By:
Editor’s note: John Foraker is the President of Annie’s, Inc. John joined Annie’s in 1999. He’s grown the business to more than $250MM in revenues and led its successful sale to General Mills in October 2014 for $820MM. Follow John on Twitter at @AnniesCEO.
How did we make this purpose driven business so successful? I have been thinking a lot recently about the things that I think are most responsible for our success over many years at Annie’s and that are absolutely critical for us to retain in our business model going forward as we integrate elements of Annie’s into General Mills. Lots of these are philosophies, but they are also supported and enabled by organizational design, business process, and in some limited cases, by our current systems. These are the keys to making Annie’s a billion dollar brand someday, and to driving amazing social impact we can all be proud of.
As you read these I hope you might find some lessons that can be useful in the development of your entrepreneurial business and brand.
These are in no particular order, because all of them are very important to the DNA of who we are:
Go-to-market strategy: The natural channel is the tip of the spear. We support that with a best in class sales organization focused on maintaining natural leadership, and leveraging that leadership across other retailers selling a disruptive brand that can attract the right consumers and drive growth and share in categories. We are willing to develop and test products in key channels and customers. One size definitely does not fit all. Our products are mainstream friendly and should be placed in regular aisles in most retailers, not in self-contained natural sections. Our supply chain is lined up to be fast and flexible to support the needs of these important relationships, to respond to fast emerging trends and customer needs, and to perform at a high level such that we can scorecard brilliantly at big retailers. We make decisions fast, we execute fast, and we respond to the needs of our consumers and retailers, like an entrepreneurial enterprise always does. That speed and decisiveness is a competitive advantage that we need to retain and even empower as we grow.
Innovation strategy, “modified” stage gate process and development mind-set: We leverage the knowledge of our people and their observations on emerging trends in real time, the opinions of our passionate consumers for key insights, and combine this with feedback from retailers using a consultative selling approach in order to decide which projects to focus on and do. We test some to be smarter, talk as a group to be smarter, however, neither so much as to induce paralysis, or to water down concepts with group-think to the lowest common denominator.
We develop with a strong point of view that matters. We lead, we do not follow. We use depth of brand knowledge and our instincts to drive fast decisions and we are not afraid to fail. We then apply all this learning to very fast cycle time product development, where speed is emphasized as a competitive advantage, and timelines are managed concurrently rather than end to end. We always focus a pipeline of big and important products on the cutting edge to keep natural cool and then adjust offerings to needs of channel and other retailers but never undermining brand promise or loyalty of our core consumers. We always maintain a strong commitment to Certified Organic. We leverage external co-packers to drive speed and expanded capabilities rather than limiting ourselves to existing fixed asset capabilities and limitations, even if that costs more, because it is flexible and fast. Fail fast and fail smart. Learn from it, celebrate it if we learn something and move on. Reward both success and smart failures.
Focus on corporate transparency in everything we do: It’s a crucial part of our brand promise: This requires a total commitment to corporate sustainability in daily operations and especially extended into our supply chain down to the farm. We invest the resources necessary to “lessen our bunny footprint” every year while score-carding our impact more fully and more accurately each year also, and then we communicate all of that, even and especially the stuff that we need to fix and improve. Part of this focus in supply chain involves aligning with the “best of the best” in authentic supply chain partners, even if they are more expensive on balance than other alternatives that do not operate at the same high standards for things such as worker treatment, sustainable farm economy, animal welfare, environmental impact, sustainability tracking and superior certifications for quality.
We know where our food comes from and we are comfortable shining a light on it and communicating that proudly to consumers in an authentic voice. This also includes an ongoing and growing commitment to corporate social responsibility, especially volunteerism and our important equity programs like school gardens, sustainable agriculture scholarships all which should grow in size and impact as we grow in size and impact.
Authentic, super-creative, personal, and honest marketing efforts leveraging best tools and tactics: We focus on fun and whimsical on-brand communication through public relations and consumer communication through digital marketing. In all consumer communication we have a focus on timely, personal, and “non-corporate” feeling in our communication, like you are calling the little restaurant down the street. We always try to go the extra mile with an “Annie’s touch”. Always grassroots versus mass and corporate in feel, and in a brand voice blending honesty, whimsy, empathy, passion, and optimism about a better future for all of us especially our children and the planet we all live on. We prize and value creativity and encourage that expression of Annie’s creativity in everything, from design of a circular, to the shape of the bunny butt on the break room wall. Keep Austin weird. I repeat, keep Austin weird.
Industry and company leadership orientation: We always try to lead in everything we do, with an entrepreneurial spirit, with customers, consumers, and industry. When there is a big issue we care about, we will stand up and be counted, even if that makes us unpopular with some people, some of the time. We do not compromise on this because it is the foundation of our high-integrity relationships with consumers.
We will remain at the front edge of issues that our consumers care about, including organic integrity and standards, GMO and other ingredient transparency, and advocacy for key causes impacting food and the health and our children. We lead wherever possible in industry boards and encourage our people to broadly participate to do that wherever there are opportunities. We lead with customers, providing best in class natural consumer insights and strategies that can build their businesses and that are not watered down. We punch for effect in our approach with retailers to drive our business and our values into the mainstream.
We hire smart, hard-working, confident, humble & creative people who will honor and uphold our values, perpetuate our culture, and drive our mission: People are what have set us apart from the beginning, and they will continue to do so in the future. We will continue to invest in our culture and values and that includes investing in our people, their capabilities, and their whole (mental, physical & spiritual) happiness and fulfillment. Rather than letting this commitment get diluted, we will double down on it and Annie’s will remain a magnet for people who are enriched by and drawn to this mission, and we will also be an example and living lab for the rest of General Mills on how to do things at the cutting edge of purpose driven business.
There you have it. Best of luck growing your purpose-driven business. May you change the world for the better.
ABOUT THE AUTHOR:
John Foraker is the President of Annie’s, Inc. John joined Annie’s in 1999. He’s grown the business to more than $250MM in revenues and lead its successful sale to General Mills in October 2014 for $820MM—a valuation of approximately 4x revenues and >35X EBITDA. John is responsible for continuing to build the brand and culture of Annie’s, Inc., now a wholly owned subsidiary of General Mills.