natural retailer channel can be successfully managed and Larabar can capitalize on the distribution reach of General Mills while launching smart brand extensions, this Larabar-General Mills deal might be a great acquisition by General Mills.

About Small Planet Foods:

Small Planet Foods is the natural and organic products group within General Mills. With its Cascadian Farm and Muir Glen brands, Small Planet Foods holds the No. 1 or No. 2 position in 14 major organic categories in the United States.

About General Mills:

General Mills is a leading global manufacturer and marketer of consumer food products based in Minneapolis, Minnesota. General Mills' mission is Nourishing Lives - innovating to make lives healthier, easier and richer. Its global brand portfolio includes Cheerios, Betty Crocker, Pillsbury, Green Giant, Häagen-Dazs, Nature Valley, Old El Paso, Cascadian Farm, Muir Glen, and more. General Mills is also a leading supplier of baking and other products to the foodservice and commercial baking industries. With more than 100 consumer brands and operations in more than 100 countries, General Mills had annual net sales of $12.4 billion in fiscal 2007.

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