Campbell Soup Co. has entered into an agreement to acquire the assets and business of Garden Fresh Gourmet for $231 million. Garden Fresh Gourmet is the No. 1 branded refrigerated salsa in the U.S. and also makes hummus, dips and tortilla chips.
Denise Morrison, Campbell’s president and chief executive officer, said, “The acquisition of Garden Fresh Gourmet is another milestone in reshaping our portfolio toward faster-growing categories, including packaged fresh and organic foods. Garden Fresh Gourmet’s on-trend products will provide Campbell with another growth engine to help us continue to shift our center of gravity.”
Garden Fresh Gourmet will become part of the Campbell Fresh division (formerly called Packaged Fresh), leveraging the Bolthouse Farms refrigerated fresh platform. Under Campbell’s new enterprise structure, the division will focus on building the company’s scale and accelerating growth in rapidly expanding packaged fresh categories across the retail perimeter. Packaged fresh foods represent a $19+ billion category that grew 4.9 percent in the past year, above the industry average.2 The division also includes the Bolthouse Farms portfolio of fresh carrots, super-premium refrigerated beverages, salad dressings and kids snacks, as well as the recently-launched 1915 brand of ultra-premium cold-pressed organic juices. It also includes Campbell’s retail refrigerated soups.
“Garden Fresh Gourmet will allow the Campbell Fresh division to expand in the deli section of the grocery store perimeter and will complement our strong presence in the produce section. It is a logical extension of our fresh food and beverage platform that resonates with today’s consumers. This is a critical next step in our journey to becoming the leader in the fast-growing packaged fresh category,” said Jeff Dunn, President–Campbell Fresh. “Garden Fresh Gourmet is an American success story, whose leadership has built a vibrant brand with a loyal following in faster-growing categories like refrigerated salsas and hummus. We will leverage our packaged fresh production and distribution, sales and brand-building capabilities to help Garden Fresh Gourmet become a national brand.”
Garden Fresh Gourmet generated $100 million in net sales for the year ended Dec. 31, 2014. With the addition of Garden Fresh Gourmet, the Campbell Fresh division will account for more than $1 billion in annual net sales.
Garden Fresh Gourmet was founded in 1998 when Jack and Annette Aronson made their first batch of salsa in a five-gallon bucket in the back of their restaurant and eventually started to package it for stores at the request of a local upscale grocer.
Jack Aronson, who will stay on as an adviser to the business, said, “We believe Campbell is the right company to take Garden Fresh Gourmet to the next level and introduce our great products to more customers and more consumers. I know Campbell is a fitting home for the Garden Fresh Gourmet family.”
Garden Fresh Gourmet has approximately 500 employees with headquarters based in Ferndale, Mich. The company also has operations in Grand Rapids, Mich.; Inkster, Mich.; and Detroit, Mich. Garden Fresh Gourmet will continue to operate out of Ferndale, and will be led by Todd Putman, General Manager–Garden Fresh, within the Campbell Fresh division.
Over the past several years, Campbell has added a trio of growth engines to its business by acquiring Bolthouse Farms in 2012, and organic baby-food company Plum and biscuit company Kelsen in 2013. This acquisition is the latest in a series of moves Campbell has made in response to increased consumer interest in fresh foods and health and well-being, first with Bolthouse Farms, followed by Plum and, shortly, Garden Fresh Gourmet.
Campbell plans to fund the acquisition with commercial paper. Campbell expects the transaction not to affect its previously announced fiscal 2015 guidance and to be slightly accretive beginning in fiscal 2016. The closing of the transaction is subject to regulatory approvals and customary closing conditions and is expected to occur in the fourth quarter of fiscal 2015.
Morgan Lewis & Bockius LLP acted as Campbell's legal counsel. Garden Fresh Gourmet was advised by UHY LLP, and Maddin, Hauser, Roth & Heller, P.C., acted as legal counsel.