MARS ACQUIRING ORGANIC FOOD MARKETER SEEDS OF CHANGE: CANDY SELLER EXTENDING FURTHER INTO NUTRITIONAL FOODS SEGMENT VIA PURCHASE

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Mars Inc., as the latest sign of its interest in nutritional foods, is purchasing a small organic foods marketer that's about to launch its first consumer ad campaign.

Seeds of Change, a privately held company started up in 1989 as a marketer of "heirloom" seeds, is now introducing its first food line, which includes pasta sauce, salsa, rice and grain blends, soup mixes and salad dressings.

The line is being distributed in health and organic food stores.

"Seeds of Change is in the process of being acquired by Mars," said Steve French, general manager-foods at Seeds of Change. "It will be operated as a wholly owned subsidiary."

DMB&B HAS CREATIVE

Mars declined comment, referring calls to Seeds of Change, which wouldn't discuss terms.

Seeds of Change tapped D'Arcy Masius Benton & Bowles, New York, for consumer advertising breaking this week. DMB&B's St. Louis office handles several M&M/Mars candy brands, including Milky Way and Twix.

It's believed Mars' interest in Seeds of Change is twofold. First, like several other major food marketers-among them Kellogg Co. and Campbell Soup Co.-Mars has shown increasing interest in the burgeoning "functional foods," or nutraceuticals, arena. That business is loosely described as foods that have naturally occuring health benefits.

While Mars is best-known for its candy unit, it also owns Uncle Ben's rice and Kal-Kan Foods and "is really very health- and nutrition-focused and considers itself an expert on food and human nutrition," according to a former executive of Mars.

It has introduced into test a calcium-fortified rice under the Uncle Ben's brand and created a sports nutrition unit to market a super-charged energy bar called VO2 Max. Even Kal-Kan has hammered home the idea of nutrition with an ad campaign touting the pet food's benefits for pregnant dogs.

A NICHE IDEA

Seeds of Change "is now very much a niche idea, because it's still a very narrow segment," said the former Mars executive. "But for Mars, the big question is can it fly internationally and can they do something with it down the line-like organic dog food or even chocolate?"

The second reason for Mars' attraction to Seeds of Change is said to be its management. The company's president, Stephen Badger, is the son of Jackie Mars, daughter of Mars founder Forrest Mars Sr.

Mars confirmed the name of Seeds of Change's president but wouldn't comment on any family relationship. Mr. French said his company doesn't comment on current ownership.

20% GROWTH IN ORGANICS

Mr. French said that while organics now account for only 2% of the total food and beverage business, they still account for $3 billion in annual sales and the segment is growing at a 20% annual clip.

"This is not a fad," he said. "People equate good food with good health."

The new food lines are a natural extension of seeds, the company's first business via direct mail. Since then, Seeds of Change has expanded into gardening tools, books and gifts with limited trade advertising.

With the idea to branch into foods, the company tested "19 brand concepts," said Mr. French, before coming up with the five lines it introduced at the Natural Products Exposition last month.

The products will be sold in health stores like Whole Foods and Food Circus, Mr. French said, as well as GNC nutrition stores.

While there are few major players in organics currently, the Seeds of Change lines are expected to compete with marketers including Cascadian Farm and Health Valley Natural Foods.

ADS IN 25 MARKETS

The radio and print campaign for the Seeds of Change foods will run in about 20 to 25 markets, said Mr. French, and in publications such as Delicious! and Vegetarian Times. There are three initial print executions, focused on hands holding corn, tomatoes and a bowl of roots. The copy in the latter ad reads: "When we started our organic food company, we didn't forget our roots."

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