General Mills, Inc. (NYSE:GIS) disclosed today that it would speed up its plan to double the acreage sourcing for its organic food line. As a result, the company expects to meet the objective of 250,000 acres before the year 2019. The move is also aligned with its objective of achieving growth of net sales from its organic products. It has set a target of $1 billion in net sales by the turn of 2019, which has been advanced by a year from its earlier target of 2020.
Significant Jump In Acreage
General Mills has achieved a significant increase in organic acreage of 120% since 2009. It was one of the top five buyers of organic ingredients and the second biggest purchaser of organic vegetables and fruits in North America’s packaged food division. The company has participated in an organic companies’ forums including the Organic Trade Association’s Grain, Pulse and Oilseed Council. Their focus has been to boost the supply of these organic ingredients in order to increase output.
The food maker has increased its natural and organic brands portfolio since 2000, raking in net sales of $675 million on a pro forma basis in the last fiscal year. That ranks General Mills as the third largest organic and natural food manufacturer in America. Its portfolio includs Immaculate Baking, Mountain High, LARABAR, Food Should Taste Good, Liberte, Muir Glen, and Cascadian Farm. January, the company purchased EPIC Provisions, engaged in meat snack making.
Establishing Tactical Relations With Farmers
General Mills Executive Vice President of Supply Chain John Church, said that the company is establishing a tactical alliance with farmers directly for its products. He said that the company is keen on working with growers to maximize production and quality.
Church said that the company needs a strong pipeline of organic growers so that it would be able to achieve the expected growth in its natural and organic brands. General Mills has been making big investments to fuel double-digit industry sales growth in this sector in the next five years.