American food is changing, and we’re in the midst of a real food revival – one that favors accountability, sustainability and transparency. The number of farmers markets has more than quadrupled in the last twenty years, and CSAs are popping up all across the country as consumers look for ever greater connections with the people who produce their food. Moreover, sales of organics are increasing by about 14% annually, but still comprise only 4-6% of food sold nationwide. There’s plenty of room for more growth.
Does Big Food Change Organics? Or Do Organics Change Big Food?
When a big company buys a small company, there is real and valid concern that such an acquisition, like General Mills acquiring Annie’s or Hormel acquiring Applegate, would fundamentally change how the natural foods company operates, how they source their ingredients, how their farmers raise livestock, for the worse.
When I was at ShiftCon, a blogging and social media conference for the natural living space, I heard John Foraker, the CEO of Annie’s, speak to this exact issue. When asked whether General Mills made any demands or changes to Annie’s he answered that he hasn’t once been asked to compromise about Annie’s, and it remains the same forward-thinking, ethics-focused natural foods company it was before General Mills acquired it. Similarly, when Hormel acquired Applegate earlier this year, it did so with the understanding that Applegate would continue to operate autonomously the same as it always has, with the same farmers and welfare standards it always has. This is one reason why I worked with them last year and continue to work with them, on their sandwich board this year, too.
And while small organic and natural foods brands that are acquired by large, industrial food corporations typically have the freedom to continue to operate with the ethics and mission that has always guided them, what has shifted is big food. Indeed, General Mills announced that its original Cheerios would be made from ingredients free from GMOs, no doubt in response to considerable consumer pressure. The question we should be asking is how will consumer pressure, clear upward growth in organic food, and the acquisition of natural brands change the face and actions of big food?
“I think there’s a great opportunity for smaller companies like Applegate to help effect change in bigger companies. But it’s really up to the smaller companies to prove to consumers through actions that they are remaining true to their mission and that’s what we are committed to doing every day at Applegate on issues like animal welfare and GMOs,” said Gina Asoudegan, Applegate Senior Director of Mission.
And, if we, as a movement are going to effect real change when it comes to the food in America, big food needs to change, too.
Foraker followed up by saying, “If we can get the big guys to buy into organic, we can create the change we want to see.” That change means greater access to organic natural and whole foods around the country, converting farmland to organics, and making sweeping changes in how we grow and consume food whether on the tiny level of the backyard garden or the expansive level of chain supermarkets.
Big Food Cares about the Bottom Line
Maximizing profits is the crux of big food, and achieving that in the industrial food system has meant using synthetic pesticides and herbicides that wouldn’t be allowed in organic agriculture; it has meant ecologically destructive agricultural practices, as well as, in some cases, the abuse of livestock and the exploitation of workers.
Organics, by contrast, offer a message of hope, resilience and regeneration, though consumers who value these ethics should continually push for them. It is that message that speaks to the fast-growing number of consumers who increasingly purchase organic foods, and it is what makes the organic industry grow profitably at such a rapid pace.
It is profits and increasing market share that drive large players in big food to acquire smaller, organic and natural food companies. Ethically produced foods represent the future of the food system specifically because of increased consumer awareness about and demand for these products.
When Franck Riboud of Danone was pressed about its acquisition of Stonyfield Farm, he told the Wall Street Journal, “Stonyfield represents an ethic, and it’s an ethic we will have to adopt if we are going to be successful in the 21st century.”
The acquisition of smaller organic and natural food companies is a direct result of informed and discerning consumers exercising their influence and purchasing power. When a large, industrial food brand acquires a smaller, organic brand, it does so with the intention of maintaining and increasing profitability. That acquisition acts as an investment, and the best way to nurture that investment is to let it continue doing what it does best while providing greater opportunities for the smaller brand to expand into more markets.
