Campbell Soup Co., maker of canned soups and packaged cookies, is moving in a fresher and more healthful direction with its $1.55-billion purchase of Bakersfield, Calif.-based Bolthouse Farms.
Now approaching its 100th anniversary, Bolthouse was among the first to sell baby carrots and is also known for its refrigerated salad dressings and so-called super-premium juices.
The operation sells products under the Bolthouse Farms, Earthbound Farms and Green Giant brands and in the most recent fiscal year brought in sales of $689 million.
Monday’s deal, which is expected to close later this summer, will set up Bolthouse as a separate business unit under Campbell.
The Camden, N.J.-based giant hopes Bolthouse’s good-for-you offerings will help supplement its own portfolio of soups, V8 vegetable beverages, Prego Italian sauces and Pepperidge Farm cookies.
Campbell is trying to diversify as high production costs and continued inflation push up prices for its soups and tamp down its profits. The company has boosted its advertising and promotion efforts by 13% and plans to spend $100 million building its brand this year.
The acquisition will also give Campbell an entry into a fast-growing, $12 billion market for packaged fresh foods. The company also plans to use Bolthouse’s carrots to grab a larger share of the booming snack scene.
As healthful and organic foods become increasingly popular in the U.S., Bolthouse is far from the only purveyor in high demand. Shares of Berkeley-based organic food company Annie’s Inc. soared more than 70% within a few hours of their public debut this spring. Last year, the USDA projected that the number of farmers markets would double and that sales of locally produced foods would hit $7 billion.
PepsiCo recently struck a partnership with German dairy company Teho Muller to begin selling yogurt in the U.S. this month. Sales of Greek yogurt, popular with young women because of its healthful reputation, have soared 100% in each of the last three years. Even Ben & Jerry’s is getting in on the market.