General Mills Enters Strategic Organic Dairy Partnership | Global AgInvesting

General Mills Enters Strategic Organic Dairy Partnership

General Mills Enters Strategic Organic Dairy Partnership

Pursuant to its plan to double organic acreage to 250,000 acres and to increase organic food sales from $675 million to $1 billion by 2019, General Mills has entered into a strategic partnership with the largest dairy cooperative in the U.S., Organic Valley.

The agreement will foster the conversion of more farmland, helping about 20 farms add approximately 3,000 acres to organic dairy production within the next three years, and will specifically boost the production of yogurt for General Mills, according to the Star Tribune.

“To ensure we are able to deliver great tasting organic yogurt offerings to our consumers we are committed to supporting a framework in partnership with Organic Valley that will not only ensure a consistent supply chain, but also make it easier for dairy farmers to successfully manage through the transition to organic,” said David Clark, president of the General Mills Yogurt Operating Unit in a company statement.

The organic and natural food segment is expected to see sales growth in the double digits over the next five years. Understanding this, since 2000, General Mills has made a series of investments to build a portfolio of natural and organic brands with a total value of $675 million, including Cascadian Farm, Muir Glen, Mountain High, Food Should Taste Good, Liberté, Annie’s, and Immaculate Baking, making the company the third largest natural and organic food company in the U.S. However, organic acreage accounts for approximately 1% of total agricultural acreage in the U.S. according to the U.S. Department of Agriculture (USDA), representing a land base that is not equal to the task of keeping pace with intensifying consumer demand for organic foods. And despite these investments, or because of them, John Church, executive vice president, General Mills Supply Chain noted, “To achieve the growth we anticipate for our natural and organic brands, we will need a more robust pipeline of organic growers.”

In addition to entering this strategic organic supply partnership, General Mills announced it will launch the Organic & Regenerative Agriculture Transition Council which will act to connect farmers, industry investors, and sustainable agricultural leaders through a platform targeting the advancement of organic and regenerative production methods. The council will initially focus on the dairy sector.