Van's International Foods Inc., a Vernon company known for its organic frozen waffles, is being acquired by an investment fund seeking to profit from the growing popularity of natural foods.
Healthy Food Holdings of Boulder, Colo., is buying Van's from KCA Partners, a San Francisco private equity firm that acquired the waffle maker in January 2000. Terms of the transaction were not disclosed.
Van's, which will have sales this year of about $25 million, accounts for close to half of the market for all-natural frozen waffles with varieties such as "Wheat Free Blueberry," "Hearty Oats" and "Gourmet Multi-Grain."
With an annual growth rate of 20% since 1997, natural and organic products are the fastest-growing segment of the food industry, which typically grows 3% to 4% annually, said Dennis Krause, senior vice president of GE Commercial Finance.
Van's has expanded even faster, notching annual sales growth of about 25%, said Chuck Marcy, chief executive of Healthy Foods.
The new owners plan to build on that momentum by introducing products and finding new sales outlets.
Van's products are carried by most of the big natural food chains, such as Whole Foods and Wild Oats, and the company also has a strong presence in Trader Joe's stores, Marcy said.
They're available in only a quarter of mainstream grocery stores and Wal-Marts, presenting an opportunity for growth, he said.
The popularity of Van's and other brands indicates that natural foods -- once seen as fringe products -- have gone mainstream, Krause said. Further evidence was Wal-Mart's decision to begin stocking natural foods.
"When I go into Trader Joe's, the customer base looks like a lot of the general population out there," Krause said. "Ten years ago, it would've looked more like the 'organic foods movement.' "
No layoffs are planned at Van's corporate headquarters and manufacturing plant in Vernon, where the company employs 75 people, Marcy said.
"Our intention is to keep all the operations of Van's right here in Vernon and expand the business here," he said.
It's the second acquisition for Healthy Foods, created in 2005 by Connecticut private equity firm Catterton Partners to invest in the natural foods industry, which Krause said is ripe for private equity investment.
Most of the industry's players are smaller operators, he noted.
A buyer that can snap up several companies and operate them under a single corporate umbrella -- such as Healthy Foods -- will have an advantage in dealing with big retailers.
Van's traces its roots to a restaurant of the same name that was opened in 1968 in Redondo Beach by Pilou Van Dam, who developed a loyal following for her waffles.
According to the company, the recipe was a family secret dating to 16th century Belgium.