General Mills to Convert 34,000 Acres to Organic Wheat Production in a Smokin’ Hot Deal

When General Mills bought the beloved organic food company Annie’s Homegrown in 2014 for $820 million cash, many wondered what this would mean for the future of one of the organic food industry’s iconic brands.

When the deal went down, Jeff Harmening, the Chief Operating Officer for General Mills, told the New York Times that the acquisition “will accelerate the growth of our organic and natural foods business.”

But one customer wrote on Annie’s website, “Congrats Annie’s! You have just lost thousands of customers.”

John Foraker, the CEO of Annie’s in 2014, responded to the Times by saying that powerful consumer shifts are driving change and “Partnering with a company of General Mills’ scale and resources will strengthen our position at the forefront of this trend.”

On March 6, 2018, the Associated Press reported that General Mills and Annie’s has signed a deal to purchase organic wheat from Gunsmoke Farms near Pierre, South Dakota. And not just a truckload or two — 34,000 acres will be converted to organic wheat production, more than doubling organic grain production in the state.

This deal follows a pattern pioneered by General Mills years ago in Idaho, where the company used its purchasing power to trigger some of the nation’s first, large-scale conversions of conventional cropland to organic production within a food company’s dedicated supply chain.

We can thank the popularity of Annie’s organic mac and cheese for the conversion of 34,000 acres of wheat in South Dakota to organic production.

In a potential sign of bigger changes on the horizon, Gunsmoke Farms was recently bought by TPG, a San Francisco-based investment company, moving some of the newly generated wealth in the Golden State’s booming IT industry into the now, and forevermore, most valuable asset on the planet: soil.

TPG bought this massive farm from the R.D. Offutt Co., one of the nation’s largest producers of conventional potatoes. Farms managed by R.D. Offutt across the country are typically among the most pesticide-intensive in an area, and tend to make full use of the high-tech tools and inputs developed to support today’s large-scale, high-yield conventional farms.

But soon, Gunsmoke Farms will be managed in accord with a profoundly different set of agronomic and crop management principles, and its harvests will flow through a new supply chain, ending in packages of mac and cheese with a cute bunny on the box.

Sources:

Associated Press, March 6, 2018. “General Mills, Annie’s Mac & Cheese tap South Dakota farm.”

William Alden, September 8, 2014. “General Mills to Buy Annie’s for $820 Million in Cash,” New York Times.