Could Annie's trigger a string of IPOs for the natural and organic sector?

When organic mac and cheese maker Annie’s announced Dec. 2 that it plans to go public, the news fired up financial analysts and potential investors who would love to get a piece of the growing and profitable natural and organic foods company. Annie’s decision to raise $100 million through an initial public offering was also favorably received by many in the natural and organic products industry.

“This IPO will be a win-win for investors and consumers,” said Robyn O’Brien, a former financial analyst and author of The Unhealthy Truth: How Our Food Is Making Us Sick and What We Can Do About It. “It will give investors an opportunity to be part of a fast-growing category in the grocery sector, and it will give Annie’s capital to expand its product offerings, get into more stores, and give more Americans affordable access to clean and safe food.”

O’Brien is so bullish on Annie’s move to go public that she believes it could actually be a happy harbinger of things to come for the broader natural and organic market. “This is an exciting opportunity for the company and for the sector,” O’Brien said. “I could see other fast-growing companies such as Justin’s Nut Butter doing the same thing five or 10 years from now.”

Although its IPO date has not yet been set, Annie’s plans to list its shares on the New York Stock Exchange under the apropos ticker symbol “BNNY,” which pays tribute to the company’s mascot Bernie the Bunny. The company says it will use the money raised in its public offering to grow its distribution and product line, which currently features 125 SKUs such as Cheddar Bunnies and gluten-free mac and cheese.

“Because our products are profitable and attractive to retailers, we believe we can continue to expand in the mainstream grocery and mass merchandiser channels, while continuing to innovate and grow our sales in the natural retailer channel,” the company wrote in its S-1 filing.

A profitable IPO prospect

Compared to other recent IPOs, Annie’s planned offering is relatively small and unlikely to generate the buzz that technology companies such as Facebook, LinkedIn and Groupon have engendered amongst the global investment community. However, Annie’s has something that many of tech companies do not: profitability.

According to the company’s filing with the U.S. Securities and Exchange Commission, Annie’s tripled its profit to more than $20 million in the fiscal year ended March 31, 2011. Sales for the year came in at nearly $118 million, up 22 percent from the previous year.

As someone who experienced many IPO road shows in her days as a financial and food industry analyst, O’Brien said Annie’s is likely to be well received by the mostly male investment analysts who hear the company’s IPO pitch. “Many of them have wives at home who are dealing with the health issues created by our current food system,” she said. “I think Annie’s IPO will outperform expectations, and I would love to see it oversubscribed.”