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Shares of Organic Food Company Annie's Soar After IPO


Investors had a healthy appetite for Annie's -- the stock jumped 89% in its first day of trading.

Investors gobbled up shares of Annie's (BNNY), the organic packaged food company best known for its bunny-shaped macaroni and cheese went public yesterday.

Shares soared 89% in the company's IPO yesterday, and some investors seem to be coming back for seconds. So far today, shares are up nearly 8%.

The food processing sector has underperformed the S&P 500 so far this year, but organic niche products are gaining popularity. Annie's line of packaged macaroni and cheese, pizza snacks, salad dressings, and condiments compete for shelf space and consumers' cash with private organic brands like Nature's Path and organic brands tied to bigger food conglomerates like Kraft (KFT), Kellogg (K), General Mills (GIS), and Heinz (HNZ). The market for organic food grew rapidly in the last decade, but the economic downturn put a damper on the organic market as consumers felt it harder to justify the extra cost of organic food.

Annie's lost money between 2007 and 2010, when it swung to a $6 million profit. For the year ending on March 31, 2011, its latest fiscal year, Annie's was able to multiply profits by 3, booking $20.2 million.

Annie's hopes to pay off debt and build market share with the money raised in the IPO. Solera Capital LLC, a private equity firm, sought to reduce its share of the company from over 90% to 63% in the IPO offering. Solera made its initial investment in the company in 1999, the same year that it brought on John Foraker as CEO.

Annie's was started in 1989 in Berkeley, California, by Annie Whitney and Andrew Martin. Though Whitney no longer runs the day-to-day operations of the company, she still holds the title of "inspiration president" and writes personal messages on the company's food packages. Her pet rabbit, Bernie, still serves as Annie's official mascot.

Twitter: @vincent_trivett
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