Big Cereal Companies Invest in the Organic Space

By Lauren R. Hartman, Product Development Edtior

Jun 20, 2016

Kellogg Co.'s Kashi unit has purchased organic snack brand Pure Organic, while General Mills announced it's partnering with dairy farm Organic Valley.

The partnership by General Mills is one of its efforts to transfer conventional dairy farms to certified organic operations that will support its yogurt unit in the U.S., which includes brands like Yoplait, Annie's, Liberte and Mountain High.

Kellogg's decade-old Kashi brand, which manufactures nut bars, ancient grain bars and fruit and vegetable strips, has acquired Holland, Mich.-based Pure Organic, a maker of organic, vegan nutrition bars and fruit snacks, announced Veronica Bosgraaf (a.k.a. Veronica Lehman), creator of the Pure Bar, in a You Tube video on June 16. The Pure Bar company was started by Bosgraaf in her kitchen 10 years ago, when she made snacks for her six-year-old vegetarian daughter. Pure Bar's products are certified organic and free of gluten, soy and dairy. The brand offers fruit and nut bars, ancient grain bars and fruit and veggie strips made with simple ingredients.

"One of the reasons I knew Kashi was a great fit for Pure was because they fell in love with Pure for all the right reasons, the same reasons we love the brand," Bosgraaf says. "They appreciated the homegrown roots and the values we stand for and the effort that we put into making delicious organic products. I’m so excited to join their team and work with them to continue to build the Pure Organic brand."

Kashi operates out of Southern California, where the Pure Bars are manufactured. The Solana Beach, Calif.-based company also owns the Bear Naked Granola and Stretch Island Fruit Co. brands.

Meanwhile, General Mills has announced a strategic sourcing partnership with the largest organic co-op in the country. The program with Wisconsin-based Organic Valley, considered America’s largest co-op of organic farmers and one of the nation’s leading organic brands, will help about 20 fairy farms add approximately 3,000 acres to organic dairy production over the next three years. It will also drive more acres in the country into the organic certification process, extending General Mills' commitment to double the organic acreage from which it source ingredients by 2019, the company reports.

Now the number-three maker of natural and organic foods, General Mills has nine brands including Muir Glen, Larabar, Cascadian Farm, Liberté, Mountain High, Food Should Taste Good, Immaculate Baking, Annie's and Epic Provisions. The company is transitioning its Liberté yogurt brand in the U.S. to USDA-certified organic, which will roll out nationally this summer.

“To ensure we are able to deliver great tasting organic yogurt offerings to our consumers we are committed to supporting a framework in partnership with Organic Valley that will not only ensure a consistent supply chain, but also make it easier for dairy farmers to successfully manage through the transition to organic,” said David Clark, president of the General Mills yogurt operating unit.

Demand for organic food is increasing, but the supply hasn't been able to keep up. In the U.S., acreage devoted to organic agriculture is about one percent of total cropland, according to the USDA. General Mills says it has made sizable investments to meet growing consumer interest in natural and organic foods, which is expected to drive double-digit industry sales growth over the next five years.

Since 2009, General Mills has increased the organic acreage it supports by 120 percent, and says it's now among the top five organic ingredient purchasers — and the second largest buyer of organic fruits and vegetables — in the North American packaged food sector.

General Mills will also launch the Organic & Regenerative Agriculture Transition Council, which will gather sustainable agricultural leaders with farmers and industry stakeholders in hopes of advancing organic and regenerative agriculture practices. The first project will focus on dairy.

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