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Annie’s Adorable IPO

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As natural and organic foods continue to accelerate out of the recession, investment interest is heating up. Whole FoodsHain Celestial and United Natural Foods — three companies that are financial bellwethers of the movement — all saw double-digit growth in recent quarters (UNFI actually saw income drop recently due to restructuring), earning “buy” ratings from industry analysts who saw the companies perform above expectations.


Given this financial climate, it should be no surprise to see an organic bunny hop onto the trading floor. Annie’s, the Berkeley, Calif.-based maker of organic mac and cheese, fruit snacks and “bunny grahams”, filed papers to raise $100 million in an initial public offering, with plans for its symbol on the New York Stock Exchange to read BNNY.


According to the filing, Annie’s has seen 15% annual growth over the past four years and expects to grow 8% yearly up through 2013. What’s interesting is that the company bases its growth predictions on increased availability and interest in whole health products at mainstream food stores as opposed to natural stores. This narrative isn’t a new one in the industry, but it’s become trickier post-recession because mainstream consumers remain price-sensitive even as they demand quality and purity from their products.


That’s why Annie’s outlined a business plan that includes “stay true to our values” as well as invest in an infrastructure that will allow it to compete with national brands. As the company notes in the filing:


We actively seek opportunities to invest in the specific capabilities of our supply chain partners to reduce costs, increase manufacturing efficiencies and improve quality.


This is consistent with our recent industry poll, where respondents told us that natural and organic companies are becoming smarter, more efficient operations. Indeed, there’s the distinct impression that the whole health industry has grown up, faced some hard truths and emerged a stronger entity for it. It’ll be interesting to follow Annie’s along with retailers and manufacturers in the coming months to see how they hone their go-to-market strategies.


It’s also notable that Annie’s has gotten this far without selling to a larger company, as many popular natural and organic brands have. Perhaps there’s room for truly organic growth in the industry, after all.

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