“There is an Annie, and she was actually planning to sell her stake,” says Molly Ashby, chairman of organic snack food company Annie’s Inc. (NYSE: BNNY).
For Solera Capital LLC, a New York private equity firm that Ashby founded, it was ideal that Annie’s co-founder Annie Withey retain a stake in the company, said Asbhy at a fireside chat conducted by Mergers & Acquisitions editor-in-chief Mary Kathleen Flynn at an ACG New York Women of Leadership (WOL) event on Sept. 26 at the Harmonie Club. The event was the first in ACG NY WOL’s new series of talks with entrepreneurs.
“I knew we would do well with it, and she deserved it,” Ashby says. “We really care about authentic and the real thing, and she’s authentic and real.” Withey and her family live on an organic farm, Ashby says.
Back in 2002, when Solera invested in Annie’s, the PE firm had been considering opportunities in the rising natural and organic sector and had become convinced that it was a huge growth space, recalled Ashby.
“When you looked at a lot of the brands in that space, they had good penetration in Whole Foods, and in the natural channel, but really small penetration in mainstream grocery,” says Ashby.
If Solera was right, and the natural and organic trend was non-reversible, Annie’s could experience explosive growth with new distribution points.
With its convenient kit approach and charming packaging, including a note from Withey on the box, Annie’s became known for bringing healthy, convenient food, starting with just macaroni and cheese, to families. Today, the company is in about 10 categories, according to Ashby.
“It’s the kind of brand that had that passion among its followers then that it does today,” Ashby says.
“If you’re true to your consumer, that mom will trust you, so when you come up with the next thing, she will trust you and she will follow you, but you can’t screw up,” Ashby says.
Annie’s, like many companies in the food business, hasn’t had a bump-free road. Earlier this year, the Berkeley, Calif. company recalled some of its frozen pizza products. But its approach to problems has been to tackle them head on.
Building the trust of its customers over the years paid off well for Withey and Solera in 2012, when Annie’s enjoyed one of the most successful initial public offerings in recent history. The company’s stock soared 89 percent to more than $35 on its first day of public trading on March 28, 2012.
The day the company went public, Ashby and Withey went to ring the bell at the New York Stock Exchange.
“It was everything we told her we would deliver, and we did,” Ashby says. These days, Annie’s stock is trading at more than $48 per share.