Maybe you remember the 1987 movie, Baby Boom, about “tiger lady” J.C. Wiatt, businesswoman who becomes guardian to her toddler niece and starts an organic baby food business to support them. She then turns down a multi-million dollar buyout to keep the business at home. Cute movie, but the point is, since then organic baby food is now a multi-billion dollar business.
The biggest player has been The Hain Celestial Group, Inc. (NASDAQ:HAIN) with its Earth’s Best organic baby food. Well I remember feeding it to my kids as the only organic option available.
Of course, there are small privately held start-ups like Sprout organic baby food with recipes by celebrity chef Tyler Florence. One toddler meal features chickpeas, tomatoes, beef and cumin!
Also in the mix is Annies Inc (NYSE:BNNY) which offers organic toddler snacks like graham and cheese crackers and their famous bunny shaped mac n’ cheese. It has recently expanded into frozen pizzas. A baby food company like Sprout would be a very nice acquisition for them.
Just this month Campbell Soup Company (NYSE:CPB) bought Plum Organics, number two in the organic baby food world. Check out the product line for Plum Organics. This is really a one fell swoop buy for them as it covers baby foods to snacks, challenging General Mills, Inc. (NYSE:GIS) and Mondelez International Inc (NASDAQ:MDLZ) with their own version of fruit leathers, yogurt dippers, and graham type snacks.
Like these other baby food brands, Plum Organics offers GMO free, certified organic baby food in pouches, exactly what the crunchy mama ordered with nutrient rich ingredients like pomegranate, butternut squash, kale, quinoa, amaranth, and acai berries.
This dovetails nicely with the Campbell Soup Company (NYSE:CPB) acquisition of organic vegetable, salad dressing, and juice company Bolthouse Farms (for $1.55 billion) and their V8 line of fruit/vegetable juices, smoothies, and energy drinks. Plum Organics, with 2012 revenue of $93 million, should generate exponentially better numbers under Campbell Soup ownership.
I have liked Campbell Soup since new CEO Denise Morrison discussed last July at their Analyst Day the importance of attracting Millennials. She had a full plate coming into the job with the 145-year-old company’s quaint image needing a serious makeover. You know most of their products: Pace salsa, Prego spaghetti sauce, Pepperidge Farm, Swanson broths, V-8 products, and Campbell’s soup.
She added more “foodie” type soup offerings, like gourmet bisques, in on-the-go packaging to attract those Millennials and vowed to aggressively ramp up their social media presence. She increased spending on R&D and ‘innovation teams’ to improve their strongest selling products and giving Campbell Soup Company (NYSE:CPB)’s a younger feel with 41 new products in 2012.
And now she has taken it to its logical extension: the Millennials’ babies. A point she made at that same Analyst Day was that they had developed more sophisticated palates than their Boomer parents. Therefore, they expect more of a baby food than strained peas.