As Gary Hirschberg, CEO of Stonyfield, explained in a recent talk on acquisitions of small brands by large corporations, it doesn’t make financial sense to purchase small natural companies for hundreds of millions of dollars, only to run them out of business. It is also financially easier to grow an existing, profitable business than it is to start a new line completely from scratch.
In essence, it makes the most financial sense for big, industrial food companies to not only allow small brands to maintain their autonomy after an acquisition, but to also support them in doing so.
Increasing Access to Organics
One of the greatest issues that faces the organic and natural foods movement is that it is perceived as inaccessible for many Americans, particularly those who are socioeconomically disadvantaged; that is, organic and natural foods are not only more expensive, but they are also relegated to specialty marketplaces. When big food invests in small organics, they bring with them existing relationships and distribution channels that can increase access to organic foods by larger numbers of people across the country.
Ten years ago, hardly anyone had heard of kombucha, a fermented tea that was relegated to home brewers and small companies that sold to tiny natural foods stores. Today, though it was once considered fringe, it is now accessible nationwide in supermarkets like Safeway and Kroger.
With increased consumer interest, and with access to bigger distribution channels, organic and natural food companies can provide nourishing foods for people of all income levels, across the country. Applegate, for example, sells grass-fed hot dogs free from the synthetic additives found in conventional hot dogs, and they sell them nationwide.
Increasing Research on Organics and Education for Farmers
As consumers become ever more educated and thus discerning, and as large food brands begin to either acquire small brands or invest in their own natural and organic lines (or both), there exists an opportunity to push the natural foods movement forward even further.
Small natural food brands, to maintain competitive advantage, need to be forward-thinking enough to envision what the future of their industry looks like. For many, that means focusing on regenerative farming, instead of just organic farming; holistic management instead of just grass-fed.
That’s precisely what they’re doing; Applegate has supported research at the Rodale Institute that makes raising pigs on pasture more accessible and scalable for both new and existing farmers (read more here and here). Stonyfield also supports a teaching and research farm that helps to train farmers on organic, grass-fed dairying.
The goal of these programs are to continually push the movement forward. Programs like these perform the function of training young farmers with the express goal of increasing the number of organic farms. Considering that only about 1% of American farmland is organic, and the organic foods market is growing so rapidly, the success of programs like these will determine the future viability of the organic movement. After all, there’s no food without farms.
Supporting Small Brands
When large companies acquire natural brands, they have the power to expand them – this also puts pressure on the resources available to small, family-owned companies with regard to access to supplies and with regard to maintaining competitive prices in the marketplace.
These small companies have the opportunity to provide unmet needs in the marketplace, and to push the organic movement further.
So what do we buy?
For my part, the amount of our food budget that goes to packaged foods is minimal. Instead, we tend to favor purchasing whole foods directly from nearby farms and ranches which comprise about 90% of our foods.
Our chickens and ducks come from a farm about thirty miles away. Our pork comes from the same farm that supplies us with pulses, grains, fruits and vegetables, and it’s only a five-mile bike ride from home. Our milk, likewise, comes from a raw dairy only a few miles from home. Our fish arrives monthly, straight from the fishermen’s cooperative. We don’t need much else, and these foods give me the building blocks from which I cook most of our meals from scratch.
I also choose to support companies who balance mission with profit, and whose products fit into a larger picture of what sustainable food production looks like.
However, when we need lunch meat or are out of bacon, we buy Applegate. When I want a bit of something sweet, I might buy Green and Blacks fair trade chocolate. When it’s winter and I’m desperate for greens that won’t arrive until springtime, I buy Earthbound Farm. When I lack time for shelling peas, I buy Cascadian Farm. And when I’m on the road, I usually reach for a peach-oolong blend from Honest Tea. All of these brands have been acquired by large players in the food industry.
In general, we benefit by including fewer packaged foods in our diets, organic or not, than more.
Because, frankly, if we really want this movement to grow and succeed, that means embracing it at all levels, from little to big, while still remaining vigilant, informed and discerning consumers who continue to expect accountability and transparency from all of our food producers, from small to big.