If Big Food Buys Your Favorite 'Natural' Food Brand, Will You Trust It?
Big food companies are buying up small ones. Honest Tea is now part of Coca-Cola. The French company Danone controls Stonyfield yogurt. Hormel owns Applegate natural and organic meats.
The Cornucopia Institute has put together a poster that shows the full extent of the merger wave, at least for the organic industry. In the latest deal, announced a few weeks ago, Perdue Farms, a big poultry producer based in Maryland, bought Niman Ranch, which started as an idealistic group of farmers protesting against companies like Perdue.
For shoppers who like their food natural, local and organic, though, these deals can be unsettling. Will they still trust a food brand if someone else now owns it?
As it happens, some of the founders of those companies wonder the same thing.
Take these three: Bill Niman, Gene Kahn and Grant Lundberg. Niman started Niman Ranch, Kahn founded Cascadian Farm, a pioneer of organic food, and Grant Lundberg is CEO of Lundberg Family Farms, which sells organic rice.
Each of these companies started with its own vision of a better way to grow food. "For us, the innovation was raising animals without the use of pharmaceuticals and chemicals," Niman says.
At roughly the same time, in the early 1970s, Gene Kahn started a back-to-the-land experiment that turned into a business. "I became enamored by the whole notion of agriculture, and farming, and improving the environmental performance of agriculture," he says. Grant Lundberg's grandparents, for their part, were influenced by the trauma of the Dust Bowl. "Remembering some of those experiences, they started to farm a little different from their neighbors," Lundberg says.
A grilled Niman Ranch pork chop. Perdue Farms, a big poultry producer based in Maryland, bought Niman Ranch in September.
In addition to a vision, though, these companies had ambition. They wanted to expand, and they did, riding a wave of demand for humanely raised meat, organic fruit and organic rice.
That's when big, conventional food companies started calling with marriage proposals.
"We have offers a lot," Lundberg says. "They want to explore, they want to talk about the idea of purchasing, or making an investment in the company."
So these founders (or, in the case of the Lundberg family, the grandchildren of the founders) all faced a choice. Should they sell? Would it be selling out?
Gene Kahn, from Cascadian Farm, can't stand that phrase "because it's so akin to selling out your soul to the devil."
He says it's not that simple. Part of the pitch that the big companies typically make involves a promise to expand the company's vision, converting more land to organic farming, or raising more animals without hormones and drugs.
"Who do you want to work with, if you're really committed to improving agriculture?" Kahn asks. "Who is it that you want to talk [to]? Do you want to just talk to yourself? Or do you want to talk to the people who control all the acres?"
None of these food idealists has anything against the sheer size of big food companies, by the way. They agree: Big can be good. Efficiency makes food affordable.
"You're a cynic if you say only small companies can ... have values, aren't you?" Lundberg says. "Somehow you have to believe that size doesn't matter."
Each founder, however, has pursued a different path.
The Lundberg family has spurned all offers. Grant Lundberg says that his company doesn't really need investors. And if you sell, he says, there's no way to make sure that the name Lundberg Family Farms "would continue to represent that commitment to the environment, producing high-quality food."
Gene Kahn, though, sold Cascadian Farm to one of the biggest food companies in America: General Mills. That was 15 years ago.
He says it's worked out really well. "They've not only preserved the ethics and the whole vision of the company, they've improved it," he says.
Bill Niman, meanwhile, has complicated feelings about the recent sale of Niman Ranch to Perdue.
"Right now, I feel pretty good about it," he says. Niman has some emotional distance, by now, to the company that he founded. He actually left Niman Ranch eight years ago.
"The important thing is that Perdue is very capable of adhering to the same kind of standards for treating animals better, and treating farmers more respectably," he says.
In fact, Perdue may be forced to follow that way of operating, Niman says. The poultry giant just spent a lot of money for the Niman Ranch name and reputation. It wouldn't want to ruin that asset, he says.
But Niman still worries that the new owners will just try to maintain that reputation through marketing, with slogans that don't mean much. "These bigger outfits have a lot of marketing power, and they're able to spin things and create confusion in the marketplace, which is a little bit frightening for me."
He admits that he doesn't feel the same about Applegate products, now that Hormel owns it. He doesn't buy Stonyfield yogurt anymore. He says he just doesn't trust the new owners quite as much.
To keep that trust, big food companies may have to do more than buy a brand. They may need to show skeptical consumers that they're sticking with the principles of that company's founders.
