May 6, 2019

Danone has sold Earthbound Farm, the largest organic salad business in the U.S. to California-based, and family-owned Taylor Farms. Financial details of the deal were not released, however, estimations put forth last year predicted that the sale could generate as much as $500 million.

The sale, which was closed on April 11, was undertaken by Danone as part of its portfolio management and capital allocation optimization strategy, according to a statement made by the company.

Founded in California in 1984, Earthbound Farm saw sales in 2018 of approximately $400 million from the sale of its organic salads. As of 2013 the company had been owned by WhiteWave Foods (a 2012 spin-off of Dean Foods), which acquired Earthbound for $600 million.

Three years later, it was acquired by Danone when Danone made a bold move into the organic food space when it agreed to acquire WhiteWave in a deal that valued that company at $10 billion.

“This unique combination positions us better to address tomorrow’s consumer trends and represents a great opportunity to step change the ambition of our plan for an Alimentation revolution and to accelerate our path towards strong sustainable and profitable growth by 2020,” said Emmanuel Faber, chief executive of Danone, in 2016. “It will allow us to enhance Danone’s growth profile and reinforce our resilience through a broader platform in North America.”

In more recent years, Danone has been looking to divest its fresh food business as it has done with certain beer, cookies, pasta, and beer brands in its holding, allowing the company to focus on its core business centered on plant-based nutrition, yogurt, and water.

For Taylor Farms, already a producer of salads and fresh foods, the deal will bring Earthbound Farms back to a family-owned structure, where it will join its Taylor Farms Retail Group and “help lead growth in the dynamic organic fresh produce category,” according to a statement made by Taylor Farms.

The sale of Earthbound Farm echoes another very recent divestment carried out in mid-April, when Campbell Soup sold its Bolthouse Farms brand to Butterfly Equity for $510 million.

Headquartered in Bakersfield and Santa Monica, California, Bolthouse operates facilities in Hodgkins, Illinois, Wheatley, Ontario, and Prosser, Washington, producing smoothies, carrots, juices, and dressings.

Campbell Soup also has been looking to divest its entire Fresh division, a goal accomplished with the sale of Bolthouse. This is following the sale of Garden Fresh Gourmet, a maker of salsa, hummus, dips, and prepared salads, in February of this year to an affiliate of Fountain of Health USA, and the sale of its refrigerated soup plant located in Everett, Washington.
After seven years of ownership, a product recall, and having written down its Fresh Division four times since 2016, the divestiture will free up Campbell Soup to streamline its focus on its more profitable Campbell Meals and Beverages and Campbell Snacks division.