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    Tom Dougherty CEO, Stealing Share

    Tom Dougherty is the President and CEO of Stealing Share, Inc., and has helped national and global brands such as Lexus, IKEA and Tide steal market share over his 25-year career.

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Annie’s IPO could be troubling for its brand

“For more than 20 years, Annie’s has been nourishing families with simple, down-to-earth foods that taste great and are easy to love.  Annie’s is driven by a team of folks who are passionate about food, people, and the planet we all share. That’s why we’ve sought out the best ingredients Mother Earth has to offer, harvesting pure, natural flavors to make delicious foods every family can feel good about. 

Honest-to-goodness goodness is cooked up here.  “ – Excerpt from Annie’s Website

Annie’s IPO that is sending investors into a frenzy, as Annie’s stock rose by as much as 70% from its IPO price. If you are not familiar with Annie’s, it is a producer of organic and natural foods with a promise of social responsibility. Started out of a house, Annie’s now has around 125 different products in 25,00 different retail outlets. Annie’s has a passionate and loyal following, and it seems that its IPO has initiated some passion from investors as well.

But what does an IPO like this mean to a brand like Annie’s?

Annie’s IPO

Annie’s came from very humble beginnings and there were a lot of people who worked very hard to get it to this point. Further, Annie’s has prided itself on how it gets its ingredients and puts a lot of time and resources promoting and developing community-based sustainable and natural farming and gardening. It has worked hard in getting legislation passed to change food labeling and actively supports causes and individuals who share its beliefs.

One of the things that struck me is that ,in many ways, those who use and love Annie’s products seem to be the antithesis of a typical “Wall Street” type. Though premium in price, Annie’s never positioned itself as a business. It was more of a movement. Its positioning has always been around organic, natural, sustainable, and socially responsible –  terms not typically associated with big agribusiness. Up to now, Annie’s has successfully forged its own way based upon its beliefs and has not had to succumb to the pressures of being a publicly traded company, beholden to Wall Street for quarterly results.

Will that change who it is?

annie's IPOIf you asked any of its executives, they would all vehemently say no. Truth be told, they shouldn’t allow any effect because Annie’s power is based on emotion, not dollars and cents.

However, experience says that going from private to public means the market will affect Annie’s. Becoming public has a way of diluting “causes” to the point where they offer the least amount of offense by casting the biggest to make projections and satisfy investors. Those tend to rump all.

This IPO will give Annie’s an influx of cash. Investors will want to see a return on that cash and the major investors will want to have a say in how that’s done. If Annie’s really cares about its brand and does not want to get swept up into the Nabisco or P&G mass production juggernaut, then it must take it very slowly in managing investor expectations and making its core customers comfortable with the transition.

Will investors be OK with a smaller return in cash for a larger return on social responsibility? It is a difficult balancing act naturally (no pun intended) tilted to the side with money. Annie’s, don’t lose the cause because it’s the emotional part of your business – and the most important.

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