When Natural Brands Go Big
There’s a party trick I like to play with people I’ve just met. Name a natural or organic company you like, I say, and I can probably name a conglomerate that owns it.
Kashi? That’d be Kellogg’s.
Stonyfield Farms? Danone.
Cascadian Farm? General Mills.
My trick isn’t all that impressive, really. I mention it because of the reactions I get, almost all of which are negative. That makes me like them a lot less, seems to be the consensus.
That’s understandable. We associate small, autonomous operations with quality and purity. When a large company buys up a trusted natural and organic brand, it’s hard to believe that company will care about the values behind that brand — especially if it’s a company that also sells flaming hot cheesy poofs.
At the same time, without that company’s deep pockets and distribution muscle, you likely wouldn’t even know that organic cereal you love so much existed. And isn’t that the whole point of the natural and organic movement — to expand those values to the mainstream?
It would seem we’re faced with a Faustian bargain: A company can remain small and virtuous, but with limited market availability; or scale up and find a larger audience, but lose its soul.
There’s no doubt that scaling up can alter a product. After Tom’s of Maine sold a majority of its shares to Colgate-Palmolive, the company reformulated some of its products and faced a backlash from consumers complaining the mouthwash tasted bad, the deodorant caused allergic reactions, and more. A similar outcry came from Cascadian Farms customers recently when they noticed the General Mills-owned company had tripled the amount of sugar in its “Purely-Os” kids’ cereal.
The loudest dissenters were legacy consumers who had been buying the brands for many years. But their concerns may not be the same as those of non-core shoppers. In the case of Purely-Os cereal, the sugar count “tripled” from 0 grams per serving to 3 grams — hardly qualifying it as junk food.
As New York University professor, author and nutrition guru Marion Nestle points out, it was “simply a business decision.” Cascadian knows that most kids won’t eat cereal without any sugar, and I agree it’s not selling out to make that concession as they expand their market reach.
However, natural and organic shoppers have every right to remain vigilant. Manufacturers often make these changes without telling anyone, which was a major contention with the Purely-Os decision. It’s also true, especially when it comes to under-regulated “natural” and functional claims, that companies have a history of running wild. Remember when Rice Krispies claimed to support your kid’s immunity? Or when Cheetos went all-natural?
In the end, change is driven by what people want, and so companies must navigate a tricky balance between core values and mainstream tastes as they grow.
The way things are trending, though, I don’t think natural and organic companies are required to sell their souls in order to expand. Stonyfield Farms’ buyout hasn’t kept it from championing family farms and upholding standards like using only non-GMO ingredients. Last year, Coca Cola exercised its option to buy out the remaining shares of Honest Tea (after purchasing a 40% stake in 2008), yet the company’s tea-EO Seth Goldman made sure to retain his position to ensure the brand’s integrity.
Buyouts will continue as natural and organic growth continues to outpace traditional packaged goods. In the past month, General Mills bought Food Should Taste Good, a company that makes uniquely flavored all-natural chips, while Dole purchased Mrs. May’s Naturals, a nut and snack brand.
I’m sure this comes as depressing news for many of those loyal to these brands, and to the growing ranks of natural and organic shoppers. But look at all of this as an opportunity. Companies need to learn how to deliver natural and organic values on a mass scale. Their impressive growth has gotten the attention of large corporations, and now they have an opportunity to change the way they do business.
