In an effort to expand its organic offerings, the iconic Campbell Soup Company has entered into an agreement to purchase natural food brand Pacific Foods. Campbell’s will pay $700 million to acquire the Oregon-based organic food producer in an all-cash deal.
Pacific Foods’ full range of natural and organic products – from soups and sauces to non-dairy beverages and dips – are sold in both health food and major grocery stores across the US and Canada. The company has generated $218 million in net sales in the 12-month period ending on May 31, 2017.
“This acquisition is consistent with our purpose, ‘Real food that matters for life’s moments,’” said Denise Morrison, Campbell’s President and Chief Executive Officer. “The acquisition allows us to expand into faster-growing spaces such as organic and functional food.”
The organic food sector is a rapidly-expanding category in the US worth $11 billion. While Campbell’s already sells its own line of organic soups and broths, Pacific Foods will add additional products to that portfolio, including organic beans and oatmeal.
Campbell is preparing to use its expertise and experience to add significant value to Pacific Foods. In addition to boosting distribution and increasing marketing efforts, the company will invest in R&D to develop new organic food products.
“We’ve spent the past 30 years focused on making nourishing foods with an emphasis on simple, organic ingredients and authentic, rich flavors,” said CEO and co-founder of Pacific Foods, Chuck Eggert. Looking ahead, a future with Campbell means we can maintain what we value while accelerating growth of the brand in a way that we couldn’t do alone, reaching more people while increasing our impact on sustainable agriculture.”
Pacific Foods will become the latest addition to Campbell’s Americas Simple Meals and Beverages division, which is led by President Mark Alexander. Other brands in this category include V8, Swanson, Prego, Pace and Plum Organics.
In the past five years, Campbell has acquired a total of five food companies to increase its offerings in the health food space. Bolthouse Farms, a smoothie company, was acquired by Campbell in 2012, followed by Plum and Kelsen in 2013, and Garden Fresh Gourmet in 2015.