Annie’s hopes microwavable cups build on recent new product success

by Eric Schroeder
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BERKELEY, CALIF. — As Annie’s readies for the launch of Macaroni & Cheese Microwavable Cups later this summer, the Berkeley-based natural and organic food company will look to garner the same positive response to the cups that it has from three recently introduced products: Cheddar Squares, organic graham crackers and Bernie’s Farm Macaroni & Cheese.

Annie’s Cheddar Squares are made without artificial flavors, synthetic colors and synthetic preservatives, and they contain certified-organic wheat and 6 grams of whole grains per serving.

“We’ve gotten a quick pick-up on (Cheddar Squares) in the natural channel,” John Foraker, chief executive officer, said during a June 10 conference call with analysts to discuss fiscal 2013 results. “We are getting them out into grocery retailers as well. On a dollar sales per point basis, they’re among the fastest turning items in the cracker segment for us. Not quite where the flagship Cheddar Bunnies items is yet, but pretty darn close. So we think there is a strong opportunity there. We are aging up, and appealing to a slightly older consumer who maybe doesn’t want to be seen taking a box of bunny crackers around the house.”

Meanwhile, the certified-organic graham crackers — available in honey and cinnamon varieties — have done “exactly what we expected,” Mr. Foraker said. The flat graham crackers are made with 8 grams of whole grains per serving.

“It was a category that we have quite a bit of equity in, and the conventional flat graham cracker category is mostly full of products that contain ingredients that many Annie’s-oriented consumers wouldn’t be pleased with,” he said. “We’ve now offered a certified-organic offering, and it is providing a lot of opportunities for consumers to trade up. In the natural channel, we are seeing very strong velocities on those items, particularly the honey item, which is going to be the best-selling item, and we are seeing velocities in those categories that are exceeding some of the velocities of our long-standing Bunny Graham items, which is great. It’s still early, but there is a lot of opportunity to build that out.”

Lastly, Mr. Foraker said Annie’s has received good distribution build in mass channels and in independent natural foods retailers for its Bernie’s Farm Macaroni & Cheese. Made with 100% cheese and featuring 8 grams of whole grains per serving, the certified-organic pasta is available in a variety of shapes featuring life on the farm.

“We’re getting a lot of positive comments from consumers,” Mr. Foraker said of the product line. “We don’t expect that that item will be in our top four or five s.k.u.s (stock-keeping units) in the category, but it is incremental and appeals to a household that has slightly younger kids that’s looking for that kind of experience — the fun, cute shapes.”

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