General Mills will roll out Annie’s branded organic cereals this spring, the latest new product line to be sold under the Annie’s brand.
Well, new for General Mills at least. Before Annie’s was acquired by the packaged food giant, it had a line of cereals for five years that was discontinued in 2012.
This time around will be different, and General Mills’ cereal manufacturing capabilities are one reason why, Annie’s President John Foraker wrote in a blog post Tuesday.
General Mills bought Annie’s in 2014 for $820 million, a key acquisition given Annie’s strong presence in the growing natural and organic food business. Annie’s is best known for its mac and cheese and snacks such as Cheddar Bunnies crackers. New product lines were anticipated from the deal’s inception.
Three Annie’s cereals will hit the grocery stores: Frosted Oat Flakes, Berry Bunnies and Cocoa Bunnies, General Mills said Tuesday. They will be available at Whole Foods in early April, and are scheduled for distribution through all grocery channels by the summer.
Earlier this year, General Mills debuted an Annie’s yogurt for kids, while last year it launched a line of soups under the Annie’s name.
Annie’s, based in Berkeley, Calif., operates as a separate arm of General Mills, which is based in Golden Valley. When it was an independent firm, Annie’s came out with three flavors of cereal in 2007. “Ultimately, the business did not take off because we missed the mark on the product and the consumer,” Foraker wrote.
Part of the problem was that Annie’s was a small company with “limited manufacturing choices.” The result was cereal with a “taste and texture that was not quite where it needed to be to win,” Foraker wrote.
Annie’s new product lines attempt to capitalize on General Mills’ core production capabilities. The company dominates the U.S. cereal market along with Kellogg. Ditto for soup, where General Mills’ Progresso brand goes head-to-head with Campbell. With its Yoplait brand, General Mills is one of the nation’s largest yogurt makers.
General Mills announced the new cereals at the annual conference of the Consumer Analyst Group of New York, which is held in Boca Raton, Fla.
Jeff Harmening, head of General Mills’ U.S. retail business, told analysts the company’s gambit on gluten-free Cheerios — which ramped up last fall — has been paying off. Sales of gluten-free varieties of Cheerios have risen for the past five months compared to sales a year ago, he said. The year-over-year growth rate was 5 percent in January, up from 4 percent in December and 2 percent in September.