NOSHscape: The Latest Food Brand News

Carla Vernón Departs General Mills

Annie’s needs a new head bunny: senior executive Carla Vernón has left General Mills, where she led the organic brand and the rest of the company’s natural and organic division.

In an email to NOSH, Vernón said that she will look back on her time at General Mills fondly.

“I chose to leave General Mills because I am looking forward to trying some new things,” she said, calling her 22 years with the company “ a gift I treasure.”

Vernón first joined the company in 1998 as an associate marketing manager for Honey Nut Cheerios. She also held lead roles at Yoplait before rising to become VP and business unit director for snacks from 2015 to 2016. In the snack unit she oversaw a $1.5 billion portfolio of “portable wellness snacks” including Nature Valley bars, Fiber One snacks, Larabar, Fruit Snacks, and Cascadian Farm bars.

When longtime Annie’s CEO John Foraker left General Mills to run baby food startup Once Upon a Farm in summer 2017, Vernón was serving as VP of natural and organic growth acceleration, and was promoted to president of Annie’s and president of General Mills’ natural & organic operating unit.

In recent years, Vernón became an outspoken voice and champion for diversity within the food and beverage industry. In speaking engagements she routinely spoke to the need for a more diverse set of founders and leaders, both in order to reach a changing consumer base but also to inspire new patterns of thought. At times, Vernón even criticized the industry for engaging in unconscious bias, helping minority founders share their own stories of the microaggressions and stereotypes that they’ve faced.

During her time as president of natural & organic, a spokesperson for General Mills said, the company became the second largest branded natural and organic food producer in the U.S.. In recent years the group has helped lead the company’s efforts to develop new programs around regenerative agriculture, working to advance the supply chain within the U.S.

In 2019, General Mills committed to converting one million acres of farmland to regenerative agriculture practices.

Moving forward, Emily Thomas has been promoted to the new role of VP, managing director of natural and organic. The role of president will no longer exist. Thomas has been with General Mills since 2002, in recent years serving as business unit director for Pillsbury, as well as the business unit director for dry baking and meals, and as a brand manager for children’s cereals.

Thomas will oversee the Annie’s, Cascadian Farm and Muir Glen businesses. Meanwhile, meat snack brand Epic, which General Mills acquired in 2016, will be moved from the natural and organic operating unit to the snacks operating unit, reporting to Jeff Caswell, president of U.S. Snacks for General Mills.

Looking forward, Vernón said that she has “exciting new ventures” that she is working on, but for now, they remain confidential.

“I am energized about the path ahead. And, I look forward to sharing more soon,” Vernón said. “I have been sharing my favorite Oprah quote because I hope it will inspire others as it inspires me for the road ahead: ‘When the time comes to bet on yourself, I hope you will double down.’”

Three Twins Founder on Closing: ‘We Made the Wrong Bet’

Over a decade after it opened, the founder of organic ice cream company Three Twins announced in April that it was closing. Neal Gottlieb attributed the difficult decision to financial hardships resulting from a lack of growth and poor product choices.

Founded in 2005 as a single scoop shop in Northern California, Gottlieb — well known in natural products circles for his ice cream-themed clothes and participation on the show “Survivor” — began selling hand packed pints of ice cream into regional grocery stores the following year. In 2010 the company opened a factory in Petaluma and expanded distribution up and down the West Coast. A second factory in Wisconsin followed and the company grew into national distribution.

At its peak, Gottlieb said, the company sold its products in roughly 5,000 stores, had over 40 employees and was doing just north of $13 million in net sales. But costs and scale remained problems.

“Our margins were not high enough overall,” Gottlieb said. “Early on we grew very rapidly and the hope was that we would continue to grow to the point where those margins would make sense, cover overhead and make a fair amount of profit. But then we stopped growing and had increased margin pressures.”

The price of Three Twins’ flagship line was an issue from the start, he said. Originally, the company’s pints were priced at $5, an unsustainable figure without sufficient efficiencies of scale — which never came. However, Gottlieb noted, if moved any higher than that, the product would not have grown to the point it did.

In addition to margin issues, Gottlieb also said the company made a series of poor product decisions.

In 2017, chasing the success of low-calorie frozen dessert Halo Top, the company launched Slim Twin, an organic ice cream alternative with 24 grams of protein and 240-320 calories per pint, depending on the SKU. While Gottlieb hoped the new line, which was priced similarly to its core products, would bring higher turns, the result was just the opposite. Retailers not only took existing Three Twins shelf space away for Slim Twin, but the line actually saw slower turns than the company’s core offerings.

In 2017, Three Twins also launched a second sub-brand, Maxines, consisting of larger 1.5 quart tubs of organic ice cream. Priced at $6.99 to $7.99, Maxine’s was designed to offer consumers a lower priced alternative, but Gottlieb said the turns and customer response weren’t as expected.

“We ran into trouble with that because we thought it would be incremental volume, but it wound up being a lot of cannibalization,” Gottlieb said. “If we had known what the volume was going to be at, we would have launched it at a higher price point, but we made the wrong bet.”

KRAVE Returns Home With Sale to Sebastiani’s Sonoma Brands

Maybe the old saying is wrong: You can go home again. Sonoma Brands, the holding company and investment group for snack brands started by Jon Sebastiani, announced this month the acquisition of KRAVE, the artisanal jerky and meat snack brand Sebastiani built and subsequently sold to The Hershey Company in 2015.

Terms of the deal were not disclosed, but Sebastiani said the purchase price was less than the $220 million he sold the company for five years ago. Moving forward, KRAVE will exist under a new holding company called Double Peak, with Sonoma Brands managing director Kevin Murphy serving as executive chairman.

Sebastiani said he sees an opportunity to reinvigorate the brand, which has struggled under Hershey’s ownership, and eventually pursue a second sale.

2015 may have only been five years ago, but much has changed in that time — especially in the meat snack set. At its launch, KRAVE was one of the first — if not the first – premium jerky brands. But now store shelves, across retails channels, have been inundated with new meat snack brands. Many of these offerings, in part spurred by KRAVE’s own exit, are private equity backed. Meanwhile, legacy brands have also launched or acquired their own premium or better for you options.

Sebastiani said he’s aware that the environment Sonoma Brands and KRAVE will face today has changed. Immediate plans include reducing sugar levels in some offerings, revising “stale” flavors to “reflect modernity” and updating messaging. Although KRAVE has always had a focus on emphasizing its wine country heritage and culinary roots, Sebastiani also wants to create a greater link between the brand and fitness.

But the competition element concerns him less. Sebastiani said he expects to see more consolidation in the category, with some brands folding. Under Double Peak, Sonoma may pursue the acquisition of other jerky bands with the goal of creating a stronger, larger supply chain that is more vertically integrated. And ultimately, he believes, the likely buyer for KRAVE will be an existing meat snacks producer who sees the value in increasing their own size and scale. Although Sebastiani expects to use a co-packer for KRAVE, rather than pursue building out a manufacturing facility as Country Archer has, he hinted that more robust “partnerships” may take the cost of production down, increasing margins.

According to flavor company FONA, Nielsen says the US market for meat snacks is now a $2.8 billion category with predictions for 4.2% annualized growth through 2022.

To capitalize on this, Sonoma Brands plans to first ramp up innovation. The most recent launch of plant-based jerky was a positive step in the right direction, Sebastiani said, with other plant-based options soon to follow. The ultimate goal is to have a protein-focused brand that moves beyond only animal-based items and can exist in multiple categories throughout the store.