You don’t have to look further than Amazon’s investment in Whole Foods to see that healthy and natural are more valuable buzzwords than sugary and processed these days. So what’s the new CEO of a breakfast cereal company like Kellogg to do? Apparently, spend $600 million to acquire RxBar, a protein bar company known for its no-BS ingredients list. In the face of flagging sales for processed products like Frosted Flakes and Pop-Tarts, Steven Callihane (who replaces recently departed John Bryant) pulled the trigger to acquire the RxBar in an effort to lend Kellogg some credibility in the natural foods space.
With the 25 biggest food companies losing billions in market share to smaller, leaner competitors, it’s no surprise Kellogg hasn’t been the only culinary conglomerate to move in a healthier direction via targeted acquisition. Campbell’s recently sunk $700 million into organic soup company Pacific Foods, while Conagra and General Mills muscled their way into the meat snack market by gobbling up no-additive jerky companies Duke’s and Epic Provisions, respectively.
After a difficult process surrounding Kashi’s integration into the Kellogg portfolio (which saw the brand move its headquarters to Michigan, only to return to Southern California a year later), the Chicago-based protein bar maker will likely maintain a certain degree of autonomy. “Kellogg learned some lessons with Kashi,” said RxBar co-founder and CEO Peter Rahal. “We won’t compromise our values.”
What RxBar will do, however, is tap into the enhanced distribution network and R&D budget that comes from operating under Kellogg’s wing. Rahal hopes that can allow his business to expand beyond protein bars, while also getting his healthy-minded product into more schools. Hopefully he doesn’t encounter too much B.S. along the way.