WhiteWave Foods acquires Earthbound Farm

What might the future hold following WhiteWave's acquisition of organic produce manufacturer, Earthbound Farm?

On Monday, two natural industry titans joined forces. WhiteWave Foods, the largest non-dairy organic brand in the United States acquired Earthbound Farm, leading purveyor of organic produce in North America, for $600 million.

Known for its involvement in the non-GMO movement, the Colorado-based WhiteWave Foods already owns popular natural brands including Silk and Horizon Organic.

The 1984-founded Earthbound Farm enjoys a leading position in the produce aisle, particularly with organic packaged salads like baby kale, arugula and spinach, which occupy a 45 percent total market share. Earthbound has also extended its product line beyond produce with dried fruits and snacks, and frozen items.

Among other qualities, WhiteWave found Earthbound's market saturation appealing. “Earthbound Farm is an outstanding organization well-known for innovation, freshness, organic stewardship and food safety. It is a natural extension of our business that reaffirms WhiteWave’s leadership in the organic foods and beverages industry in North America,” said Gregg Engles, chairman and chief executive officer of WhiteWave, in a statement. “Fresh foods are one of the most attractive, emerging trends in the food industry today and the market for organic products continues to grow steadily.”

Engles also noted that WhiteWave and Earthbound share similar company cultures, which made the decision to partner easy. “We’re convinced our businesses are a great fit culturally, with a shared dedication to similar core mission and values,” he says.

Earthbound Farm Chief Executive Officer Charles Sweat agrees. “Both companies have a heritage nurtured from small beginnings. And both companies believe in the importance of scaling the production of better food that makes for healthier people and a healthier planet,” he says.

Integrity maintained

Though some natural company mergers have hindered brand genuineness, Sweat has no fear that the acquisition will affect Earthbound Farm’s authenticity. “What's most important is that Earthbound Farm will continue to operate as a standalone business unit,” explains Sweat. The company is headquartered in San Juan Bautista, California. “No significant operational changes are anticipated at Earthbound Farm as a result of the acquisition,” states a press release.

We produce only organic food, and we will continue to do so in the future, Sweat continues.

Will the Earthbound Farm–WhiteWave partnership garner additional product development? It’s too early to know for sure. But both Engles and Sweat hint fresh-focused products that complement existing SKUs might be in the pipeline. “We do see opportunity in salad dressings, fresh soups and salsas,” says Sweat.

Earthbound’s widespread distribution is a prime platform to expand lines, as the company sells products in roughly 75 percent of national groceries including Whole Foods Market, Costco, and independent retailers, according to a conference call with WhiteWave Foods.

“This acquisition gives us a fantastic footprint to tackle those [new product] opportunities through the supply chain scale that Earthbound has already developed,” says Engles. "We think there’s tremendous opportunity to take this brand beyond just traditional produce offerings.”

TAGS: Regulatory
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