Campbell Soup Company
), the manufacturer of high-quality food and simple meals
recently announced the completion of the acquisition of Plum
Organics - a leading provider of premium organic baby food.
Though the company has not disclosed the financial details of the
transaction, according to its previous announcement, the
acquisition was funded with its available credit limit.
Last month, Campbell Soup entered into an agreement with Palm
Organics to acquire the latter. We believe that the acquisition
will enhance Campbell Soup's product categories and reach out to
a wider range of customers as well.
Campbell Soup followed the footsteps of
The Hain Celestial Group, Inc
), which had made a similar strategic move and acquired Ella's
Kitchen Group Limited, the manufacturer and distributor of
premium organic baby food in May 2013.
In the United States, the organic baby food segment is one of
the most flourishing food categories, having grown at an average
annual rate of 43% from 2010-2012. Currently, the segment is
anticipated to be worth $2 billion in the country.
Founded in 2007, Plum Organics ranks second in the organic
baby food category and fourth in the overall baby food category
in the United States. Since its inception, it has launched over
150 products for babies, toddlers and kids in the U.S. and the
Campbell Soup, which competes with
Flowers Foods, Inc
J&J Snack Foods Corporation
), intends to operate Plum Organics as a separate business under
its North American division. Moreover, the company expects its
kids-based soup, beverage and snacks annual sales to touch the $1
billion mark. During fiscal 2012, Plum Organics generated a total
revenue of $93 million.
Campbell Soup, which currently carries a Zacks Rank #2 (Buy)
intends to boost its top line and increase returns on investment
through strategic measures. During fiscal 2012, the company made
significant progress in this direction, including stabilization
of the North American soup and simple meal business, overseas
expansion, and growth of healthy beverages and baked snacks
business. We believe that Campbell Soup's prudent investment and
strategic initiatives toward product innovation and brand
building will expand its customer base and increase
CAMPBELL SOUP (CPB): Free Stock Analysis
FLOWERS FOODS (FLO): Free Stock Analysis
HAIN CELESTIAL (HAIN): Free Stock Analysis
J&J SNACK FOODS (JJSF): Free Stock Analysis
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