Sales at Annie’s Homegrown are hopping.

The company, an organic food brand owned by General Mills, is known for its macaroni and cheese and bunny-rabbit brand icon based on the founder’s pet rabbit.

A pioneer in the processed organic food sector, Annie’s represents a market that is rapidly expanding with unfolding opportunities for farmers producing dairy, wheat, eggs and meat.

The company was co-founded by Annie Withey and Andrew Martin in 1989. When Withey started, she sold boxes of homemade mac and cheese from her car trunk.

“Annie started really scrappy, but with a very big vision,” said Christina Skonberg, sustainability lead for General Mills’ natural and organic sector.

Annie’s went public in 2012 and was acquired by General Mills in 2014. Today, it produces about 300 products.

Skonberg said Annie’s buys about 80 million pounds of certified organic ingredients annually and sources from around 70,000 acres of U.S. farmland, including on the West Coast.

In general, the organic food industry has been growing at a spectacular pace. In 2018, data show worldwide sales of organics reached $95 billion, a 600% increase since 2000.

But early growth was mainly in non-processed, whole organic foods such as fruits and vegetables. Fresh produce still accounts for 40% of organic food purchases in the U.S., according to USDA.

For decades, studies showed consumers didn’t necessarily view processed organics as more healthful than conventional counterparts because they contain additives.

Traditionally, according to Marilia Prada, a social psychologist, whole foods have been the “entry point” into the organic market, and for many consumers, the stopping point.

But that is changing.

Researchers now say the biggest area of growth appears to be in organic processed foods, presenting opportunities for farmers producing commodities other than fresh market fruits and vegetables.

Part of the shift, researchers speculate, can be attributed to companies like Annie’s elevating the organic message.

Organic farming groups say big food brands give opportunities for organic farms to have contracts and scale up production.

Many organic farms, experts say, are small, feeding into local and regional supply chains like farmers markets. Companies like Annie’s provide bigger opportunities for contracts and volume. For example, Annie’s contracts with Organic Valley, a national organic dairy cooperative.

Skonberg of General Mills said Annie’s usually works indirectly with farmers through co-ops and vendors, but the company has recently started partnering directly with two farmers to test what it’s like to work directly with a farm.

“I’m really excited about this project,” said Skonberg.

Annie’s has also helped farmers convert conventional farmland to organic — for example, by helping South Dakota farm Gunsmoke Farms LLC transition 34,000 acres to organic.

The company also provides educational resources to farms and is exploring ways to financially incentivize farmers to sequester carbon.

Although Annie’s is open to working with new co-ops, the company already has most suppliers secured. But experts say the growing market in processed organics holds many opportunities.

A grocery buyer for the organic sector told the Capital Press farms and co-ops wanting to get in on the action should look for grants or investors to help scale up production and should contact food companies to partner with.

Products:

• mac and cheese
• dressings and condiments
• cereal
• snacks
• baking goods
• pre-made meals
• special diets

See a complete list of products here: https://www.annies.com/products/