• by Karlene Lukovitz  @KLmarketdaily, June 9, 2015

In another manifestation of large consumer product goods companies’ strategic shift toward aligning with consumers’ demand for fresher, less processed foods, Campbell Soup Company announced that it will acquire Garden Fresh Gourmet Inc. for $231 million.

The deal requires regulatory approval, but Campbell said it expects it to close within a few weeks.

Michigan-based Garden Fresh, which makes salsa, hummus, dips and tortilla chips, was founded by Jack and Annette Aronson in 1998. The company’s net sales reached $100 million in 2014, and its salsa has become the best-selling refrigerated brand, according to IRI. That growth was achieved with largely regional distribution, and Campbell said that it will use its packaged fresh production and distribution, sales and brand-building capabilities to build Garden Fresh into a national brand.

“The acquisition of Garden Fresh Gourmet is another milestone in reshaping our portfolio toward faster-growing categories, including packaged fresh and organic foods,” Campbell CEO Denise Morrison summed up in announcing the deal.

The acquisition will expand Campbell Fresh, one of three product-category-driven divisions the company created in an early 2015 reorganization. Bolthouse Farms, the fresh carrots, salad dressings and juices company that Campbell acquired in 2012, is also part of the fresh division, and Garden Fresh will leverage Bolthouse’s refrigerated platform, Campbell said.

Campbell’s’ recently launched 1915 line of premium, cold-pressed organic juices, as well as Campbell’s retail refrigerated soups (sold in deli departments), are also in the fresh division.

Garden Fresh will allow the division to expand in grocery stores’ deli sections and enhance Campbell’s presence in stores’ rapidly expanding produce sections, noted Jeff Dunn, president of Campbell Fresh. With the addition of Garden Fresh, the division’s annual net sales will exceed $1 billion.

Along with its reorganization, Campbell implemented a cost-cutting plan and zero-based budgeting to support what Morrison describes as a “shift in the company’s center of strategy.”

Campbell cited IRI data showing that packaged fresh foods sales grew 4.9% in the 52 weeks ended May 10, 2015.

According to Credit Suisse, overall packaged food and beverage sales fell 1.8% last year, and Campbell told analysts in late May that it expects its fiscal 2015 sales to come in at the lower end of its guidance of a 1% decline to 1% a increase, reported The Wall Street Journal.

Other big CPG food companies are also pushing to reinvent their portfolios by developing or acquiring fresh packaged brands. One notable example was General Mills’ acquisition of Annie’s, the maker of convenient organic meals and snacks, for $820 million last year.