9(MDE1MTIxMDg0MDE0MDQ3NTY3MzkzMzY1NA001))
Transcript
KELLY MCEVERS, HOST:
For people who like their food natural, local and organic, these are unsettling times. In Alternative food is going mainstream. Big companies are buying up small ones. In the latest deal, Perdue Farms, the big poultry producer, bought Niman Ranch, which started as an idealistic protest against companies like Purdue. Consumers may wonder if they can trust the new owners, and some of the founders of those small companies wonder the same thing. NPR's Dan Charles reports.
DAN CHARLES, BYLINE: There's a whole generation of food companies that started because a few people wanted to raise food differently, better, like Bill Niman, founder of Niman Ranch.
BILL NIMAN: For us, the innovation was raising animals without the use of pharmaceuticals and chemicals.
CHARLES: Around the same time in the early 1970s, Cascadian Farm, the organic food pioneer, got started. For Gene Kahn, the founder, it was a back-to-the-land move that turned into a business.
GENE KAHN: I became enamored by the whole notion of agriculture and farming and improving the environmental performance of agriculture.
CHARLES: And that's a goal that Lundberg Family Farms, the organic rice grower, had been perusing for years already. Grant Lundberg, the company's CEO, says it started with his grandparents and what they saw living through the dustbowl.
GRANT LUNDBERG: Remembering some of those experiences, they started to farm a little different from their neighbors.
CHARLES: All three of these companies had a vision and, also, ambition. They wanted to expand, which they did. They rode a wave of demand for humanely raised meat, organic fruit and rice. And before long, some big conventional food companies started calling with marriage proposals.
LUNDBERG: We have offers a lot.
CHARLES: That's Grant Lundberg from Lundberg Family Farms.
LUNDBERG: They want to explore. They want to talk about, you know, the idea of purchasing or make an investment in the company.
CHARLES: So these companies all faced a choice. Should they sell? Would that be selling out? Gene Kahn from Cascadian Farm can't stand that phrase.
KAHN: You know 'cause it's so akin to selling out your soul to the devil.
CHARLES: He says it's not that simple because part of the pitch that the big companies make is, we can expand your vision, convert more land to organic farming, raise more animals without hormones and drugs.
KAHN: Who do you want to work with if you're really committed to improving agriculture? Who is it that you want to talk to? You want to talk to yourself and people just like you, or do you want to talk to people who control all of the acreage?
CHARLES: These food idealists don't have anything against big companies, by the way. They all say big can be good; efficiency is what makes food affordable. Here's Grant Lundberg.
LUNDBERG: You're a cynic if you say only small companies can be - have values, aren't you? Somehow, you have to believe that size doesn't matter.
CHARLES: Over the years, many small alternative food brands have said yes to these deals. Honest Tea is now part of Coca-Cola. The French company Danone controls Stonyfield yogurt. Hormel owns Applegate Natural and Organic Meats. Lundberg Farms, so far, has stayed independent. Grant Lundberg says his company doesn't really need investors. And if you sell, he says there's no way to make sure the name, Lundberg Farms, will mean the same thing.
LUNDBERG: That your name would continue to represent that commitment to the environment, producing high-quality food.
CHARLES: Gene Kahn, though, sold Cascadian Farm to one of the biggest food companies in America - General Mills. That was 15 years ago, and he says it has worked out really well.
KAHN: They've not only preserved the ethics and the whole vision of the company. They've improved it.
CHARLES: Bill Niman, meanwhile, has complicated feelings about the recent sale of Niman Ranch to Purdue.
NIMAN: Right now, I feel pretty good about it.
CHARLES: He has some emotional distance by now to the company that he founded. He actually left Niman Ranch eight years ago.
NIMAN: The important thing is that Perdue is very capable of adhering to the same kind of standards for treating animals better and treating farmers more respectively.
CHARLES: They can do it, Niman says, and they almost have to because they just spent a lot of money for the Nimal Ranch name and reputation. They don't want to ruin it. But Niman does worry that the new owners will just try to maintain that reputation through marketing with slogans that don't mean much.
NIMAN: These bigger outfits have a lot of marketing power, and they're able to spin things and create confusion in the marketplace, which is a little bit frightening for me.
CHARLES: He says he has to admit he doesn't feel the same about Applegate products now that Hormel owns it. He doesn't buy Stonyfield yogurt anymore. He says it's a matter of trust. To keep that trust. the new owners of these companies may have to show that they're sticking with the principles of the founders. Dan Charles, NPR News. Transcript provided by NPR, Copyright NPR.
300x250 Ad
300x250 Ad