General Mills Purchases Small Planet Foods

SEDRO WOOLLEY, Wash.-General Mills in mid-December announced an agreement to purchase Small Planet Foods and its Cascadian Farms and Muir Glen brands. Fantastic Foods, which was part of the Small Planet group, is not part of the deal and will continue to be held by Trefoil Capital Investors. Small Planet Foods was formed after a group of acquisitions by the investment partnership, which is managed by the senior executives of Shamrock Holdings Inc. According to Gene Kahn, CEO of Small Planet, General Mills and Trefoil have been in discussion for more than a year on the acquisition.

Financial terms were not disclosed, through combined annual sales for the Cascadian and Muir Glen lines is approximately $60 million. Small Planet will be run as a subsidiary of General Mills and headed up by Kahn, who will also be a vice president for General Mills. Kahn will work with Chris Shea, president of General Mills New Ventures, to develop new products and educate the company on the organic market. "We look forward to leveraging the expertise of General Mills in product quality, distribution channels and costs, and consumer marketing," Kahn said. Shea added that the company will operate as an independent subsidiary, but that General Mills was looking to access deeper knowledge of organic foods, established relationships with the trade and distribution, and knowledge of the consumer demographic.

Larry Tsai, vice president of marketing and newly appointed general manager at Fantastic Foods, will now oversee all operations, including marketing, distribution, manufacturing, R&D and quality processes, which will all be housed in Petaluma, Calif. Tsai anticipates a "renewed commitment" from Shamrock in the brand. "We are a leading vegetarian, natural and, increasingly, organic brand," he said. He added that the investment company is always looking for ways to increase the value of its holdings, and so complementary portfolio acquisitions remain a strong possibility.