Organics are big business, and big food companies are taking notice. The result? Some of our favorite "indie" organic brands are being snatched up by large companies like Coca Cola and Kraft. In fact, there have been a couple of high-profile acquisitions in the food world this year — including two major deals in the meat department (Niman Ranch to Perdue and Applegate to Hormel). So we figured it's a good time to look at what it means for consumers when small, natural, and organic companies suddenly belong to the big guys. First, here's an infographic to show which organic brands are owned by big food companies.
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And here’s a little more info on what happens — and who is influenced — when an independently owned brand gets acquired.
The Stockholders Reign Supreme
Most of the companies making these acquisitions are publicly traded. That means that their main responsibility is not to their customers or values; it's to their stockholders. That’s neither a judgement about all of corporate America nor a simple issue. Whole Foods Market — generally accepted as a force for good in the food world despite recent troubles — is publicly traded, while Perdue Farms — which recently acquired the lauded Niman Ranch — is privately held.
The Stockholders Reign Supreme
Most of the companies making these acquisitions are publicly traded. That means that their main responsibility is not to their customers or values; it's to their stockholders. That’s neither a judgement about all of corporate America nor a simple issue. Whole Foods Market — generally accepted as a force for good in the food world despite recent troubles — is publicly traded, while Perdue Farms — which recently acquired the lauded Niman Ranch — is privately held.
The Staff Changes...
When these deals happen, existing leadership is often kept on board — initially. This move signals to the public that the brand they know won’t fundamentally change. But after a few years, when the shock has worn off, leadership does start to turn over. And staff with less exposure to the original company culture and ethos can take the brand further away from its origins. ...As Do The Suppliers
Especially in the meat category. Big companies like Perdue and Smithfield get their supply from an extensive network of contracted farms (or, in most cases, concentrated animal feeding operations, also known as CAFOs). “Premium” producers such as Niman and Applegate use a smaller network of even smaller farms, but consumer unrest is understandable when the establishment and the alternative end up under the same roof. How these companies treat their farmers (let alone their animals) is one of the most controversial and opaque parts of the business. But documentaries and journalists have become much better at sniffing it out, so keep an eye open and you may catch the issues — at least those that become public. So, What Can YOU Do?
This infographic list is by no means exhaustive. Yes, the deals selected were chosen because the companies on both sides are household names. But there are many more in which the big guy or the little guy is less well-known. The bottom line is to keep an eye out and ask questions. Packaging changes, branding changes, and recipe changes are all natural in the life of a brand. But when things change, concerned consumers should ask: Why? Is the new packaging more or less sustainable? Does the new recipe contain new ingredients or less nutrition? Business practices are harder to keep an eye on, but a Google alert will go a long way in making sure the companies you trust stay trustworthy.
When these deals happen, existing leadership is often kept on board — initially. This move signals to the public that the brand they know won’t fundamentally change. But after a few years, when the shock has worn off, leadership does start to turn over. And staff with less exposure to the original company culture and ethos can take the brand further away from its origins. ...As Do The Suppliers
Especially in the meat category. Big companies like Perdue and Smithfield get their supply from an extensive network of contracted farms (or, in most cases, concentrated animal feeding operations, also known as CAFOs). “Premium” producers such as Niman and Applegate use a smaller network of even smaller farms, but consumer unrest is understandable when the establishment and the alternative end up under the same roof. How these companies treat their farmers (let alone their animals) is one of the most controversial and opaque parts of the business. But documentaries and journalists have become much better at sniffing it out, so keep an eye open and you may catch the issues — at least those that become public. So, What Can YOU Do?
This infographic list is by no means exhaustive. Yes, the deals selected were chosen because the companies on both sides are household names. But there are many more in which the big guy or the little guy is less well-known. The bottom line is to keep an eye out and ask questions. Packaging changes, branding changes, and recipe changes are all natural in the life of a brand. But when things change, concerned consumers should ask: Why? Is the new packaging more or less sustainable? Does the new recipe contain new ingredients or less nutrition? Business practices are harder to keep an eye on, but a Google alert will go a long way in making sure the companies you trust stay trustworthy.