Kraft Foods to sell majority stake in Back to Nature food brand

US-based Kraft Foods has agreed to sell a majority stake in its Back to Nature food brand to private equity firm Brynwood Partners for an undisclosed amount.

Back to Nature, which was acquired by Kraft Foods from California-based Organic Milling in 2003, produces cookies, crackers, trail mixes, granolas, nuts and pasta dinners.

The brand, which operates in the natural foods category, claims to avoid the use of artificial flavours, preservatives, hydrogenated oils and high fructose corn syrup in the manufacture of its products.

Following the latest transaction, which is expected to be completed in October 2012, Kraft Foods will hold only a minority stake, but will have board representation, while Brynwood will take control of daily operations.

Kraft Foods spokesman Michael Mitchell was quoted by The Wall Street Journal as saying that Back to Nature does not have enough scale for the company to direct the resources to facilitate its growth.

The brand’s annual sales are anywhere between $50m and $75m, and cookies, crackers and trail mixes have seen an annual sales growth of approximately 20%.

The latest deal comes before Kraft Foods’ planned split in October 2012, which will create a global snacks business called Mondelez International, and a North American grocery business called Kraft Foods.

Following the spin-off, Kraft’s stake in Back to Nature will be part of Mondelez International.

Brynwood, which focuses on acquiring smaller consumer goods brands from large companies, has previously acquired two brands from Kraft – it purchased the Stella D’oro brand of cookies and breadsticks in 2006 and the Balance Bar brand of nutritional energy bars in 2009.

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Image: Kraft Foods will have board representation following the sale of its majority stake in the Back to Nature food brand, while Brynwood will take control of daily operations. Photo: Bearas.